Hazelton takeover proposals rejected

By Phil Boeyen, ShareChat Business News Editor

Thursday 18th January 2001

Air New Zealand (NZSE: AIRVA) and Qantas have been stymied in their battle for NSW regional carrier Hazelton, with the Australian Competition and Consumer Commission rejecting revised proposals for a takeover of the airline.

Air New Zealand's Australian unit, Ansett, has been in a bidding battle with Qantas over Hazelton for several weeks. The last offer by Ansett was A$1.60 for each Hazelton share while Qantas has offered A$1.50.

Although the ACCC had already rejected the takeover bids both airlines have been trying to work through an acceptable solution with the commission.

ACCC acting chairman Rod Shogren says neither airline could allay its concerns about lessening competition.

"The ACCC's initial concerns related to the effect on competition that the acquisition would have in regional markets.

"These concerns were compounded by the presence of high barriers to entry arising from the limited ability of airlines to access landing or take off slots in Sydney at popular times.

"Initially, the ACCC was also concerned that if Qantas or Ansett gained control of Hazelton's slots it could move regional services out of peak times and provide additional interstate services, lessening competition in both regional and interstate markets.

"After carefully considering their terms, the ACCC concluded that neither of the bids, which were very different to one another, would address the competition concerns that it had with respect to the original proposals."

Ansett has already stated it plans to hold onto its 20% stake in Hazelton no matter the outcome of the commission's finding.

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