Macquarie Revalues Qantas at $17 Billion

We couldn’t do ourselves justice if we didn’t make some mention of Qantas (ASX: QAN).  We noted the headline from Bloomberg News, “Qantas’s Dixon Tells Staff Airline in ‘Sweet Spot.'”  Clearly this ‘Sweet Spot’ must have materialised at some point after the Airline Partners Australia / Qantas takeover died.  The inside running is that Dixon will release full details of the ‘Sweet Spot’ to the market on Thursday.
We can only wonder what this will do to the share price.  As of the close of business yesterday, Qantas shares were within striking distance of the $5.45 APA offer, and trading at $5.32 were trading in excess of where it had been during much of the painfully pathetic takeover period since late last year.
GoldmanSachs JBWere analyst Paul Ryan told Bloomberg the “failed bid has highlighted the value in Qantas’s core airline strategy, asset base and balance sheet.”  He went on, the “board now faces a more activist shareholder base seeking implementation of measures to crystallise this value.”
Not being privy to the Qantas shareholder register, we wonder how much selling there has been by the hedge funds that were initially only interested in whipping in and out for a quick profit?  It can only mean one of possibly three things: either the hedge funds are happy to sit and wait it out, especially as they may have picked up stock for as low as $5.20 or so; or they have been selling into strong buying; or just as likely, that the hedge fund presence on the register was much less than had been predicted.
Then we hear this morning that APA consortium leaders Macquarie (ASX: MBL) have now revalued the airline at $17 billion!  Considerably higher than the $11 billion that they had offered under the takeover deal.  That must make them even more disappointed that they missed out on such a bargain.  With this revelation we can certainly now see that it is a genuine case of ‘Seller Beware’ when it comes to takeover offers.

Kris Sayce
Markets and Money

Kris Sayce

Kris Sayce, dubbed the ‘Jeremy Clarkson of Australian finance’, began as a London finance broker specialising in small-cap stock analysis on London’s Alternative Investment Market (AIM). Kris then spent several years at one of Australia's leading wealth management firms. A fully accredited advisor in shares, options, warrants and foreign-exchange investments, Kris was instrumental in helping to establish the Australian version of the Markets and Money e-newsletter in 2005.
He is currently the Publisher, Investment Director and Editor in Chief of Australia's most outspoken financial news service — Money Morning.

Leave a Reply

Be the First to Comment!

Notify of
Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to