The supposedly independent non-executive chairman of Qantas Margaret Jackson hasn’t won too many friends amongst institutional investors this morning after launching an extraordinary and quite shrill attack in both The Australian and The AFR.

Speaking from a Melbourne hospital where Jackson is having minor surgery on her arm today, the 15 year veteran of the Qantas board declared it would be “devastating” if the bid failed. It’s a strange position for someone to take who is about to lose what she describes as the best job she’s ever had, which paid $534,747 in 2005-06.

Jackson will clearly be selling her 122,997 shares for $670,334 into the APA offer, but as the representative of the shareholders it’s completely inappropriate to declare investors who don’t accept have “a mental problem”.

Even her maths is all over the place given this quote in The AFR:

“Some 60% of the share register is now not aligned with the long-term interests of the company, and this is very destabilising.”

Where does 60% come from? She seems to be putting APA’s 20% in the same category as the 40% supposedly controlled by hedge funds. That said, today’s APA’s update reveals the stake has hit 24.7% so the momentum is slowly building with 10 days to go.

Despite all the bluff and bluster, Jackson hasn’t answered the key question: why haven’t shareholders been given the same full information as APA? Where’s the breakdown of earnings between the domestic and international business?

Terry McCrann wasn’t invited in for a chat at the hospital like his News Ltd colleague Glenda Korporaal, but he’s again come up with a cracking column today nailing the Qantas independent expert Grant Samuel as follows:

Grant Samuel thinks a multiple of 13 times Qantas’s 2007 earnings is sufficient in a takeover. While Singapore and Cathay are trading at 18 times without a takeover and the purported premium that would go with it.

In a table in the Grant Samuel report most major airlines are trading above the multiple it thinks appropriate for Qantas shareholders to sell at into a takeover. Only a couple are selling on lower multiples, and then only just — around 12 times. Grant Samuel actually wants Qantas shareholders to sell out at a lower relative price than Air New Zealand is trading at!

It is hard for Qantas shareholders to make these direct comparisons because this table does not have a line for Qantas. There are five tables in the Grant Samuel report which compare airlines. Only one — only one — does not have a Qantas line: the one detailing earnings multiples. This is inexcusable and unacceptable.

Qantas shares are today down 3c to $5.11 in a rising market, suggesting investors agree with McCrann, not Jackson, whose abuse is likely to backfire.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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