Credit Suisse the Latest to Take Stake in Qantas

SYDNEY ~ Credit Suisse has become the third institutional investor to reveal it has taken a significant shareholding in Australian airline takeover target Qantas.

The Swiss investment bank said on Wednesday it had built a 5.39-percent stake in Qantas, which is the subject of an US$8.9-billion takeover bid from a private equity consortium.

It comes after Deutsche Bank said on Tuesday it had purchased an 8.4-percent stake in the airline and UBS informed the market late on Monday that it had increased its shareholding from 8.94 to 10.4 percent.

The private equity consortium bidding for Qantas needs shareholders holding at least 90 percent of the stock to accept its AUS$5.45-a-share offer ($4.39) for Australia’s iconic Flying Kangaroo.

One institutional investor, Balanced Equity Management, has already said it will use its 4-percent holding to vote against the deal and UBS reportedly wants a higher offer, raising doubts about whether the takeover will go ahead.

The news of Credit Suisse’s shareholding comes after a report that the private equity consortium behind the bid, Airline Partners Australia (APA), is negotiating with its financiers to drop the 90-percent takeover threshold.

The Australian Financial Review, without citing sources, said APA was hoping to acquire Qantas through a scheme of arrangement, which requires court approval and 75-percent shareholder support to go through.

But the newspaper said the Qantas board, which has backed the current proposal, would oppose the move, transforming the deal into a hostile takeover battle.

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