Howard: Laws Won't Change for Qantas

A Qantas jet taxies past the international terminal in Sydney, Australia, Wednesday, Nov. 22, 2006. Australia's national carrier Qantas said Wednesday, it had been approached by Macquarie Bank and the Texas Pacific Group, but declined to give details amid speculation of a takeover that could be worth more than Australian dollars 10 billion (US$7.7 billion; euro6 billion).(AP Photo/Rob Griffith) (Rob Griffith - AP)

SYDNEY, Australia -- Qantas Airways' boss sought to dampen rampant speculation Friday about a multinational consortium's bid for Australia's national carrier as the government strongly hinted it wouldn't move to block the deal if it complies with current foreign ownership laws.

"It's very early days and I suggest some people take a cold shower and settle down," Qantas Chief Executive Officer Geoff Dixon told reporters in Singapore, referring to the reaction since the airline confirmed on Wednesday it had been approached.

Qantas shares have seesawed, soaring as much as 20 percent immediately after Qantas revealed the audacious bid jointly led by Australia's largest investment firm, Macquarie Bank, and U.S. private equity investor Texas Pacific Group, then falling back as legal and political hurdles emerged.

On Friday, the stock rose 0.2 percent to close at A$4.94 after Prime Minister John Howard said the government would not change foreign investment laws to block the Qantas takeover if it complied with existing laws.

"Whatever is allowed under the law will be permitted," Howard said in a radio interview with Southern Cross Broadcasting.

Howard said he shared the concern of Australians opposed to iconic Australian companies being sold into foreign hands, but that open markets were best for the economy.

"Emotionally I don't like it any more than you or your listeners," Howard said. "We can't have it both ways. We can't expect the world to be Australia's oyster yet resent it when foreigners buy into Australian assets."

News of the bid, as well as press reports that Belgium-based InBev SA is considering a bid for Foster's Group, the Australian brewer, have triggered nationalist sentiment in the Australia media and on talk radio.

Qantas, sometimes known as "The Flying Kangaroo" for its distinctive logo, is a major Australian company and a takeover by a foreign buyer is perceived to be politically sensitive. Federal elections are due next year, making the issue extra sensitive for the government.

The government owned Qantas until 1995, and passed legislation when it was privatized that sets a cap on the amount foreigners can own and other measures to ensure it is Australian-controlled.

Neither Qantas nor Macquarie have released details of the proposed deal _ priced by analysts at up to A$11 billion (US$8.5 billion; euro6.6 billion) _ but Macquarie says any bid would be made within existing laws.

The possible deal is believed to involve Macquarie taking a 25 percent of Qantas, other Australian investors another 25 percent, Qantas senior management 1 percent, and foreign investors led by Texas Pacific the remaining 49 percent.