We’re into the final battle and Airline Partners Australia is seriously cranking up its campaign to secure control of Qantas on the cheap but increasingly more investors are withdrawing their acceptances.

On top of those full pages ads in The AFR, there were two missives from Qantas in the mail this morning: the eighth supplementary bidder’s statement and yet another letter from APA “spokesman” Bob Mansfield.

Then we had two fresh ASX announcements: the first stressed that the APA bid would lapse if they don’t have 50% by 7pm on Friday and the second revealed that almost 50 million shares had been withdrawn from the institutional acceptance facility.

Whilst more than half of all shareholders have indeed accepted the bid, they only represent 12.57% in voting terms. The institutional acceptance facility is a non-binding mechanism which fell from 304.46 million shares to 256.81 million in this morning’s notice.

So APA started the week needing another 550 million new acceptances to creep over the 50% threshold that would allow for a two week extension and instead they have gone backwards from 551.8 million to 506.3 million on the first day.

As this timeline of substantial shareholder notices shows, the bid is increasingly losing momentum and now looks destined to fail;

Friday, 16 March: 18.17%
Monday, 19 March: 19.34%
Tuesday, 20 March: 24.7%
Thursday, 22 March: 27.91%
Friday, 23 March: Balanced Equity Management announces won’t accept for 4% stake
Monday, 26 March: 30.06%
Wednesday, 18 April: 28.86%
Friday, 20 April: 27.48%
Tuesday, 24 April: 27.8%
Monday: 30 April: 25.51%

Andrew Sisson’s rejection of the bid — re-affirmed in this interview with Alan Kohler on Inside Business yesterday — clearly stopped APA in its tracks.

However, after two notices showing lower acceptances, the tide appeared to be turning when there was a slight increase last Tuesday but today’s 2.3 percentage point decline appears to be a devastating development.

The market isn’t at all concerned by the likelihood of the bid failing as Qantas shares were steady at $5.32 this morning despite Mansfield’s claim it was “almost certain” the shares would fall if this happened.

Many investors expect APA would come back with a higher bid – as the booming Qantas profits would justify – and if this happened the shares trade higher than $5.45 in the weeks ahead.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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