News: AQZ Qantas Announces Acquisition Of Remaining 80% Of Alliance Aviation Services, page-11

I share your sentiment.

The Scheme is subject to a number of conditions including competition clearance.
It is interesting to note that Qantas has determined to acquire Alliance three years after acquiring its initial stake of 20%. The ACCC had been virtually silent on its investigations during this time until last month, when it announced it was not going to take any enforcement action but that it would continue to monitor Qantas's conduct in the industry in relation to Alliance. It is also interesting to note from today's announcement that "The parties are engaging directly with the ACCC with respect to its consideration of the Scheme for the purposes of the competition clearance".

The scheme contains a number of exclusivity provisions, including no-shop, no-talk and no due diligence restrictions on Alliance and also requires Alliance to pay a $7.6 million break fee to Qantas. These provisions along with the pricing and timing of implementation appear to be more favorable to Qantas than Alliance shareholders. This is an all scrip offer. I do not want to own Qantas shares. I am not clever enough to predict what the Qantas share price will be in 6 or 18 months when deed becomes effective. I would be interested to hear the thoughts of others on the consideration. $4.75 may present a substantial premium to recent share price, however Alliance has been trading around its lows since last report, whereas Qantas has been trading at six month highs. We will have to wait for the independent experts valuation, but several brokers have price targets above the consideration (Ord Minnett $5.00, Morgans $5.05).

The Scheme requires shareholder approval. I will not be voting in favour of it. Unfortunately with Directors unanimous recommendation and with general public having only 34% ownership, approval will be a formality.