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SYDNEY - Australian travel firm Flight Centre Ltd. said on Friday third-quarter earnings were ahead of expectations and it was still considering a bid approach from private equity firm Pacific Equity Partners (PEP).
Flight Centre said in a statement pre-tax profit for the nine months to March 31 was up 18 per cent on the previous corresponding period, and tipped a healthy full-year result. Its shares rose 2.1 per cent to A$16.68 ($18.86) at 0016 GMT (11.16am NZT).
Flight Centre said the value of its total transactions rose 12 per cent in the period, buoyed by recent acquisitions.
"We now hope to maintain our current profit growth pattern for the remainder of the year," Chairman Bruce Brown said.
PEP last month proposed a new structure to transfer Flight Centre's operational assets into a leveraged joint venture with an enterprise value of A$1.4 billion ($1.6 billion).
Flight Centre would retain a 67 per cent interest in the joint venture and PEP would hold the remaining 33 per cent.
The approach reflects a recent trend for joint venture deals with private equity as they allow buyout firms to share the risk and retain expertise in a particular sector.
In February, a planned A$1.62 billion management buyout of Flight Centre backed by PEP was scuttled when shareholders rejected the offer.
Flight Centre said on Friday it was considering the new approach and no terms had been agreed. A Flight Centre spokesman said this week there were some concerns to work through.
The Australian Financial Review newspaper said in an unsourced report on Friday that PEP was considering paying A$16 or more per share for Flight Centre under the new deal, up from about A$15 previously.
- REUTERS
