An $8.7 billion bid for Qantas Airways was in disarray today after a key shareholder said it would vote against the offer.
Shares in the Australian carrier slumped as much as 6 per cent on fears the world's biggest airline takeover would collapse after fund manager Balanced Equity Management said it did not plan to accept the offer from a consortium led by Macquarie Bank.
While Balanced Equity holds about 4 per cent of Qantas, analysts said there were now fears other shareholders would also reject the bid, which needs the backing of 90 per cent of shareholders to succeed.
The bid consortium, Airline Partners Australia, said in a statement it was considering a "range of alternatives" in response to Balanced Equity's decision. It cannot legally raise its offer.
The sale of the national icon has been backed by the Australian government despite some political and union opposition.
The bid consortium is raising $8.4 billion in debt to fund the buyout, and the 90 per cent requirement is an important safeguard for debt holders.
Qantas shares fell 6.3 per cent, but recouped some of the losses to close down 3.1 per cent at 5.06 Australian dollars.