The bizarre failure of the private equity bid for Qantas has raised a lot of questions and destroyed quite a few reputations. Starting with the qantas board, led by chairman Margaret Jackson, and the bidders at Airline Partners Australia (APA)

More to the point, it has highlighted the greed of hedge funds which scuppered the deal to secure one of the world's best-run airlines.

Here was the arrangement: APA had to get 50 per cent of Qantas shares by Friday May 4. Under Australia's takeover rules, getting 50 per cent would give APA another two weeks to secure the 70 per cent it needed for the bid to succeed.

Enter the hedge funds. Hoping to make extra millions of dollars with their arbitrage games, they were looking to orchestrate a result where the bidders would get just over 50 percent, giving them another two weeks of uncertainty and opportunity to buy stock below the offer price. But they miscalculated and the 50 per cent level was never reached.

"The rationale for gambling that APA got 50 percent and no more was to ensure that the stock continue to trade at a discount, thereby allowing them to continue to pick up a few extra pennies," an analyst told Reuters.

The moral of the story: never stand between a hedge fund and a bag of money.

Still, you have to ask how APA allowed itself to be screwed over by the hedge funds. And how could a bunch of people who are paid such monstrously huge amounts of money get it so wrong?

My colleague Malcolm Maiden puts it down to a lethal combination of greed, bad judgement calls and mis-communication.

So what happens now? Another bid is expected because APA has already spent a fortune on this endeavor. But even if they come back with a higher offer, there'll be problems getting over the line.

I look at the reasons why here.