It has been an interesting time for Tony Stumm of Brisbane law firm McCullough Robertson Lawyers, who has been working with Queensland-based travel company S8 on two mergers simultaneously.
The mergers are with Transonic Travel Limited, a service provider to the airline and travel industry and Travelscene Limited, one of the largest independent franchise travel agency groups in Australia.
Stumm said the bidder’s statements for both had been lodged, and were at different stages of their development. “The [Transonic] bidder’s statement is with the target company shareholders so S8 is in the process of receiving acceptances, and the other bidder’s statement is on the verge of being posted out.”
The Travelscene merger was announced first, and is to be conducted by way of takeover offers for each of the three classes of Travelscene shares, valued in aggregate at approximately $67 million, comprising about $35 million cash and $32 million in S8 scrip. Also, subject to S8 declaring the takeover offers unconditional, Travelscene will pay a fully franked $3 million cash special dividend to eligible Travelscene shareholders holding I Class and Reward Class Travelscene shares.
The merger with Transonic will create a diversified group valued in excess of $375 million, with three core business streams — leisure, travel industry services, and air services. The offer will be conducted by way of an off-market takeover offer for all Transonic shares.
The merged company will be one of Australia’s largest integrated travel companies. Following the mergers with both Transonic and Travelscene, S8 will have a market capitalisation in excess of $480 million.
Stumm said the fact that Travelscene had different classes of shares on offer had complicated things a little, “but we were able to price and structure the bid so we were able to make the offer to all shareholders”.
He said it had been challenging to work on the matters simultaneously, and joked that his job hadn’t been made any easier by the fact that both target companies had names starting with ‘T’. “It’s a little bit novel to have the same client with two takeover bids on at the same time, but I am very much enjoying my association with S8,” Stumm said. “It is a company that is absolutely going places.”
S8 has also announced a joint venture with Virgin, although this was negotiated directly by the company. S8’s wholly owned travel brand Harvey World Travel and Virgin Holidays to create a network of 300 dual-branded “high street” stores.