Helloworld has re-started talks with its substantial shareholder AOT Group and the two parties are once again considering how best to get together and take on Flight Centre.
When a report to that effect surfaced in the Australian Financial Review yesterday, Helloworld Limited swiftly issued a statement about it – but only to confirm that the report was, in effect, correct.
“HLO [Helloworld Limited] confirms that it has recommenced discussions with AOT regarding a potential merger transaction,” the statement said.
“HLO is committed to the long-term growth of its business for the benefit of its shareholders, franchisees, members, suppliers and employees.”
Helloworld added that it issued the announcement in light of press speculation yesterday (the AFR report) and would “update the market in accordance with its continuous disclosure obligations”.
A couple of months ago, Helloworld said it had failed to strike a deal with AOT and they were no longer negotiating. The AFR yesterday, however, cited company sources who said the two companies were in fact back working on a transaction “which would create a business with more than $20 million annual profit and $400 million revenue”.
The AFR said Helloworld shareholders were understood to be keen to see a tie-up between the two companies and were frustrated about Helloworld’s continuing inability to make a “dent” in the business of Flight Centre Travel Group. Shareholders were also disgruntled with Helloworld’s “inability to get shareholder returns anywhere near Flight Centre’s”.
Qantas Airways is Helloworld’s biggest shareholder with a 28% stake, followed by private equity firm CVC Asia Pacific with 23.3%. Businessman Spyros Alysandratos’ Sintack Pty Ltd holds 19.99% while Andrew Burnes, the chief of private inbound travel company AOT Group, has 10.21%. UBS Australia holds 6.96%.
Helloworld comprises retail travel businesses, air ticket consolidation, wholesale, corporate and online operations. This includes helloworld, Australia’s largest network of franchised travel agents, and helloworld.com.au.
The overarching helloworld brand was envisaged initially as replacing the time-honoured brands Harvey World Travel, Jetset Travel, Travelworld and Travelscene American Express – though it has not entirely done so.
Written by Peter Needham