Jetset fails to meet merger detail deadline

The shareholders still have not received an explanatory memorandum and independent expert's report, both of which Jetset promised to send out by last week. It has led to speculation that the competition regulator or the Foreign Investment Review Board is demanding more information about the proposed merger.

Jetset released minimal information when it announced the travel industry's worst-kept secret in early May, preferring to reveal all later in the memorandum, which it said would take six to eight weeks.

The chief executive-designate of the merged company, Peter Lacaze, referred questions yesterday about why there had been a hold up to Jetset's boss, Peter Collins, or its chairman, Tom Dery, but neither could be reached for comment. Jetset has said the memorandum will contain detailed information on the privately owned Stella and pro forma financial details about the merged entity.

So far, information on Stella whose brands include Harvey World Travel and Travelscene has been limited to the fact that it made $30.9 million in pre-tax earnings (excluding one-off items) last year, on revenue of more than $200 million. It has also said that Jetset will inherit $40 million in debt from Stella.

A shareholder meeting to approve the merger is due to be held next month, although it is seen as a formality because Jetset's controlling shareholder, Qantas, has indicated it will give its blessing.

Qantas will remain Jetset's largest shareholder after the merger, but with its stake diluted from 58 per cent to 29 per cent. Jetset's other major shareholder, Spiros Alysandratos, will have his stake halved to 12.6 per cent.

Stella's majority owner, the private equity group CVC, will have a 26.9 per cent stake while UBS will have 17.9 per cent in the merged company.