=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2006/12/14/financial/= f202426S14.DTL --------------------------------------------------------------------- Friday, December 15, 2006 (AP) Qantas Takeover Bid to Face Review By MERAIAH FOLEY, Associated Press Writer (12-15) 02:57 PST SYDNEY, Australia (AP) -- Australia's consumer watchdog announced Friday it will review the terms = of an $8.64 billion (11.1 billion Australian dollars) takeover bid for Qantas Airways Ltd., highlighting one of the consortium member's near-majority stake in the country's busiest airport. Qantas on Thursday said its directors had unanimously agreed to recommend that shareholders accept a buyout of 5.60 Australian dollars a share from a private equity consortium led by Australia's Macquarie Bank and Forth-Worth based Texas Pacific Group, a long-term investor in the U.S. aviation sector. The offer must now be approved by 90 percent of Qantas shareholders and Australia's consumer regulator, the Australian Competition and Consumer Commission, which began its review Friday. The commission's chairman Graeme Samuel said it will scrutinize the proposed takeover in light of Macquarie's 49 percent stake in Sydney Airport and its near 15 percent stake in the bid consortium. The commission will also assess how the proposed acquisition is likely to affect "customers, suppliers and other competitors in the air transport industry," Samuel said in a statement. The consumer watchdog will accept public submissions on the proposed takeover until Jan. 29. If approved, the sale will remove the iconic airline — easily recognizable by its red and white kangaroo logo — from the Australian Stock Exchange 11 years after it was sold by the government. The 86-year-old Qantas has remained one of the few profitable global carriers in recent years, amid soaring oil prices and concerns about terrorism in the wake of the Sept. 11, 2001, attacks and health fears spurred by outbreaks of SARS and bird flu. Some analysts have predicted Prime Minister John Howard's populist, conservative government may try to block the takeover of the nation's flagship airline ahead of federal elections next year. But Howard has said the government will not interfere with the deal if it meets Australian laws. Treasurer Peter Costello said he was awaiting details of deal to decide whether it was in the national interest. "I have to be very careful that I don't prejudge this application," Costello told the Australian Broadcasting Corp. radio. "We'll wait for the application to be made and then we'll consider it." Under the Foreign Acquisitions & Takeovers Act, Costello has the power to scuttle the deal if he finds it is not in Australia's national interests, as he did with Royal Dutch Shell's 10 billion Australian dollars bid for energy giant Woodside Petroleum Ltd. in 2001. Australian law caps foreign ownership of Qantas at 49 percent, with each overseas individual allowed a maximum 25 percent of shares. Qantas said the takeover bid was structured to meet this requirement. Under the proposed deal, total foreign investors would hold less than 40 percent, with Texas Pacific Group less than 15 percent, Canada's Onex Corp. 9 percent and unnamed other foreign investment funds holding less than 15 percent each. Australian consortium member Allco Equity Partners would hold 35 percent of voting rights, Allco Finance Group 11 percent and Macquarie around 15 percent. Costello said the government would look at the structure of economic and voting interests in the takeover bid, as well as the competition implications of a change in Qantas ownership. Meanwhile, Qantas Chief Executive Geoff Dixon said consortium had no pla= ns to break up the airline. "We have no plans to sell off any of the assets at the moment, certainly we have no plans ever to break the airline up or to sell off any major part of the airline, the operating airline itself," he told ABC. ___ On the Net: www.qantas.com.au www.asx.com.au ---------------------------------------------------------= ------------- Copyright 2006 AP