CEO Chris Meehan leaves Travel.com.au post Wotif Acquisition

Avid readers will be aware of the battle between Webjet.com.au, AOT and Wotif for ownership of Travel.com.au (operators of the Lastminute.com franchise in Australia and New Zealand). This battle had Webjet in the early lead only for Wotif to claim a late victory based on a bigger cheque book. AOT walked away smiling, with a nice little capital gain. The deal formally closed on 1 Feb - you can read the full back story here.

News has been beginning to drip out on integration plans post Wotif owning Travel.com.au and Lastminute.com.au. The latest piece is that Travel.com.au CEO Chris Meehan will be leaving the business this month. Chris was caught in a very unfortunate piece of timing. On August 30 2007 Chris was annointed as the successor CEO to Adam Johnston at Travel.com.au. Just seven days later the Webjet offer hit the news wires and the roller coast ride to Wotif ownership started. It was always going to be the case that a merged/acquired Travel.com.au was not going to need a stand alone CEO so just days after be anointed as the new boss, Chris was sitting on a job that was destined to disappear. Tough timing. Am sure after a quick break we will see Chris back in the online world quickly.

WHOOT: Wotif.com secures AOT shares and secures Travel.com.au

WHOOT series update - WHoever Owns Outright Travel.com.au

Wotif.com has lodged what I am sure is their favourite filing of the year in stating that they have jumped to 82.129% of Travel.com.au through an acquisition of AOT's 19% stake. Travelweekly have some good commentary here from AOT CEO Andrew Burnes. Seems he was very interested in securing his distribution through Travel.com.au - though would appear he has made a nice profit as well.

There is now no reason for the remaining shareholders to keep a hold of their shares. Wotif have crossed the magic 75% barrier and this deal is over. Now all Wotif have to do is to figure out what to do with three brands in one market, HQs in two cities, two supplier teams talking to the same people, two CEOs, two maybe three technology platforms and a partridge in a pear tree.

UPDATE - 31 Dec up to 83.313%

UPDATE 2 - Wotif.com has declared its offer "unconditional". This means it does not matter if any other acceptances are made or not. Either way Wotif will purchase all the shares that have accepted the offer. To increase the certainty that this will be as many shares as possible, they have also extended the period for acceptance (for a second time) to 31 January 2008. In checking through the filings came across this great piece of advertising placement on smh.com.au



FINAL UPDATE - deal done! Confirmation that Wotif have 97% of the stock and can compulsorily acquire the rest. The offer formally closed today (1Feb08). TravelWeekly

WHOOT: Acceptances have slowed and Wotif needs more time

WHOOT series update - WHoever Owns Outright Travel.com.au

In our last instalment of the WHOOT, all seemed rosy for Wotif in its bid for Travel.com.au. The acceptances were flooding in driving the Wotif stake to 58% with 18 days to go. However in the last week the acceptances have slowed. On December 5 we had a filing for 59.2% and December 6 for 59.74%. Later on December the 6th Wotif tells us they are extending the deadline for acceptances from December 17 until January 11. AOT is still holding on to 19% which means that Wotif needs practically every other shareholder to accept to reach the magic 75% required. This ain't over yet.

WHOOT: 3 days, 3 notices and Wotif has more than 50% of Travel.com.au

WHOOT series update - WHoever Owns Outright Travel.com.au

The form 604s are flying thick and fast relating to Wotif's buyout plans for Travel.com.au. A 604 form is the "change of substantial ownership form". Through these forms we can track just how close Wotif is getting to owning Travel.com.au as the Dec 17 offer deadline approaches.

Tuesday Wotif hit 36.86%, yesterday 40.23% and today a massive 58.04%. The acceptances are flying in. No word in any of the filings if one of those acceptances is from AOT who before this rapid fire round of 604s owned just shy of 20% and seemed to be the only obstacle to 100% ownership for Wotif.

WHOOT: Webjet bidders statement - 10 ways of saying we are offering more money

WHOOT series update - WHoever Owns Outright Travel.com.au

The Wotif Bidders statement is out for Travel.com.au (TVL). This is the official statement passed on to all shareholders of TVL from Wotif indicating why shareholders should accept the Wotif offer. There are ten reasons listed but as predicted the main one is words to the affect of "we are offering a lot of money, you'd be crazy not to accept". It came out a few days after the TVL board had categorically rejected, unrecommended, threw out and junked the Webjet offer with a target 's statement headed "Do Not Accept The Webjet Offer" (in big capitalised red lettering).

What AOT will do in response to the Wotif Bidders Statement is still the great unknown in this deal.

