Australian Prime Minister John Howard yesterday ruled out changing the law to allow iconic national airline Qantas to be broken up if a multi-billion dollar takeover bid succeeds.
Howard said he did not want to see Qantas split up but that he would not introduce new laws specifically to stop that happening.
"There is not a case for breaking up Qantas but there's also not a case for governments over-reacting to moves in a market," Howard said in an interview with a commercial radio station.
"We can't preach the philosophy of the free market and [then] every time something arises which might look a bit uncomfortable, dart around and say we're going to pass a new law to stop it happening -- you can't run a country like that. Whatever is allowed under the law will be permitted," he said.
Qantas said on Wednesday it had been approached by Australia's biggest investment bank, Macquarie, and US-based private equity firm Texas Pacific Group in a deal potentially worth A$10.9 billion (US$8.4 billion).
"The approach is confidential and incomplete and is being investigated by Qantas," the company said in a brief statement to the Australian Stock Exchange.
However, current laws designed to maintain Australian control of Qantas prevent foreign ownership of more than 49 percent of the firm and limit single stakes to 25 percent.
Transport Minister Mark Vaile reassured the country on Thursday that the restrictions would stay and Qantas would remain predominantly Australian even if the airline was sold offshore.
Faced with nationalistic rumblings over the proposed takeover of the national airline, Howard said those laws would not be changed yesterday.
"We won't be changing the foreign investment rules. Nor will we be altering the caps on individual shareholdings," he said.
Howard's comments backed up those of his treasurer, Peter Costello, who insisted on Thursday it was vital to keep such an important national symbol in Australian hands.
Meanwhile Qantas chief executive Geoff Dixon said the takeover bid was still in its "very early days" and people should "take a cold shower and settle down."
Speaking in Singapore, Dixon said Qantas currently has about 47 percent foreign ownership "and any change of ownership that occurs in the future could only see that remain the same or indeed diminish."
Qantas shares, which surged to a record A$5.25 on Wednesday's buyout announcement before falling back, closed up A$0.01 yesterday at A$4.94.