The takeover of Global Travel Group by Australia’s Stella Group has raised questions about the future independence of Worldchoice members in the planned combination with Global in Triton Travel Ltd.
Stella announced its purchase of Global for an undisclosed sum on Tuesday, adding the 650 Global Travel Group and Independent Options agencies to Stella’s 80 Harvey World Travel outlets in the UK.
The move came as the delayed tie-up between Global and Worldchoice, now expected in January, was complicated by a counter offer to Worldchoice shareholders from the Travel Trust Association.
The TTA offer seeks merely an expression of interest from Worldchoice shareholders. But the rapid moves to consolidate among independent retailers threaten a substantial change in the way many operate.
Stella describes itself as a vertically integrated business, meaning it controls the supply and retail of travel in a way similar to TUI and Thomas Cook. Its takeover of Global would fit this model, it said.
Worldchoice members welcomed news of Global’s acquisition, but disagreed on the implications. Essex and East Anglia regional chairman John Garbutt of Thorpe Travel dismissed the suggestion that members could lose their independence with Global. “We don’t look at it that way,” he said. “As Worldchoice members we will not be tied to sales [of specific suppliers].”
However, former Worldchoice board member Chris Bailey, of Bailey’s Travel, said: “Some vertical integration is inevitable. We have to adapt.”
There is also disagreement on whether Worldchoice would merge with Stella-owned Global or be taken over by it.
The announcement of Stella’s acquisition to the Australian stock exchange described Global as including 450 Worldchoice agents “that Global has reached agreement to acquire”.
Bailey said: “It was never a merger, but we can live with that.” However, Garbutt insisted it was a merger and guaranteed independence would be an important part of the deal with Global/Stella.
The UK’s largest agency consortium, Advantage, pulled out of talks to join TritonTravel Ltd earlier this year partly out of concern to maintain the independence of its 700 members.
For Global founder George Begg the sale to Stella is third time lucky. In 1999 Global was close to a £50 million tie-up with Airtours, while in 2005 an £85 million sale to venture capitalists fell at the last hurdle.
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