Harvey World and Global parent set to be sold
Stella Travel Group, the Australian parent of Harvey World Travel, Global Travel Group, Travelbag and Travel 2 Travel 4, is being sold off by its parent MFS, according to reports in Australia.
The reports were confirmed today by Stella Travel Services UK managing director Andrew Laurie, but he claimed the move would not have any material impact on the UK business.
“The notion that Stella would be sold has been on the table for quite a long time. We have looked at various options and this is the latest development,” he said.
“Stella operates as an independent unit and it’s very much business as usual.”
MFS, the Australian finance and tourism business which is the 100% shareholder of Stella, asked to be put into a trading halt on Monday after several unsolicited offers for Stella, and following its failure to reach a deal with City Pacific which wanted to buy the company’s fund management side.
MFS CEO and founder Michael King stepped down on Monday after the company’s share price fell almost 70% last Friday over concerns that it is facing serious debt problems.
MFS’s new head, Craig White, told the Sydney Morning Herald today it was in talks with several possible buyers for Stella and a sale could be completed within weeks.
“We have a lot of proposals that we are assessing with several proposals for a partial purchase at the moment, but who knows where it will end,” he said.
Stella’s main rival in Australia, Flight Centre, has already said it is unlikely to pursue an acquisition.
In a statement to the ASX, Flight Centre managing director Graham Turner said: “FLT has historically been reasonably disciplined in applying its acquisition strategy and has only pursued businesses that could be acquired for the right prices to create significant shareholder value.
“For various reasons at this stage, we do not believe at this time that the MFS travel assets represent an attractive acquisition opportunity.”
Last year MFS tried to sell half of Stella to a private equity consortium led by CVC Asia Pacific but CVC failed to meet price expectations.
Industry sources in Australia said CVC was the most obvious bidder, but interest is also thought to be likely from British or European parties wanting to expand in the Asia-Pacific region.
The source said more interest was likely to be generated if MFS split up the tourism business and tried to sell it separately with the resorts side of the business likely to appeal to big hotel player Accor.
The Stella business includes a resort business which is the second largest in Australia.
In the UK, Stella completed the purchase of independent agency group Global in January.
Laurie ruled out a full merger between Harvey World Travel and Global but said it was now talking with members to explore opportunities.
By Bev Fearis in London and John Alwyn-Jones in Sydney
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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