Morgan BellQantas: A Question of National Pride
December 19th 2006 12:50
If you, dear reader, had to decide on whether Qantas should be sold to a private equity consortium or kept wholly Aussie, what would you do? Stay with me for a look on what you stand to earn and loose with the Qantas take-over.
The news today, 19 December 2006, is that “unions representing Qantas staff will today consider an audacious plan to join the pilots in buying a stake in the airline as part of an attempt to block the sale, as Peter Costello warns he will not bail out the carrier if it gets in trouble.”
“The federal Treasurer said yesterday that there was nothing wrong with so-called private equity deals – where investors use their own funds to take over public companies – if all that was involved was a change in the ownership of companies.”
“About 12 unions will discuss the idea of buying a “blocking stake” as one option for dealing with the planned sale, in a teleconference set up by the ACTU.”
“Under the plan by the Australian and International Pilots Association its 2500 members would invest $50,000 each to buy a 1 per cent stake in the airline if it would help stop a compulsory acquisition.”
“Unions will encourage people to hold on to their stocks instead of accepting the $5.60-per-share offer, because it fears the consortium would cut jobs and send work offshore.”
This news was published in the online version of The Sydney Morning Herald under the title “Union bid to halt Qantas sale amid debt fears” and was written by Kim Macdonald and Mark Davis. Click here to open that page.
What, truly, is at stake with the ongoing Qantas take-over by a private, part-foreign, consortium?
Qantas has characteristics that made it successful: full-service, national coverage, un-rivalled safety, high profitability, popular share-holding and that Aussie touch and feeling.
Whoever understands business, and I’m going to assume that the said consortium does, will try to keep Qantas the way that made it successful. So, in my view, if the consortium takes over Qantas, I envisage that apart from ownership, all should carry on as usual.
But the opposite position must also be considered: a foreign investor would not have the same Aussie attachment and regard for the business and, in time, would change Qantas with the risk of it being lost as the national symbol it has been so far. Well that my grand-mother always told me never to trust foreigners.
Qantas (ASX: QAN) is an extremely profitable company. Its current Revenues are $13.643 billion and Net Profit is $479.5 million. Its Return on Equity is 9.2 per cent.
QAN share price is $5.23 and its P/E is 18.2 times, which looks high.
The take-over bid is for $5.60 per share, a 7.07 per cent above today’s price. If, like most people, you own a thousand shares in QAN, you would be looking at an extra $370.
You tell me, dear reader, what you think of the Qantas take-over.
End
The news today, 19 December 2006, is that “unions representing Qantas staff will today consider an audacious plan to join the pilots in buying a stake in the airline as part of an attempt to block the sale, as Peter Costello warns he will not bail out the carrier if it gets in trouble.”
“The federal Treasurer said yesterday that there was nothing wrong with so-called private equity deals – where investors use their own funds to take over public companies – if all that was involved was a change in the ownership of companies.”
“About 12 unions will discuss the idea of buying a “blocking stake” as one option for dealing with the planned sale, in a teleconference set up by the ACTU.”
“Under the plan by the Australian and International Pilots Association its 2500 members would invest $50,000 each to buy a 1 per cent stake in the airline if it would help stop a compulsory acquisition.”
“Unions will encourage people to hold on to their stocks instead of accepting the $5.60-per-share offer, because it fears the consortium would cut jobs and send work offshore.”
This news was published in the online version of The Sydney Morning Herald under the title “Union bid to halt Qantas sale amid debt fears” and was written by Kim Macdonald and Mark Davis. Click here to open that page.
What, truly, is at stake with the ongoing Qantas take-over by a private, part-foreign, consortium?
Qantas has characteristics that made it successful: full-service, national coverage, un-rivalled safety, high profitability, popular share-holding and that Aussie touch and feeling.
Whoever understands business, and I’m going to assume that the said consortium does, will try to keep Qantas the way that made it successful. So, in my view, if the consortium takes over Qantas, I envisage that apart from ownership, all should carry on as usual.
But the opposite position must also be considered: a foreign investor would not have the same Aussie attachment and regard for the business and, in time, would change Qantas with the risk of it being lost as the national symbol it has been so far. Well that my grand-mother always told me never to trust foreigners.
Qantas (ASX: QAN) is an extremely profitable company. Its current Revenues are $13.643 billion and Net Profit is $479.5 million. Its Return on Equity is 9.2 per cent.
QAN share price is $5.23 and its P/E is 18.2 times, which looks high.
The take-over bid is for $5.60 per share, a 7.07 per cent above today’s price. If, like most people, you own a thousand shares in QAN, you would be looking at an extra $370.
You tell me, dear reader, what you think of the Qantas take-over.
End
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