Qantas sale

May 5th, 2007, 02:09 PM
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chimani, I don't pretend to understand the ins and outs of this deal, or of financial markets generally, but I get the impression that in fact the consortium needs acceptances amounting to 70% of the stock - the 50% target was designed to give it 2 weeks more breathing space to secure the remaining 20%, following which it can compulsorily acquire the rest.

You might well ask how in a free society a private entity can force a shareholder to sell his/her property.

I just checked this morning's Melbourne Age and read this:

"The consortium announced yesterday it planned to go ahead with the bid following a tense 5am turnaround by US billionaire corporate raider Samuel Heyman, which got the bid over the line."

You might also ask how a deadline (7:00 pm local time Friday) can be set and then ignored, as Heyman's offer arrived late. One analyst feels the the government's Takeover Panel will have to reject this, as it makes nonsense of the whole concept of a timetable and sets a precedent. The Treasurer as usual is taking a hands-off position.

Regarding the "deadline" I couldn't help thinking of the analogy of government tenders. Let's say the deadline is 2:00 pm Friday. At 1:59 pm the designated official stands by the box in which you lodge your bids and dials the time service. When he or she hears "At the third stroke, the time will be two p.m. precisely ... bip ... bip ... bip", the box is locked on the last "bip". If a bidder staggers in sweating 10 seconds later, bad luck. Any extension to the closing time must be announced and communicated to all prospective bidders well in advance so that nobody has an unfair advantage.

That, to my way of thinking, is a deadline.
Neil_Oz is offline  
May 6th, 2007, 01:30 AM
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Agree - a deadline is a deadline.

And great news - according to the SMH website it looks as if the Takeover Panel thinks so too.

At last!! Makes you wonder what the American fund was up to ... did someone lose the address? Have more important things to do? As corporate raiders maybe they were waiting for the price to go up one more cent!!

Schadenfreude in spades.

And the regulatory bodies can't back down - can they?
chimani is offline  
May 7th, 2007, 07:02 PM
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Maybe the US hedge fund didn't realise on Friday that it was already Saturday in Australia. (Joking.)

Whatever, the deal is definitely dead, although who knows who else might be lurking around the corner. I notice that the chairman, Margaret Jackson, still hasn't done the right thing and fallen on her sword. Morally the whole board and top management should, but it would cause too much disruption.

Now is the time when the government should be looking at ways to prevent key national assets from being gutted by these turkeys (and robbing us of billions in tax revenues in the process), but I'm not holding my breath.
Neil_Oz is offline  
Aug 16th, 2007, 01:06 PM
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By way of an update, Qantas has just solidified its position as one of the world's most profitable airlines by announcing a pre-tax profit of AU$1 billion, with a forecast that this will grow by 30% in the coming year. No wonder the private equity raiders wanted to get hold of it.

Meanwhile, Macquarie Bank shares have taken a real savaging in the sharemarket "correction" of the last few days.

And the chairman, Margaret Jackson, finally did fall on her sword. The management team is still in place because otherwise they've (obviously) been doing a very good job.
Neil_Oz is offline  
Aug 17th, 2007, 02:06 AM
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Hurrah, hurrah!!

I'd like to see Macquarie Bank get its comeuppance. Do you know how much it costs to fly out of Sydney airport now to an international destination?

$251. $251..... outrageous.

As for the takeover - it was a close run thing at the time, and no provisions at all in place to stop it all happening again.

chimani is offline  
Aug 17th, 2007, 03:03 PM
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The buyers of our airports - or what used to be our airports - are using their ownership as a licence to print money, developing office and retail complexes on Commonwealth land. State and local governments that normally control such development have no rights to intervene in the interests of affected businesses and individuals in adjoining areas. This is a bloody disgrace.

On top of that, these private monopolies are setting ruinous prices for parking, and at Sydney at least skimping on basic maintenance. The last time we arrived at Sydney International I visited the toilet, to discover that the doors on two of the
stalls wouldn't close, let alone lock, and where one of the liquid soap dispensers should have been was a ragged hole in the wall. Coming on top of the chaos of the baggage collection and customs clearance areas I had to question how a city that likes to think of itself as "global" can tolerate such a dismal introduction to overseas visitors.

And at Canberra's modest airport a sign now tells you that you can't pick up arriving passengers at the front of the terminal - you have to pay the extortionate parking charges or the person being picked up has to trudge up the access road.

And then there's the outrageously-priced Sydney airport private train service. I couldn't help comparing the situation to the city we'd left, San Francisco, where as far as I know the airport is still in public hands, as is the fast and efficient (but mysteriously underpatronised) BART system. From memory a ticket from SFO to a downtown station, a much longer trip than SYD to Sydney's CBD, costs no more than about US$4. And this in the home of free enterprise, no less.
Neil_Oz is offline  
Aug 18th, 2007, 04:51 AM
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Ah yes, Neil. But what's to be done about if?
chimani is offline  
Aug 18th, 2007, 02:25 PM
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chimani, I can't see the next Labor government buying the airports back. I don't know what the terms of sale were, but there must be some opportunity for the government to review them and give some kind of watchdog authority to issue notices of non-compliance. When the government flogged off Telstra they put in place all sorts of regulatory mechanisms to stop abuse of market power in the telecommunications industry. Who's representing the people affected by the airport sales?

With a private monopoly you get the worst of both worlds. At least the public servants were accountable to the Auditor-General and Parliament for their stewardship, and their primary goal was actually to run the airports effectively and efficiently. The private owners' primary goal is to make money - everything else is just a means to that end. If they can get away with maximising profit by giving crappy service, rest assured they'll do it.
Neil_Oz is offline  

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