Since Nicholas Moore was badly mauled by Alan Jones back when Macquarie Bank bought Sydney Airport, the Millionaire Factory has had a high degree of sensitivity to powerful people who are inclined to mouth off.

After Qantas issued its statement containing the bare minimum of detail about the Macquarie Bank offer, the shares took off and the comments started flying including this one from Senator Barnaby Joyce: “This is an offensive move on an Australian icon, the Flying Kangaroo. Something has to be done to protect the national interest.”

Considering the deal needs smooth political waters, a calm Government backbench, especially in the Senate, and a Prime Minister who’s convinced that the deal won’t upset his re-election chances next year, it set off alarm bells at the Factory.

So much so that at 5.27pm yesterday MacBank issued the following statement:

Further to a statement to the Australian Stock Exchange made earlier today by Qantas, Macquarie Bank, on behalf of a consortium of which it is a part, confirms that indicative discussions have been held with Qantas. These discussions are preliminary.

If a firm proposal is made, that proposal will adhere to the existing rules governing the ownership of Qantas, in particular that there will be continuing majority Australian ownership.

Any such proposal would be conditional upon the support of the Qantas Board.

A number of points need to be made: if the Qantas management are offered equity in any deal then an independent shareholders’ report should be commissioned as a matter of course by the non-executive directors.

David Bonderman, one of the three principals in Texas Pacific Group, should not be dismissed as just another cowboy from Texas. He has shown a sound eye for value, turning three bankrupt airlines into sound businesses. He is chairman of Ryanair which has complete turned the European airline industry on its head with its cut price model, and is now trying to buy Ireland’s Qantas, Aer Lingus.

There is a lot of talk today about a split-up of Qantas: with the transport business being sold or merged into Linfox, the Sydney and Melbourne domestic terminal leases and buildings being sold or hived off, the travel and catering business being sold (Texas Pacific owns Gate Gourmet which it bought from Swissair). All possible but you have to ask why didn’t the Qantas board and management do that already and realise value for shareholders? 

Peter Fray

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