From AFR ....possible rumour?Goldman Sachs the wind beneath...

From AFR ....possible rumour?

Goldman Sachs the wind beneath Webjet’s deal wings

Sarah Thompson, Anthony Macdonald andTim Boyd Dec 10, 2019 — 9.34pm

It’s been a topsy-turvy 18 months for online travel business Webjet – and bankers are out to make sure the wild ride isn’t over yet. Fresh off the back of a 30 per cent share price drop, private equity firms and offshore strategic types have been asked to take another look at what’s Australia’s second biggest listed travel group.

Street Talk understands Goldman Sachs’ strong M&A team in Melbourne has been leading the charge, putting a comprehensive pitch to players it reckons may have access to $2 billion or so and an appetite to take on what was until recently a small cap market darling.What’s less clear is whether Goldman’s sounding is on behalf of the company – or if it is just investment bankers being bankers and trying to drum up business.

While no one involved wanted to comment, it sounds to us like the Wall Street giant may well have Webjet’s blessing.Should that be the case, it would represent a change of heart at Webjet which has stuck close to Swiss duo UBS and Credit Suisse in recent years. Perhaps they were hooked by some of Goldman’s other successes in selling online transaction-type businesses in recent years, including Menulog, Trade Me and Wotif.com. Each was sold for a song.

Whatever the case, it’s one thing to be pitched to private equity and offshore trade types, and another to garner serious interest. Private equity targets are a dime a dozen with just the Australia-focused funds estimated to have $11 billion dry powder looking for a home. Add leverage – and the much bigger buyout industry globally – and there’s plenty of tyrekicking going on.As for Webjet, the way the listed market sees it, it has quickly gone from small cap market darling to have some questions hanging over its head.

The company put out a positive trading update at its annual general meeting last month – albeit against a more difficult macro environment – telling investors organic EBITDA growth would be as much as 23 per cent. That’s a big number compared to plenty of other top 200 Australian companies and the question is whether a tyrekicker can find value with the shares trading at 10-times forward EBITDA and 16-times next 12-month profit.A spokeswoman from Goldman Sachs declined to comment. Webjet did not respond to a request for comment prior to publication.