Taildragger67
7th Nov 2006, 09:54
http://www.smh.com.au/news/BUSINESS/Qantas-takeover-possible-but-difficult/2006/11/07/1162661679066.html
A potential takeover of Qantas Airways Ltd by a private equity group was plausible but foreign ownership laws would make it difficult, according to analysts.
Shaw Stockbroking research director Scott Marshall said the main issues for a potential takeover would be shareholder limitations and foreign ownership laws applicable to Qantas stock.
"The main one is the 49 per cent aggregate foreign ownership cap," Mr Marshall said.
"If Qantas was to be taken over you would have to have either a change in the ownership restrictions, which is possible, but it won't happen in the short term."
Mr Shaw said if the federal laws weren't changed, a new ownership structure would have to be such that no more than 49 per cent is owned by overseas investors.
"It's possible but very, very difficult to make a takeover bid at the moment via a private equity consortium," Mr Shaw said.
"The market is obliviously talking about ... but I think the stock market might be racing a bit ahead of itself."
An analyst who did not want to be identified said a takeover by a private equity group is possible and hard to rule out.
"It's plausible and you can't just be dismissive of it," the analyst said.
"Airlines are pretty volatile and have a really high degree of operating leverage, and you've got some foreign ownership issues in terms Qantas but it's just difficult to say that you can't do it."
Talk that Qantas may be the focus of a potential takeover from a private equity group surfaced was spurred by an unsourced report in The Australian Financial Review, which valued Qantas at over $8 billion.
Qantas was unavailable for comment.
The company's shares climbed 11 cents or 2.6 per cent to $4.31 on Tuesday.
Private equity groups have recently been active in the Australian market with CVC Asia Pacific Ltd making a $2.7 billion play for radiology and aged care company DCA Group Ltd.
A potential takeover of Qantas Airways Ltd by a private equity group was plausible but foreign ownership laws would make it difficult, according to analysts.
Shaw Stockbroking research director Scott Marshall said the main issues for a potential takeover would be shareholder limitations and foreign ownership laws applicable to Qantas stock.
"The main one is the 49 per cent aggregate foreign ownership cap," Mr Marshall said.
"If Qantas was to be taken over you would have to have either a change in the ownership restrictions, which is possible, but it won't happen in the short term."
Mr Shaw said if the federal laws weren't changed, a new ownership structure would have to be such that no more than 49 per cent is owned by overseas investors.
"It's possible but very, very difficult to make a takeover bid at the moment via a private equity consortium," Mr Shaw said.
"The market is obliviously talking about ... but I think the stock market might be racing a bit ahead of itself."
An analyst who did not want to be identified said a takeover by a private equity group is possible and hard to rule out.
"It's plausible and you can't just be dismissive of it," the analyst said.
"Airlines are pretty volatile and have a really high degree of operating leverage, and you've got some foreign ownership issues in terms Qantas but it's just difficult to say that you can't do it."
Talk that Qantas may be the focus of a potential takeover from a private equity group surfaced was spurred by an unsourced report in The Australian Financial Review, which valued Qantas at over $8 billion.
Qantas was unavailable for comment.
The company's shares climbed 11 cents or 2.6 per cent to $4.31 on Tuesday.
Private equity groups have recently been active in the Australian market with CVC Asia Pacific Ltd making a $2.7 billion play for radiology and aged care company DCA Group Ltd.