THE TOP TIER and one relatively new player in the iconic private equity deals of recent months were represented in the legal line up for the biggest acquisition involving private equity so far in Australia — Airline Partners Australia’s (APA) $11 billion bid for Qantas.
APA includes Australian investors Allco Equity Partners, Allco Finance Group and Macquarie Bank, as well as Texas Pacific Group and Onex and a range of offshore investors with smaller stakes.
Mallesons Stephen Jaques has the primary legal advisory role for the bidders. It initially acted for Macquarie Bank, the financial advisers to consortium, but then went on to act for the consortium as a whole.
“Basically our role has been to put the consortium arrangements [together] and then do the takeover bid,” partner David Friedlander said. “Regulatory liaison has been a key part of [our work], because of the [need] to liaise with the Foreign Investment Review Board, the ACCC, and also make filings in places where Qantas flies.”
He said they had been working on the deal for about three months.
As well as Friedlander, partners Greg Golding, Michael Barker, Peter Doyle and Dave Poddar and senior associates Lee Horan and Jason Lang were among those leading Mallesons’ team.
He said some of the key challenges in the transaction are Qantas’ “status” in Australia, and key regulatory issues, which affected the composition of the consortium. These include restrictions in the Qantas Sale Act on “individual and aggregate ownership [of Qantas] by foreign persons and also other airlines” and restrictions on airport owners such as Macquarie Bank, having a cross-ownership of an airline.
Johnson Winter & Slattery is representing Allco Equity Partners and Allco Finance Group, the largest shareholders in the consortium holding a combined 35.2 per cent of Airline Partners Australia. Partners Damian Reichel, Phil Laity and Jim Hunwick are heading the JWS team.
“The transaction moved pretty fast to get to a stage where all the consortium members were happy with the arrangements, and so over the last 10 or 14 days, until we announced the bid, it was a period of intense activity,” said Reichel.
“The consortium arrangements were not without complexity and it was good that all of the lawyers worked constructively given the time [available].”
Freehills partners Baden Furphy and Selina Lightfoot are advising Texas Pacific Group and partners Ewen Crouch and Andrew Finch and senior associate Tom Story from Allens Arthur Robinson are advising Qantas.
Onex was represented by its in-house legal team, led by general counsel, Andrea Daly.
APA director and Deputy Chairman, Allco Finance Group, Bob Mansfield said APA was committed to maintaining Qantas’ maintenance and safety record; supporting management’s plans to invest in excess of $10 billion over the next five years and the acquisition of more than 70 new aircraft, resulting in a 40 per cent increase in capacity; expanded services; and ensuring more than two-thirds of the APA board are Australians.
APA has offered shareholders $5.60 per share for 100 per cent of shares. In its letter to shareholders, it said APA’s strategy did not involve breaking up the airline, costs to regional services or moving maintenance operations offshore and the deal will have no impact on the Qantas Frequent Flyer program.
The deal is subject to acceptance by 90 per cent of Qantas shareholders before it can go ahead. By early February, shareholders are due to receive a detailed bidders statement from APA and a target’s statement from Qantas outlining its board’s acceptance of the offer.