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The Webjet plan that sparked a fight with big egos and big moneyWhen a company’s five-year plan is more attractive to suitors than investors, the conditions are set for a delicious takeover battle. Webjet is one to watch.Jun 1, 2025 – 10.39amSaveShareGift this articleNewly orphaned, overlooked and unloved, online travel agent Webjet could’ve disappeared from the ASX and not too many investors would have blinked.New chief executive Katrina Barry had a chance to turn sentiment at the company’s inaugural strategy day on March 19. Six months into the job, and six months after Webjet was spun off by bigger brother Web Travel Group (a newer B2B booking company that swamped its B2C stablemate), she pitched a five-year plan to revitalise the company’s “iconic” brand (Webjet’s words, not ours), expand its addressable market, launch a loyalty program and double the value of annual transactions by 2030.Webjet chief executive Katrina Barry has had a baptism of fire. Eamon GallagherThem fighting words bombed. If anything, they may have revealed the investment required to shore up Webjet’s long-term future – the once successful disruptor to travel agencies, founded in 1998 and still with 50 per cent market share in online agency flight bookings in Australia and New Zealand, is at risk of being disrupted by agentic artificial intelligence.All fund managers saw was near-term spending: $15 million this financial year, including $10 million on incremental brand/marketing spend (a lot for a small cap that just reported a $20 million normalised annual profit). They also worried that new management may blow a $100 million cash war chest on acquisitions (once again, a big inheritance for a small cap worth only a few hundred million dollars).Webjet shares, already down 25 per cent this year, dropped a further 15 per cent and kept drifting lower. They were cheap and getting cheaper.But that fateful March investor day would also help spark an unlikely takeover tussle.Remarkably, Webjet is now in play. One of Australia’s top private equity operatives, Ben Gray, veteran corporate raider Gary Weiss, and former Liberal Party federal treasurer Andrew Burnes, a wily travel industry executive who has form in similar deals – a delicious combination of big egos, big money and even big hair – are all on the scene.The first offer from BGH Capital co-founder Ben Gray was underwhelming. David RoweIt’s a good reminder that sometimes if you cock up the message badly enough, you can become attractive for the wrong reasons.“The price was just screaming for someone to do something,” as one person involved with a bidder put it. The interest is earlier than Webjet’s board would have liked, as the old brand in online travel was only spun off last September.The suitors turned up separately, unbeknownst to each other, attracted by the cheap price and motivated by different things.Gray’s BGH Capital likely saw the multi-year reset required (the brand, the capex, the AI defence) and wanted to do it away from the ASX, where investors scream for consistent earnings growth and dividends.Weiss’ Ariadne Australia likely saw the cash-backing and Webjet’s strategic quagmire. While Burnes likely saw cheap stock and a rare chance to perhaps combine online-only Webjet with his agency business Helloworld (an even smaller and arguably more forgotten about ASX-listed small-cap trading at a miserly 2.6-times forecast earnings before interest, taxes, depreciation, and amortisation).Helloworld chief executive Andrew Burnes. Daniel MunozAriadne bought heavily after the March 19 strategy day, Helloworld started buying on April 10 and BGH on April 28, according to their respective filings. Webjet shares started running just after ANZAC Day, as the BGH and Helloworld buying stepped up.Webjet’s board, hit on the backside by a rainbow, isn’t having a bar of any of them (yet).BGH tried raiding after Webjet’s share price bolted, failed to get much stock but still put forward an offer – an underwhelming and under-baked 80¢ a share cash proposal that was below Webjet’s last traded price and where the structure wasn’t even determined. The board swiftly rejected it.Burnes called Webjet chairman Don Clarke, a long-time MinterEllison partner, to chat about a tie-up and is yet to follow up with anything firm. He keeps hoovering up stock and is up to 15 per cent of the target.Strangely Weiss, who’s been buying and selling businesses since Webjet management’s team were in nappies (if not longer), has tucked into BGH’s bid, probably thinking working together is better than going toe-to-toe and driving up the price even more.Gray and Weiss make for an unlikely pair – both are well-known characters in Australia’s small