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Thu, Dec 14, 2006 - Page 10 News List

Qantas rejects A$11 billion takeover bid

AFP , SYDNEY

A Qantas Airways passenger plane takes off from Sydney Airport yesterday.

PHOTO: AP

Australian flag carrier Qantas Airways yesterday turned down a A$10.9 billion (US$8.6 billion) takeover bid from a private equity consortium, sending its shares into a nosedive.

Qantas said the A$5.50 a share cash offer came from a consortium comprising Australia's biggest investment bank, Macquarie, US-based private equity firm Texas Pacific Group, Australia's Allco and Canadian group Onex.

It said the offer contained a number of complex conditions, including a "break fee," which Qantas would have to pay to the bidders if the deal fell through.

"The non-executive directors consider that the terms of the proposal are not acceptable," Qantas said in a statement to the Australian Stock Exchange.

The market had not expected the rejection, with reports early yesterday saying Qantas was poised to accept the offer.

Qantas shares plummeted 6 percent when trading in the stock resumed after the announcement, falling A$0.30 to A$4.93 before recovering to close down A$0.14 or 2.67 percent at A$5.09.

Shaw Stockbroking analyst Brent Mitchell said the A$5.50 price had been widely expected as an opening bid but the real sticking point appeared to be the conditions demanded by the consortium.

"The price is what most people were expecting but it's the conditions that go along with it," he said.

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