Banks are pushovers, governments change tax laws to help and advisors and brokers would donate their sisters to get part of the action – but the private equiteers might be finally meeting resistance: some serious investors aren’t rolling over anymore.

The scrapping of the Flight Centre meeting today that was to have voted on the company’s $1.6 billion privatisation could be seen as an important milestone in the market place’s need to adjust to “the swarm”.

Lazard Asset Management has earned a place in the history books as the first institution to meaningfully say “no” to the equiteers. Lazard’s 12.5% stake is enough to block the deal.

Not that many other shareholders might thank them when Flight Centre trading resumes tomorrow and the shares tank. The founding directors led by Screw Turner were offering $17.20 for shares that last traded at $16.89 and will set for a lot less tomorrow.

More importantly, the Flight Centre experience increases the focus on the key shareholders in Qantas and other companies presently or about to be under takeover bid from private equity funds. More institutions with a longer time horizon than next quarter’s results will be asking why they should hand over the alleged upside to the fee-gougers.

Just when the MacQanTexCoe consortium has received the Prime Ministerial nod of approval, along come market forces…

Peter Fray

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