corporate fishbowl, but are not normally associated. If anything, they are great rivals on the Gold Coast where Weiss oversees Dreamworld and Gray’s BGH has Movie World, Sea World and Wet’n’Wild. But somehow they now have a combined 10.8 per cent Webjet stake and a legal agreement to “co-operate and work together” for six months.This isn’t a break-up play; Webjet’s online travel agent business is 95 per cent of the value. It’s not like logistics firm Asciano a decade ago, when two suitors came together and carved up the empire. If there is to be a winner, this piece of meat’s likely big enough for only one.Looking aroundMeanwhile, with its share register blown open by all three suitors’ buying and realising what’s coming, Webjet’s board has its advisers UBS and MinterEllison (who else) canvassing what’s left of the institutional shareholders, and seeing what other buyer interest may be out there.The rumour around Webjet was always that one of the big global players – like Booking.com or Expedia – would mop it up for its surprisingly strong Australia/NZ market share. However, that rumour is incredibly long in the tooth and you’d think if it had any legs, Webjet would’ve been sold not spun off by its former owner.The one thing that’s already clear is that there is little appetite from Webjet and its shareholders to join up with Helloworld.Webjet is, and always has been, online-only. It is not perfect, but knows what it is (online flights, hotels, motorhomes/cars/insurance) and does not have structural issues from bricks and mortar retail/agents.Helloworld is a mishmash of retail franchise networks (Helloworld Travel, Magellan Travel, Altus, Phil Hoffman Travel, etc), retail buying group and broker networks, wholesalers, ticketing services, booking engines and more. Its directors take 255 words to explain their company’s principal activities in the FY24 annual report – that’s five times more than Commonwealth Bank of Australia’s or six times Telstra, for a company less than 1 per cent of the size (by market capitalisation, revenue, profit or assets).Of course, Helloworld could offer scrip – but, like we said, Webjet and what’s left of its institutional shareholders are not interested in Helloworld scrip.Webjet is worth 50 per cent more than Helloworld and its shares trade at a 50 per cent premium (on a forward price-to-earnings basis). Helloworld would have a snowflake’s chance in hell of structuring an earnings accretive cash deal, let alone funding it. Burnes and his related entities own almost 25 per cent of Helloworld.Which makes you wonder what Burnes’ angle is: a punt on Webjet’s share price or something more strategic? He got involved in a similar situation 17 years ago, buying big in Travel.com.au, another ASX-listed small cap that was subject to a bidding war between Webjet (ironically) and Wotif.com.In that deal, it was reported he wanted to use his blocking stake to force a bidder into some joint venture with his own websites.Webjet makes most of its money selling Qantas and Virgin flights to Australian and New Zealand customers. Jenny EvansGray, on the other hand, has the war chest – BGH is sitting on Australia’s biggest buyout fund. He scored a win in tourism when agreeing to sell a stake in TripADeal to Qantas in 2022 and, like we said, went hard after theme parks owner Village Roadshow to take it off the ASX in December 2020. Village remains a work in progress.We cannot imagine BGH put its best foot forward when it indicatively offered 80¢ a share, although at least that move did stop the share price soaring. How much more is it worth?Gray also now has Weiss to think about. Weiss is better known for investing in hard assets – land, for example – rather than online businesses and/or software. His Ariadne had almost $200 million in assets as of December 31, including $30.7 million in cash/cash equivalents.It is difficult to spot the common ground between BGH and Ariadne.Meanwhile, Barry, six months into her first listed chief executive gig and trying to attract a loyal investor following for a new entity on the ASX, has to somehow keep everyone internally focused on all that reinvigorating and reinventing – the stuff required to fight AI, which is one reason why Webjet was separated from its big brother Web Travel in the first place.It is a big job.Now she’s also mixing with A-grade deal makers – big egos, big money and even big hair.Unpack the most important stories in business, finance, and markets with Australia’s two most influential columnists. Sign up to the Chanticleer newsletter.Anthony Macdonald is a Chanticleer columnist. He is a former Street Talk co-editor and has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. 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