There were two interesting columns in The Australian today which together provided some insight into how the political tea leaves might play out with the privatisation of Qantas.

Firstly, Bryan Frith has become the first credible commentator to openly predict the deal might be blocked on national interest grounds as follows:

If the Government’s electoral stocks don’t begin to improve soon it’s possible that rejection of the Qantas offer may begin to appeal, positioning it as an example of a strong and decisive leader and a Government prepared to take account of community concerns.

In that regard, Howard’s disgraceful behaviour in killing off the Snowy Hydro IPO a few months ago, when the float process was already under way, should not be forgotten, and that followed an emotive, populist campaign to save the Snowy – another Australian icon.

It’s time to tune in to Alan Jones to get a sense of what might happen, but the Parrot likes to back sure things and will be reluctant to upset Qantas director James Packer.

Qantas shares are unchanged at $5.36 today but the hedge funds who’ve bought 30-40% of the company should be increasingly nervous. It would be very interesting to know how the current level of foreign ownership is being tracked given the enormous churn on the Qantas share register.

Shareholders in Allco Equity Partners yesterday received notice of an EGM on 6 March in Sydney changing the constitution to limit foreign ownership. Will the two other “Aussie” investors, Allco Finance and Macquarie Bank, have to take similar steps?

The other interesting column was from media commentator Mark Day, who basically accused Macquarie Media of breaching regional radio ownership laws as follows:

Stuart Simson says the sale of his five radio stations had nothing to do with the ownership investigation being conducted by the broadcasting watchdog, ACMA. Well, OK, things often are not as they seem, and it can be dangerous to jump to conclusions, even obvious ones.

But there is no doubt that Simson was bound up in financial arrangements that appeared to have breached the control provisions of radio ownership laws. His ultimate partner in this arrangement, Macquarie Bank, admitted it.

Macquarie’s envelope-pushing has gone too far with regional radio, so why should the politicians tolerate its envelope-pushing on Qantas foreign ownership and airport-airline cross-shareholding restrictions? It’s now even trying to claim the Qantas Sale Act doesn’t apply to Jetstar, which is just too clever by half.

Peter Fray

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