Shareholders back Jetset Travelworld and Stella merger

JETSET Travelworld shareholders have overwhelmingly approved a merger with fellow travel agency Stella Travel Services.

By InvestSMART · 7 Sep 2010

By InvestSMART ·
7 Sep 2010

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JETSET Travelworld shareholders have overwhelmingly approved a merger with fellow travel agency Stella Travel Services.

More than 99 per cent of Jetset shareholders including 58 per cent owner Qantas voted in favour of the $351 million deal yesterday, which will give the two travel retailers more than 2000 shops across Australia, helping it rival market leader Flight Centre.

Stella's brands include Harvey World Travel and Travelscene, while Jetset operates Qantas Holidays and Qantas Business Travel.

The merger is expected to be completed by the end of the month, subject to Foreign Investment Review Board approval.

The Australian Competition and Consumer Commission said last Wednesday it would not block the merger, sending Jetset's shares 17 per cent higher that day.

Qantas's stake in the combined entity will be halved to 29 per cent. Stella's majority owner, private equity group CVC, will hold a 26.9 per cent stake after the merger while investment bank UBS will hold 17.9 per cent.

Jetset's chairman, Tom Dery, who will head the merged entity, said he was delighted with the outcome of the vote and he was looking forward to getting on with the job.

The merged entity will remain listed on the ASX and will be led by Stella's chief executive, Peter Lacaze. Jetset's chief executive, Peter Collins, will return to Qantas.

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Frequently Asked Questions about this Article…

What did Jetset Travelworld shareholders approve in the merger vote?

Jetset Travelworld shareholders overwhelmingly approved a merger with Stella Travel Services, with more than 99% voting in favour (including 58% owner Qantas) of the A$351 million deal.

How big will the merged Jetset–Stella travel group be and how will it compete with Flight Centre?

The combined group will operate more than 2,000 shops across Australia, giving the merged Jetset–Stella business greater scale to rival market leader Flight Centre.

Which travel brands and operations are included in the Jetset and Stella merger?

Stella’s brands include Harvey World Travel and Travelscene, while Jetset operates Qantas Holidays and Qantas Business Travel — all of which will be part of the merged entity.

When is the Jetset–Stella merger expected to be completed and what regulatory approval is still needed?

The merger is expected to be completed by the end of the month, subject to approval from the Foreign Investment Review Board (FIRB).

Did regulators block the merger and how did the market react?

The Australian Competition and Consumer Commission (ACCC) said it would not block the merger, and Jetset’s shares rose about 17% on the day of that announcement.

What will the ownership stakes look like after the merger (Qantas, CVC, UBS)?

After the merger Qantas’s stake in the combined entity will be halved to 29%, private equity group CVC will hold about 26.9%, and investment bank UBS will hold around 17.9%.

Who will lead the merged company and will it remain listed on the ASX?

The merged entity will remain listed on the ASX. Jetset’s chairman Tom Dery is set to head the merged group, while Stella’s chief executive Peter Lacaze will lead the business operationally.

What happens to Jetset’s chief executive Peter Collins and Qantas’s role after the merger?

Jetset’s chief executive Peter Collins will return to Qantas, and Qantas will continue as a significant shareholder with its stake reduced to 29% in the combined company.