WHOOT: AOT climbs to 19.9% and Webjet claims it is back in the hunt

Time for another The WHOOT series update - WHoever Owns Outright Travel.com.au.

Long term Travel.com.au (TVL) shareholder and director Daniel Droga has sold more than 9% of TVL stock to the "quiet accumulator" AOT - who can now claim 19.9% of the stock. This is not enough (yet) to completely end the Wotif charge for TVL ownership as Wotif have made it clear tha they would be happy with 75% - bit it is close.

Webjet have also come back swinging claiming that with recent increases in Webjet stock value, the Webjet offer is now worth more than the TVL Board recommended Wotif offer. We are still yet to see the official Wotif bidders statement.

WHOOT: Wotif are happy, AOT even happier

Wotif have defended the price tag of $55-57mm for Travel.com.au despite the fact that profits will come next year. But COO Robbie Cooke in an interview with Travel Today has given away little in terms of what the strategy will be (see my thoughts from yesterday) other than to day that flights will be a benefit to Wotif. I continue to suspect that its more Lastminute.com.au that they are interested in than a flights engine.

Meanwhile AOT has continued its steady acquisition of TVL stock, now claiming more than 10% according to today's filing. CEO Andrew Burnes can at his leisure now decide whether or not to keep a stake in a business controlled by Wotif or sell for what we presume is a reasonable return. Well played.

WHOOT: Webjet are out - it is all over bar the AOTing

It seems smooth sailing now for Wotif in their chase for the Travel.com.au ownership title. The Travel.com.au board have backed Wotif, Wotif have their hands on 19.5% of the stock and Webjet have just announced that they are pulling out of the running. Webjet MD David Clarke is quoted in Travel Today as saying

"We wish Wotif the best. Time will tell whether the value Wotif attributed to the business is prudent. We did not believe it was for our shareholders but Wotif’s shareholders and board may have different perspectives."

This does not mean that we at the WHOOT are calling it all over in the battle for WHoever Owns Outright Travel.com.au. There is still the matter of AOT's shareholding and if this battle has taught us one thing it is that ain't over 'til its over.

WHOOT: Wotif takes the lead, gets backing of the Board and buys out netus

Wotif has taken the clear lead in the battle for WHoever Owns Outright Travel.com.au (WHOOT). Filings today confirm not only has the Travel.com.au (TVL) board come out and unanimously recommended the Wotif bid but that Wotif is already a substantial shareholder having bought out venture firm Netus' 19.5% stake as well as holding commitments from executives for a further 9.4%.

Wotif have amended their offer to two tiers depending on whether or not they gain 75.1% or 90% acceptance. Presumably a tactic to both entice AOT to sell their almost blocking stake and provide protection if they don't AOT engaged. At 75.1% they have more than enough for control.

Range in valuation of Travel.com.au and Lastminute.com.au is thus $55-57mm depending on which threshold they reach. Market cap before the announcement was $61.4 mm so in theory is a discount on market. But in reality this is bid is almost 40% above the price range prior to Webjet's first bid.

What will Wotif do with the business? Could we see the amusing situation where they maintain both the Lastminute and Wotif brands but with Wotif as the last minute brand - focusing on only 28 days out - and Lastminute is the "full service" brand that services 365 days a year. Air is clearly not the priority here (unless I am missing something).

Travel Today have the story here as well.

WHOOT: meanwhile AOT keeps buying Travel.com.au stock

While the TVL (Travel.com.au) Board has freed itself from its recommendation of the Webjet offer, AOT is quietly increasing its stake in TVL. It now has 9.03%.

Introducing the WHOOT sub-blog - WHoever will Own Outright Travel.com.au

Over the next few weeks it is inevitable that the pages of the BOOT will hijacked at times by the WHOOT (WHoever will Own Outright Travel.com.au) as the battle for Travel.com.au between Webjet, Wotif and AOT (with more to join?) reaches its conclusion. Will try to keep you as updated as possible.

Latest just before the weekend break was the Board of Travel.com.au advising shareholders to do nothing (ie accept neither offer) while the Board considers what advice to give. No date for a recommendation to be delivered.

Seems the Board did have time to approve the issue of 175,000 shares to employees under the employee share program. Just in time.

