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Last Updated: Friday, 4 May 2007, 12:19 GMT 13:19 UK
APA admits likely Qantas defeat
Qantas tailfins
The takeover has faced strong opposition in Australia
A consortium trying to buy Australia's Qantas Airways has admitted that it does not appear to have gained sufficient shareholder support.

Airline Partners Australia (APA) said it seemed that it had not gained the 50% of Qantas shares it was required to own before a 0900 GMT Friday deadline.

It added that should this is confirmed, then "APA's offer for Qantas Airways will not proceed".

APA's $A10.8bn ($8.9bn; 4.5bn) bid had faced strong opposition in Australia.

'Job cut fears'

The APA consortium is majority led by Australian bank Macquarie, but also includes US buyout giant Texas Pacific and Canadian firm Onex Corporation.

A number of senior Australian politicians have attacked the takeover attempt, fearing that APA will both end a number of internal routes, and also migrate jobs to South Asia.

They also objected to the involvement of overseas firms in such an Australian company.

However, the Australian government has backed the deal, and APA had moved to alleviate fears over reduced fights and potential job cuts.

With more than 36% of Qantas shares in its hands by the end of Thursday, APA had been counting on a late surge in shareholder support.

Yet this appears to have failed to materialise, with media reports in Australia suggesting it only gained 46% acceptance.

If APA had passed the 50% mark before the Friday deadline, it would then have had another two weeks to get the figure up to 70% - the level at which it would be allowed automatically to buy out the remaining shareholders.

It has been offering $5.45 per share for the Australian airline, dubbed the Flying Kangaroo.

APA first announced its interest in Qantas six months ago.

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