BGH Capital has teamed up with corporate raider Gary Weiss and Ariadne to amass almost 11 per cent in Webjet Group ahead of a $314m buyout plan by the private equity firm.
Webjet on Tuesday said BGH had put forward an offer of 80c a share to buy the business.
It comes as Webjet’s travel rival Helloworld on Monday emerged as a substantial shareholder with just over 5 per cent and the buying of the stock in what appears to be a clear signal that the $350m online travel website operator is in play.
A substantial shareholder notice lodged to the Australian Securities Exchange late on Monday revealed that BGH, Ariadne and Gary Weiss were working together as part of a co-operation agreement, holding 10.76 per cent.
“The parties will consult with one another as to how they will exercise the voting rights of their shares on each resolution at any meeting of the members of Webjet Group,” the statement said.
The statement also said that the agreement did not preclude BGH and its subsidiary, Oceania, from acquiring further shares in Webjet but for six months, and it came with a six month standstill agreement where the parties would not pursue a joint bid with a third party.
BGH’s holding in Webjet was revealed on the ASX on Monday night after a lodgement to the ASX earlier that day showed that the $260m Australian listed Helloworld had been buying shares from April 10 to May 9.
BGH had been buying since at least April 28, while the interests of Dr Weiss have been amassing stock in Webjet since at least late last year.
Shareholders were left puzzled on Friday by a trade from a likely suitor - thought to be BGH Capital - searching for 5 per cent of the stock, but winding up with just 1.8 per cent.
The trade, executed by Macquarie Capital on Thursday night, saw the buyer secure shares at 80c each, which was the price that Webjet’s shares closed at on Thursday.
A term sheet sent to investors said that the offer of 80c a share was a 40.4 per cent premium to Webjet Group’s undisturbed share price on April 24 of 57c, and a 72 per cent premium to its low on April 7.
The acquirer was looking for about 19.6 million shares, and added that the buyer had a stake below 5 per cent.
With an acquisition of Webjet seemly on the agenda of the buyer, which may have been searching for a blocking stake, shareholders looked to be unprepared to sell up to the group that already had under 5 per cent, as they were holding out for a higher price.
The stock has been out of favour for investors, with its market value slumping following its demerger last year of WebBeds and with rising interest rates crimping consumer travel.
The demerger was followed by a profit downgrade at WEB Travel Group two months after the deal occurred, and shares are down 7.7 per cent this year.
Challenges were compounded by the online travel agency coming close to collapse amid the global pandemic.
Dr Weiss is a high profile figure in the Australian corporate world, known for his corporate plays on Australian listed stocks.
He is currently chairman of Cromwell Property Group and Dreamworld owner Coast Leisure, and is a director of Myer, Thorney Opportunities as well as the Australian listed diversified investor Ariadne, of which he owns about 34 per cent.
In recent corporate plays, Dr Weiss was on the board of Ariadne when it raided Coast Leisure’s register in 2017 when it was called Ariadne with a view that the business was undervalued, and agitated for management and board changes, calling an extraordinary general meeting.
A similar move was made on Cromwell in 2019 when Dr Weiss gained representation on the property group’s board on behalf of its shareholder at the time, ARA.
BGH Capital owns Coast Leisure’s rival, Village Roadshow, which owns the Sea World theme park, near to Dreamworld on the Gold Coast.
However, DataRoom understands that the latest play does not extend to any plans for a tie up between those two businesses.
The Melbourne-based BGH, headed by former TPG Capital executives Ben Gray and Simon Harle, and ex Macquarie Capital boss Robin Bishop.
It profited form its online travel website investment TripADeal, selling a 51 per cent stake in the business to Qantas for $211m after investing in the business in 2020 to secure joint ownership with its founders.
Webjet’s online business allows users to book and compare travel products like flights, hotels, car rentals and travel insurance.
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