Qantas dismisses private equity takeover talk as speculation

Speculation was prompted by a report in The Australian that responses to a potential takeover had been discussed at senior levels of government, with both the transport minister and treasurer inclined to oppose any private-equity bid. Apparently they are considering ways to intervene should a bid be made.

The newspaper suggested that a A$3.5 billion ($3.7 billion) offer could emanate from private equity sources. Qantas was subject to an A$11 billion takeover bid in December 2006 by Airline Partners Australia (APA), a consortium led by the now defunct Allco Finance Group and included Macquarie Bank, TPG and Onex. The airline's board backed the bid but APA couldn't muster sufficient shareholder support and efforts collapsed in May 2007.

Apparently the government is wary of a change in ownership, having seen Air Canada struggle after being sold to private equity firms. It is also unclear what would happen to the airline if it were taken over. While the international business is suffering, other segments - such as the Frequent Flyer unit and budget carrier Jetstar - are doing well.

The company reported a pre-tax profit of A$552 million ($578.7 million) for the year ended June 30, which was in line with forecasts, but warned of challenging conditions ahead. Qantas is currently battling growing industrial relations unrest, higher fuel prices and losses at its international operations.

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• Topics
• Australasia
• Buyouts
• TPG Capital
• Macquarie Group