In a significant development in the Australian travel sector, BGH Capital has raised its takeover proposal for Webjet Group to AUD 0.91 per share, positioning itself ahead of Helloworld Travel's recent bid of AUD 0.90 per share. This increased offer values the online travel platform at an estimated AUD 357 million and indicates intensifying competition for control of the ASX-listed company, which is currently navigating challenges in the leisure travel market.
BGH Capital, which already holds an 18.3% stake in Webjet through partnerships with Ariadne Australia and investor Gary Weiss, has secured a confidentiality agreement to commence due diligence on the company. Meanwhile, Helloworld Travel, which owns a 17.3% stake in Webjet, has framed its bid as a strategic merger aimed at forming a substantial travel bookings entity.
The acquisition proposal from BGH is contingent upon several conditions, including a minimum acceptance level of 75%, a favorable recommendation from Webjet's board, and necessary regulatory approvals. The recent uptick in Webjet's share price, rising nearly 3% to its highest level in two months, reflects investor optimism surrounding the potential for a competitive bidding process.
The strategic rationale behind BGH's revised offer stems from its desire to capitalize on the increasing demand for travel bookings post-pandemic, despite Webjet's recent report of a 9% decline in first-half underlying earnings attributed to softer leisure travel demand amid rising cost-of-living pressures.
Looking ahead, both BGH and Helloworld have been granted access to conduct due diligence, signaling that the competition for Webjet is likely to intensify in the coming weeks. As the situation develops, market observers will closely monitor the regulatory landscape and the responses from Webjet's management as they navigate this pivotal moment for the company and its shareholders.