By Martin Kelly, Editor, Travel Trends
A WILD card in the shape of the AOT Group has emerged as a dark horse in what may now be a three-way fight to buy travel.com.au. AOT yesterday revealed it has accumulated a 7.74% stake in TVL, buying into the company at up to 63 cents a share – an extremely bullish price and way more than either of the two “official” contenders – Wotif.com and Webjet – have offered shareholders for control of the company.
AOT, one of Australia’s largest privately-owned travel companies with online brands that include needitnow.com.au, has made no comment on its intentions, but one thing is for sure – it will have a huge say in determining the future of what has become Australia’s most sought-after travel company – owner of the travel.com.au and lastminute.com.au sites. TVLS’s value has increased from A$33m to $55m in less than a month.
And to think that just three week ago Webjet looked home and hosed at 42 cents a share. A day or two after making that offer, ever-modest Webjet boss David Clarke considered the deal a fait accompli, outlining a future where online retail rivals wouldn’t stand a chance, telling Travel Today that “the combined entity will open up a large lead over Flight Centre and a ‘huge gap’ over the rest”.
“It will be game over”, Clarke said.
Clarke should have known better – the game is far from over. That first become obvious on Friday when TVL said it had been approached by an unnamed suitor, which turned out to be online accommodation powerhouse Wotif.com.
Wotif, the true giant of Australian online travel retailing with a 06/07 full year after tax profit of A$26m, is now offering TVL shareholders 55 cents cash per share or the equivalent in Wotif shares. Webjet’s current bid is at around 52.5 cents (22 cents, rest in shares).
The TVL board, which initially recommended the Webjet bid, has told its shareholders to sit tight and do nothing.
The Wotif bid is an interesting move and could be interpreted a number of different ways. It provides diversification, takes a potential competitive threat (lastminute.com.au) out of the picture, and opens up further distribution channels for its accommodation product.
It also allows the company to gain a better understanding of the entire travel industry, while giving it the opportunity to start selling air via the TVL-owned Arnold booking engine on its own site.
For now, Wotif COO Robbie Cooke is saying: “We are excited about the opportunities that will arise from combining both companies – we will be able to significantly enhance TVL’s accommodation offering and be able to explore avenues to leverage off TVL’s other products.”
One thing Cooke isn’t saying is: “Game over”.
Travel Trends: October 3, 2007