Technology

The hunter or the hunted? Webjet responds to acquisition speculation

Huntley Mitchell

Huntley Mitchell

Online travel agency (OTA) Webjet has responded to recent media speculation it is testing the market in the hope that it will be acquired.

Earlier this week, The Australian Financial Review reported in its Street Talk section that Webjet had enlisted the help of Goldman Sachs’ M&A team in Melbourne to see what the market’s appetite is like for the OTA.

Webjet had a stellar 2019 financial year, lifting its full-year profit by a whopping 45 per cent to $60.3 million.

At its annual general meeting last month, the OTA forecast its underlying earnings for FY20 to be between $157 million and $167 million – an increase of approximately 26 per cent to 34 per cent from last financial year.

The positive outlook came despite Webjet revealing back in September that its WebBeds business would likely take a $7 million earnings hit in FY20 from the collapse of Thomas Cook.

In a statement to shareholders yesterday responding to the recent media speculation, Webjet said: “The company’s objective is to create value for its shareholders, and from time to time, we consider acquisition interest in the business.

“Should a proposal be received that was compelling and certain, the company would put it to shareholders. No such proposal exists at present.

“Webjet continues to be focused on executing its growth strategy, as articulated at the recent AGM in November.”

And it appears Webjet’s response to the speculation was noticed by investors, with the company’s share price shooting up from $11.66 to close at $12.78 on Wednesday.

However, speculation that Webjet is looking to be taken over is in stark contrast to what the rumour mill was churning out last month.

The Australian named the OTA as one of several possible buyers of Aussie-based online travel business Luxury Escapes, and Webjet declined to comment when contacted by Travel Weekly.

Luxury Escapes CEO Cameron Holland has repeatedly denied parent company Lux Group is considering any active deals.

“As a rapidly growing business, we recognise that we are subject to interest and speculation in the market from time to time,” he told Travel Weekly.

“There are no current active opportunities being considered by Lux Group. However, we regularly assess the market and consider strategic options which will enable Luxury Escapes to continue to grow its market leadership position and deliver value realisation opportunities to shareholders.”

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