Qantas Airways has appointed Macquarie Group bankers to defend the airline against a possible takeover, after the carrier lost a third of its value last week because of a profit warning.
The airline appointed Macquarie and set up an internal team “to advise on the defense against potential private equity bids”, Qantas spokesman Thomas Woodward said, confirming earlier media reports.
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Qantas recently split its international and domestic businesses so that a new management team could focus on turning around the unprofitable global arm while the domestic unit battles an aggressive expansion by Virgin Australia.
Analysts said at the time they did not think the split was designed to clear the way for a takeover of the international division.
Qantas shares jumped 9.5 cents, or 9.8 per cent, to $1.065 this morning after the Australian Financial Review first reported that Macquarie had been appointed. Chief executive Alan Joyce has also appointed Citigroup to monitor the airline's share register for any raiders, the newspaper said, without identifying any sources.
The newspaper said top executives were not aware of anyone lining up a bid, but Mr Joyce has reactivated an internal defence team, first set up last year when there was talk that former Qantas chief Geoff Dixon, who left the carrier in 2008, was working with a consortium to buy a big stake in the airline.
Qantas shares hit a record low of 96 cents last week after the company warned it expected to book its first net loss since it was privatised in 1995, blaming deep losses in its international operations, weak travel demand and soaring fuel costs.
Its battered shares rose 8.3 per cent to $1.05 after the newspaper report, even though chief executive Alan Joyce said last week that he was not aware of any bid being lined up for the company.
Macquarie will be looking to identify any businesses that the airline could jettison to help boost its share price, a source told Reuters, declining to be identified.
Ironically, Macquarie led an $11 billion bid with private equity firms for Qantas in 2006. The bid was ultimately scrapped as two key fund managers refused to back the $5.45 a share offer despite Qantas management pushing for the takeover.
The Airline Partners Australia group included private equity giant Texas Pacific Group and Canadian investment firm Onex Corp.