The Australian government has ruled out allowing iconic national airline Qantas to fall into foreign hands, after it was revealed that a multi-billion dollar takeover bid had been launched.
Qantas said it had been approached by Australia's biggest investment bank, Macquarie and US-based private equity firm Texas Pacific Group in a deal potentially worth $8.4 billion.
'The government policy is that the majority ownership of Qantas should be Australian,' Treasurer Peter Costello said. 'That is the act, that's what the law says and I don't believe there are any grounds to amend the law to reduce the requirement for Australian ownership,' he added.
Legislation limits total foreign ownership of Qantas to 49% and any individual shareholding to 25%. The takeover approach stirred nationalistic rumblings in Australian media and the treasurer said it was vital to keep such an important national symbol in Australian hands.
Australia's Allco Finance Group, which has an aircraft leasing business and rates Qantas as one of its key customers, said today that it was considering participating in the bid for Qantas.
Texas Pacific Group and Macquarie Bank have won financial backing from Goldman Sachs, Citigroup and Credit Suisse for their bid for Qantas, the Financial Times reports.
The report, citing people familiar with the matter, added that TPG and Macquarie are 'deadly serious' about the bid, with the carrier's strong cash flow seen as positive for a leveraged bid.
Texas Pacific has a penchant for airlines, having invested in financially distressed US airlines including Continental Airlines and American West Airlines in the 1990s and more recently US Airways. Analysts said that airline ownership deals were gathering pace in the Asia-Pacific region with the ownership of Chinese airlines also in the spotlight.
