Qantas, Private equity and conflicts

Terry McCrann quite rightly takes a stick to Qantas' management over the recent failed private equity bid, highlighting the conflicts that exist when incumbent management (or board members) are part of the bidding team.

It's often the case that management will talk up the prospects of a takeover target so as to extract top dollar for the target shareholders, but in this case folks on the board of Qantas seemingly had a financial incentive to talk down the prospects, so that they could acquire the shares at a lower price. This would explain why Qantas seemed so reluctant to release its earnings forecasts, which showed that things were better than investors had been led to believe. Turns out even those forecasts were pessimistic. I'll have a look at the Qantas results soon - I'll be interested in whether Qantas seems optimistic or pessimistic with respect to its accounting estimates. I'm predicting pessimistic.