Gullivers travels towards big float

By GARETH VAUGHAN


Gullivers Travel Group, New Zealand's biggest outbound travel agent, is mulling a $100 million-plus share float on the stock exchange.

Gullivers said yesterday that plans for a share offer were advanced and it had appointed investment bank UBS as lead manager.

Any offer was likely in November, the company said, with more than half the shares being sold. However, a trade sale is also a possibility as founder and owner Andrew Bagnall looks to sell.

Gullivers' announcement comes three months after the Business Herald reported the company was on the block with a price tag of up to $140 million. A share offer would be targeted at institutional investors and major broker's retail clients, Gullivers said.

Established in 1976, the Gullivers group includes the Holiday Shoppe and United Travel franchises, corporate travel management companies Atlantic Pacific Radius and Signature Travel, plus ticketing businesses Gullivers Holidays and Gullivers Ticketing.

Gullivers also owns 38 per cent of corporate travel group Synergy. However, no mention of Synergy was made in yesterday's announcement, fuelling speculation a sale would exclude the Synergy stake. Bagnall was unavailable for comment.

Simon Botherway, principal of Brook Asset Management, and Warren Couillault of Fisher Funds Management said they would take a look at the details of any Gullivers share offer, including the size of the offering and price before deciding whether to invest.

Botherway said he would also want to get to grips with the company's long-term strategy before deciding whether to invest in it.

Airlines have stopped paying commissions on some ticket sales as they try to get customers to buy direct over the internet, threatening travel agents' margins.

With operating earnings of $20 million and revenue of $70 million, Gullivers is seen as being worth between $100 million and $140 million.

However, one source close to the deal suggested the business was worth between $140 million and $215 million.

The Gullivers board, aside from Bagnall, includes high flyers such as Business Roundtable chairman Rob McLeod, EDS chief executive Rick Ellis, SkyCity Entertainment chairman Rod McGeoch and former Bancorp managing director Paul Norling. Former Reserve Bank and ANZ director Jeff Todd is chairman.

A Gullivers IPO would follow that of inbound tourism operator Southern Travel Holdings, whose September 30 listing of $5.85 million on NZAX was oversubscribed.

Southern Travel shares closed yesterday at $1.34, 4c above their IPO price.