Takeover Targets Are Usually Badly Managed.
Takeover targets are usually badly managed at Board/CEO level - thats why they are takeover targets. In other words, the company's return on capital employed is below industry norms and the share price suffers accordingly - making the company "cheaper" to buy.
The buyer is banking on the knowledge that either he has synergies by combining his own with the takeover target to create higher value, or he can manage the purchased company better than the existing management.
Provided the offer price is high enough, and the Board has extracted the maximum from the bidder, then the Board should recommend the bid to shareholders. Thats what Andrew did with Western Mining when Rio Tinto wanted it . Incidently this is why CEO's/ MD's should have share options - they may have to recommend that the compay be sold and their job disappears.
What was strange (to me) about the Qantas bid was that nothing was really going to change except ownership. The Board was staying, so was the management. The Board told the shareholders to accept the bid. The shareholders had nowhere else to go for an independent valuation. In effect they were being asked to sell the shares in the dark.
So the question remains. Why did the Board recommend the bid? What could Macquarie do that the existing management couldn't do? Or perhaps more importantly, what could the management and Macquarie do in private, that the management couldn't do in public?
I believe answers are required to these questions, and I hope ASIC and perhaps the ACCC and ASX follows them up.