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Taking over an airline is always difficult. Besides dealing with a tough business, there is also the politics.
In the case of the $9 billion buyout for Qantas Airways Ltd. (ASX:QAN), the buyers, including Texas Pacific Group, were able to get buy-in from the necessary governmental authorities.
That looked like it would be the biggest hurdle, right?
Maybe not. According to a story in The Age, there are still some more issues.
A big shareholder -- Balanced Equity Management -- basically wants a higher price. And why not? Equity in Australia has been red hot.
It's a gutsy strategy, though. If the deal falls through, Qantas shares are probably going to be lower than current levels. Keep in mind that there are a lot of hedge funds in the stock and they may dump their shares if the deal implodes. In fact, on the recent news, the stock price of Qantas fell 3%.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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