Qantas: 18.17% today - Mere 71.83% to go!

[Torres]

Sky News this morning indicates:


18.17% acceptance;
Must have 90% acceptance by April 3;
Institutional investors claim the price is too cheap.


I don't have a crystal ball, but APA may need to re consider their offer as they have only 18 days to their deadline.

A revised new offer appears possible (APA can not revise their current offer), or a competing bid could surface - or APA may be forced to walk away.

Terry McCrann (http://www.news.com.au/heraldsun/story/0,21985,21369573-36281,00.html) seems to think they are under valued.

We live in interesting times. I still suspect that at the current share price, Qantas shares could be a lucrative investment, although some risk exists.

[Buster Hyman]

I wonder if the 18.17% of shareholders miss out on the revised offer...if there is one???:confused:

[Yusef Danet]

Once the bid price has been declared final (it has) the bidders can not increase the bid price, except in the instance of a competing bid. The bidders may extend the deadline though, and already have.

This bid, like most, is conditional upon meeting the 90% compulsory acquirement threshold, and the 18% who have accepted or signaled intent to do so will not necessarily be bought out unless the bidder receives the required 90%.

[chimbu warrior]

I wonder if there are any "golden parachutes" in this deal. Sometimes bidders insert a clause that effectively means some of their costs are recoverable if the bid fails.

If they do walk away, it would be a fairly expensive try.

[B A Lert]

The goings-on since the APA bid was made shows just how inappropriate it is. If the offer was truly 'in the money', APA would
- have been swamped with pieces of paper marked 'accept'
- not have had to extend their offer,
- not be forced to mount an expensive and aggressive campaign to acquire outstanding shares
- not have had the ignominy of some major institutional investors querying the adequacy of their offer.

The Qantas profit statemnt yesterday adds more grist to the mill in that the forecasts are for more of the same but better. Apart from the conflict between what Qantas has said publicly about Tiger (nah, they won't hurt us - a sentiment echoed by Virgin's CEO) and what they are now saying (could have a negative impact).

One thning is very clear: if the APA bid is unsuccessful, all of the Qantas Board and a couple of its 'top team' (start with the CEO and CFO) should quit their posts immediately APA surrender. Note that some of the execs are playing their cards very smartly and are saying nothing about the APA bid to no one!

[Annulus Filler]

I can feel a sweetener coming. Maybe the return of the 15c dividend to the current shareholders????

[Capn Bloggs]

If I buy on the market for 5.15, can I then sell them to APA for 5.60?

[tail wheel]

Currently quoted $5.12.

Nothing to stop you buying today and accepting the APA offer tomorrow. But if the APA offer fails you may lose - unless they make a new offer after the first expires, or another offer comes out of the wood work.

[B A Lert]

When APA claim 18.17% acceptance, what do they mean: 18.17% of all Qantas shares or 18.17% of their required 90% ? Having read APA's offer, and having been on the receiving end of their pressure phone calls, nothing would surprise me.

Does anyone know what they really mean?

[Ultralights]

If I buy on the market for 5.15, can I then sell them to APA for 5.60?
Yes...

Its all about risk and reward.... whats is the reward? obvious really, buy at 5.15 sell at 5.60 but at what time frame? if the deal goes ahead withing a year, then not a bad % return, if it drags out longer, (time taken to achieve the 90%) then your %return will fall accordingly...

the risk- the deal falls through and you might be lucky to get out at a small loss , but if not the price will fall to pre offer levels of about $3 something...

personally, the risk is worth the reward, but i would not commit a lot of funds to it.. the upside is most of the major hurdles are passed, the ATO audits, the ACCC given the go-ahead. the only hurdle left is the 90%..

[Kanga767]

Currently quoted $5.12.

Nothing to stop you buying today

Pardon my financial ignorance, but how could one buy them today (at $5.12) if presumably no-one is selling them at present (even for $5.60)?

K

[Kanga767]

Ah ha. I see now, kind of. There is still a trickle of trade.

Obviously there are rules which preclude the 'offering company' buying up these shares that trade day-to-day.

Like I said, financial ignorance.


**humbly opens toolbox**


K

[Keg]

Not at all. APA has been buying shares 'on market' whilst this is going on. I suspect that they've probably been doing this but not at the rate you may initially expect. APA buying on the market has risk because if the sale doesn't get up then they have a truck load of QF shares and they're now heading south and APA can't do what they want to do with QF because they don't own the whole shebang.

If the deal doesn't get up the shares won't go below $4.50 in my opinion. Two reasons, the market is beginning to see the under lying value in QF thanks to the APA offer and people will always be banking on another offer coming that is a bit sweeter from APA. Therefore the price will stay higher than it may otherwise.
Of course this all changes depending on the actions of the board and the CEO post buy out failure. If they decide to jump ship then the share price could buckle a bit. For some reason people think Geoff Dixon is a genius. :ugh:

Final wisdom for tonight....never take financial advice from a pilot! :E :}

[tail wheel]

Kanga.

No one selling - "a trickle of trade"?

Don't think so - 12,981,928 Qantas shares traded today (http://www.asx.com.au/asx/markets/PriceResults.jsp?method=get&template=F1001&ASXCodes=QAN), so someone is selling!!!

Business as usual!! :ok:

Lert.

It will be 18.7% of the total issued capital, but even if it were only 18.7% of the required 90% it would still be only 16.8% of the total issued capital.

What is 1.9% of the total issued capital when you need 90%??

[Taildragger67]

Frozo,

Nearly right - not after a further 14.9%, but when they have over 14.9% - ie. a 'further' 9% on top of the initial 5%.

I think.

Lert,

The percentage is the amount they own, of all outstanding shares in issue; so where they to hit 90%, it would be 90% of all shares (which would be 100% of what they need to go compulsory - geddit?).

One little point which seems to be overlooked -as I understand it - is that part of the $5.60 is a 15c dividend; in other words, the actual price APA are paying for the shares is $5.45. I don't have the docs in front of me so can anyone please confirm that?

If that's the case, then that means they're using the company's capital to part-fund the 'headline' figure, doesn't it? All well and good, but if the company is as potentially profitable as the updated guidance suggests, then couldn't future dividends possibly be greater than that?

[Torres]

Tonights news:


APA have acceptances of 28% of ahares.
Shares up at $5.22 this evening's close.
Offer could fail.
May extend deadline by two weeks.
40% now held by hedge funds.

The hedge funds are no doubt looking for an increased offer and may take a bath if the offer fails.

We live in even more interesting times. :E