Hold==The Qantas board has declared the takeover offer dead -- Moon

[ Show ]

Support VoyForums

[ Shrink ]

VoyForums Announcement: Programming and providing support for this service has been a labor of love since 1997. We are one of the few services online who values our users' privacy, and have never sold your information. We have even fought hard to defend your privacy in legal cases; however, we've done it with almost no financial support -- paying out of pocket to continue providing the service. Due to the issues imposed on us by advertisers, we also stopped hosting most ads on the forums many years ago. We hope you appreciate our efforts.

Show your support by donating any amount. (Note: We are still technically a for-profit company, so your contribution is not tax-deductible.) PayPal Acct: Feedback:

Donate to VoyForums (PayPal):

[ Login ] [ Contact Forum Admin ] [ Main index ] [ Post a new message ] [ Search | Check update time ]

[ Next Thread | Previous Thread | Next Message | Previous Message ]

Date Posted: 06:06:00 04/16/10 Fri
Author: 8th of May 2007price target of $5.45.
Subject: Hold==The Qantas board has declared the takeover offer dead

Print This Page QANTAS AIRWAYS LIMITED (QAN)
HOLD Opinion: Takeover on Hold

Fundamental Analysis
EVENT

Qantas (QAN) is officially grounded with Airline Partners Australia (APA) finally conceding failure on its $11.1b takeover bid for airliner.

KEY POINTS

The Qantas board has declared the takeover offer dead, any further bid will be a “new matter’’.

Board to meet and discuss management's three-year plan and strategies for growth.

Margaret Jackson to suffer more than DVT.

COMMENTARY

The consortium attempting to take Qantas over – Airline Partners Australia (APA) – have officially announced their bid has collapsed. With hedge funds having to exit the stock (they bought in the hope of a quick buck), the stock has fallen 3% today.

Where to now?

QAN has issued three profit upgrades since the takeover bid was announced last year. Additionally, other airline stocks – Air New Zealand (AIZ) and Virgin Blue (VBA) have soared in recent months. We feel this should provide some support for QAN, and the stock to maintain buoyancy above levels seen before the bid was launched.

Overall, we feel there is little chance of a competing bid from another party, with another group unlikely to pass the stringent ownership restrictions. However, with the amount of fees left on the table, we would expect APA to re-launch another bid for QAN at or above $5.45 in the coming months.

DVT for Jackson?

Margaret Jackson supported APA's bid with vigour and enthusiasm (and some foot-in-mouth moments), and her tenure is now looking untenable. Highly respected CEO Geoff Dixon is almost certain to stay on despite also throwing his hat in the ring with APA.

Qantas confirmed any new offer, would be treated as just that, new. So, APA will have to start from scratch, and Qantas will give consideration to recent earnings upgrades and improved trading conditions. Overall this is good for shareholders.

For their part, the board is now getting back to running the airline and met today to set a new three-year strategy. Hopefully, they will take on board some of the initiatives that the boffins at APA developed.

The market is clearly factoring in a high chance of a fresh bid from APA. This hopes many slowly diminish if APA doesn’t make any announcements in the near future. We rate QAN as a Hold, maintaining our six-month price target of $5.45. We feel any dip to around $5 or below would represent a good buying opportunity.

[ Next Thread | Previous Thread | Next Message | Previous Message ]