Buster, I don't think anyone even knows what was going to happen with the deal if it had gone ahead.
Furthermore, I do not believe there is even any independent aviation expertise in Australia capable of analysing, or auditing, Qantas to arrive at a fair market value for its shares, and understand what was going to be done by it's new owners.
Even if there was such expertise, would you want to risk your future business by arriving at a conclusion unfavourable to your potentially biggest customer?
The deal was what I would call "self referential" in that the Board and Senior Management of the company were the only ones capable of arriving at a fair value figure for the company, yet they were regarded by the potential new owners as "essential" to their bid, and were to be remunerated accordingly. This is a massive conflict of interest in my opinion, although I am sure it is perfectly legal.
Let me give you a little example of what I mean.
Take Qantas's orders for new aircraft. They have paid God knows what for places on production lines for B787 and A340.
Now what are those worth on the open market today? Of course in the Qantas books, they would have to be carried at purchase price in the auditors belief that that QF is going to go ahead and complete the purchase of these aircraft.......but what if they weren't?
Similarly, I would assume that QF's rotables would all be well and truly written off by now (fully depreciated), what is there market value?
Then of course there is the wonderful subject of what is aircraft maintenance (a fully deductible business expense) and what is actual refurbishment (A capital expenditure, not a business expense). If I spend thirty million bucks upgrading thronomisters from Mk5 to Mk 7A, is this an expense or capital expenditure, knowing that the Mk7A Thronomister now sells for $500,000 each on the open market?
What has happened to all QF's "used" turbine blades, stators and vanes? I know a lot of airlines kept theirs in the hope that repair technology would one day be good enough to repair them?
These matters could really only be investigated by an auditor with extensive aviation engineering expereince, and I don't think there are many around.
But of course it would all be a private matter wouldn't it?
The whole thing has been niggling me for some time. We appear to have had the bare legal minimum of helpful information from the Board that would allow shareholders to make an informed decision. What has been fed has all been perfectly legal I'm sure, but morally, knowing that Macbank are not stupid and are backed by big players, one has to ask was the bid too low?
Obviously the answer has to be yes, but of course we didn't hear that from the Board did we?
The whole thing reminds me of a union meeting many, many years ago out at Tulla...... Our union head office negotiator told us the deal he had got from management, which to us was disgustingly small,
........ then he told us how hard he had to work to get even this pipsqueek payrise out of them,
.......... then he told us there was no way they were going to increase their offer,
..........then he told us that if we rejected it, there was no way he was going to waste his time trying to get a better offer,
...........then he told us that if we decided to go on strike we would be "on our own" and would get no guidance or support from him.
In other words we were up the creek without a paddle, what could we do but accept the offer?
and a year later he joined their industrial relations department
Last edited by YesTAM; 21st May 2007 at 20:13.