The advice also contains a summary of the agreement between Webjet and Travel.com.au stemming from the original Webjet offer. Highlights of the Implementation Agreement" and the "Pre-bid Acceptance Agreement" include:

• Non-solicitation obligation: preventing Travel.com.au from looking for other bidders. Indicates that Wotif and AOT are acting independently of any prompting from the Board or TVL execs. This means Wotif and AOT have relied only on public data for their bids;
• Matching Rights: Webjet gets the right to submit counter-proposals to bids from others but the there is not absolute obligation on the Travel.com.au Board to accept a Webjet counter-proposal;
  
• Break Fee: If the Board rejects the offer from Webjet then Webjet is entitled to a $250k break fee (unless "the recommendation is withdrawn on the basis that an independent expert appointed by TVL has concluded that the Offer is neither fair nor reasonable" which would presumably be able to be achieved if there is a higher offer on the table but maybe not); and
• The Webjet Pre-Bid 19.9% is not as sewn up as they would like: under Pre-Bid Acceptance Agreement Webjet gains rights of 19.9% of the stock from lead shareholder Co-Investor. However, Webjet cannot enforce this right if another offer is received, accepted by the board and Webjet does not increase its offer within 10 days.

Game on!

401 not out

Time for my "not out series" - a regular summary of the last 100 posts that I first started with 101 not out and continued with 201 and 301.

Without a doubt this recent period of posts on the BOOT have been dominated by consolidation and deals:

• Lonely Planet admitted that it could not meet the challenges of the Internet on its own and sold out a majority stake to the enterprise division of the BBC;
• Opodo shed Karavel with the story being broken by an blogger from the inside;
• TUI made a bad decision in buying asiarooms and once again search traffic predicted a deal;
• the battle for Travel.com.au (who now own the lastminute.com brand outright in AU/NZ) is not yet over with Webjet and Wotif at each others throats and AOT sitting not so quietly on the sidelines;
  
• Rakuten made some healthy profits and set itself for further expansion by selling out of Ctrip;
• the Flight Centre privatisation fell in a heap in an embarrassing way for the Flighties board;
  
• rumours flew that Priceline want Travelzoo and the comments section filled up with a debate on the merits of this idea; and
  
• we have the as yet to be confirmed rumour that TravelCLICK are about to be bought.
  

In other general news

• every media outlet there is ran a story about how bad the US air industry is prompting me to run my own series of the Airline Industry brought to you by BusinessWeek, the Legal Fraternity, Wharton, NPR, the Economist and Pizza Hut. Conclusions were that the US air traveller is stuffed and no-one is taking responsibility. In fact Marion Blakely quit as head of the Federal Aviation Authority to join the peak airline lobby group the Aerospace Industries Association;
• the T-List is soon to be a book. The BOOT submitted three stories:
• UGC vs Editorial. What's better? What's the balance? What's more 2.0?;
• Helping Airlines Stay on top; and
• the fourth phase of online travel - "too much information"; and
• it looks like Dead Herring for Red Herring.
  

and in quirky news

• one muppet shouted at two others;
  
• a lion, a crocodile and a buffalo tried to sort out their differences the old fashioned way; and
• the BOOT saved the world by defusing a jar of olives.

I hope you're enjoying reading because I am enjoying writing.

And now there are three - AOT joins the hunt for Travel.com.au

Am in an airport lounge struggling to stay in touch with the moves and shakes around the Travel.com.au acquisition. Now we learn that top tier Australian wholesaler and second tier online retailer AOT has joined the hunt for Travel.com.au. According to the SMH they have already got their hands on 7.8% of the stock and are looking for more. AOT already operate needitnow.com.au and content player Travelmate. Also recently snapped up little known player NeedtoEscape (story here). At the very least AOT boss Andrew Burnes has built a nice little blocking stake. Anyone else out their want to join in?

Thanks to Grah from Voysage who sent me the story first.

A little taste of consolidation in the Australian market

Blink and you would of missed it (especially in the $10.5billion online advertising acquisition bonanza) but mainstay of the wholesale travel business in Australia - AOT ("hey the O is for Online not Outback, OK!") - gobbled up the little known NeedtoEscape and rolled it into its small but plucky stable of online travel assets including Travelmate (content and destination information) and needitnow (hotels). Here is the TravelWeekly pdf with the story.

Not quite sure what it adds to their offering as they already have supplier strength from their offline business, some online demand from needitnow and its partnership deals (like Sensis' GoStay - which as I said before is a white label of needitnow) and content traffic in Travelmate. I do not see that much in the NeedtoEscape offering that adds value but maybe it was so cheap a price that it was worth it.

From his quote in the TravelWeekly article Russel Farr (MD of NeedtoEscape) is joining our understatements of the year competition when he declared that the online [travel] market is "going gangbusters". With global online sales at $139billion a year, I wasn't sure. But now that AOT has bought NeedtoEscape "for an undisclosed sum" I am.