Helloworld to acquire AOT Group?

Helloworld to acquire AOT Group?

Helloworld has this morning responded to media speculations that it is in the midst of acquiring AOT Group.

According to reports from the Australian Financial Review, there are whispers within market circles that the Helloworld board, led by former Qantas general counsel chief Brett Jonson, has had serious discussions about a potential deal.

Helloworld has confirmed that they are in discussions with AOT Group regarding a potential acquisition of AOT by Helloworld.

“The evaluation of the potential acquisition is still in progress. No transaction has been agreed or approved by the Helloworld Board and there is no certainty that the current discussions will lead to any transactions,” Helloworld said in a statement.

But AOT certainly has a close relationship with Helloworld, as AFR points out, and aside from AOT’s chief exec Andrew Burnes’ shareholding, AOT bought Helloworld’s inbound tour unit ATS Pacific in August 2013.

The two companies continue to do business together and a potential merger would allow AOT to sell its travel services through Helloworld’s distribution network of 700-odd travel agencies.

AFR also made note that this could be a reason for why a replacement for outgoing CEO Elizabeth Gaines has not yet been announced, despite the board saying it is “well advanced” in finding a new CEO.

Helloworld is understood to have retained Fort Street Advisers’ Ben Keeble (a former CVC and UBS executive) for advice, which has helped stoke the speculation.

Helloworld also needs to improve its paper-thin margins, according to AFR, with its FY15 underperforming compared to fellow listed agent Flight Centre, who returned 65% for shareholders over the past five years, while Helloworld lost about the same for investors.

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