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Many Magellan agents have approached Express Travel

January 29, 2018 Headline News No Comments Email Email

Magellan Travel Group agents are still deliberating whether to join Helloworld, with Magellan management expressing renewed confidence that they will agree to do so and a host of other suitors advising Magellan members to take their time and consider all options.

Asked on Thursday how confident he was that Magellan members would join the move to Helloworld (following meetings on the subject with members last week) Magellan director Andrew Macfarlane said simply: “We’re confident.”

Macfarlane declined further comment, explaining: “We’re working through it all with our members, which is the priority.”

Meanwhile, conjecture continues full force. Reports circulating in the industry say that the allocation to the Magellan founders has shrunk greatly from the level originally proposed while the proposed allocation to the 110 Magellan member agents has increased mightily – purportedly increasing in three stages from about AUD 6 million to AUD 20 millon. This is said to have greatly sweetened the deal from the standpoint of members.

Other groups are certainly keen to woo Magellan members. Express Travel Group has suggested Magellan agents could prosper by forming their own platform under the Express Travel Group umbrella. (See: Express Travel offers Magellan agents a new home.)  Ensemble Travel Group, based in North America and very active in Australia, is also interested. (See: Now three players are keen to woo Magellan agents.)

Express Travel Group chief executive Tom Manwaring said on Thursday that “probably 30%” of Magellan’s members had contacted him over Express Travel’s proposal.

“We are talking to people who want to talk to us,” Manwaring said.

“They are rightly looking at all the options and I think that’s a very healthy thing for them to do. There’s no rush. The members will want all the facts in front of them in writing before they make decisions.”

Manwaring said Express Travel was trying to ensure that Magellan members were fully informed before they made their choice.

“They are independent business people so at what price do you protect your independence?”

Manwaring referred to a widely circulated “open letter” by Magellan founder and former director Kevin Dale, who noted that Magellan had been founded with a transparent system of distributing income: 85% to all members; 15% to the founders. In the letter published in industry publication Travel Daily, Dale suggested Magellan agents agree to the sale to Helloworld only if most members supported it – and the proceeds of any sale should be distributed 85% to all members and 15% to the founders.

“Kevin seems to be right on the money there,” Manwaring commented on Thursday. “If it’s an 85/15 agreement in place then an 85/15 agreement should apply. It’s pretty basic. That’s for them [Magellan] to sort out but I would have thought if the members aren’t getting 85/15 they should keep their option to look elsewhere.”

Manwaring said Magellan agents had several options, with many industry players keen to win them over.

“That’s fine, it’s what happens in a capitalist system!” Manwaring said.

“They have to remember that they are the value. It’s not like buying a company – this is about the value of a whole heap of individual independent businesses. It’s a buying group, no more no less.”

Helloworld’s original estimate was that its acquisition of the Magellan Travel Group would be completed “in early January 2018”.

February begins on Thursday and deliberations continue.

“We’ll see what February brings,” Manwaring said. “It’s the Year of the Dog. We’ll see who’s doing the barking and the biting!”

Written by Peter Needham

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