Magellan consultation
MAGELLAN Travel Group chairman Andrew Jones has acknowledged concerns by a “minority of members” about the network’s shock acquisition by Helloworld ( TD 19 Dec), pledging to provide full details of the deal at a series of national roadshows.
He is aiming to stem a rising tide of dissent, which has seen a number of Magellan agencies raise issues over the Christmas break about a lack of consultation - with some first finding out details of the deal via the Travel
Daily breaking news bulletin released when it was announced by Helloworld Travel Limited.
Jones told TD this morning “we will address those concerns.
“We are committed to providing all members with full details of the transaction, which we have been unable to do to date, in our forthcoming Around Australia Roadshows commencing the week of the 15th of January”.
Jones said the update would include full details of the rationale behind the decision, and a “clear outline of the monetary benefit that directors are offering to members” which he said was a “significant percentage of the transaction”.
He said the HLO deal would also provide a range of opportunities and services for members.
Helloworld has agreed to pay $32.5 million for Magellan, with the transaction documentation finalised late on the Friday before Christmas ( TD yesterday).
An ASX announcement after 7pm that evening confirmed that the deal is “expected to complete in early January 2018,” which could potentially mean it is done and dusted prior to the promised member consultations.
MEANWHILE a group of members representing about a third of Magellan’s 130 offices has signed a letter to the firm’s board, requesting clarification of the deal in the “context of the Magellan Travel Group structure”.
A member has also circulated a questionnaire canvassing other potential options for the group.
In the interests of presenting a balanced view we have summarised some of their concerns on page two.
THE directors of Magellan Travel Group (MTG) have been asked to respond by 5pm today to a letter signed by 27 agents, comprising about 40 of the organisation’s 130-strong office network.
A copy of the missive has been obtained by Travel Daily, with the content questioning how the board can have sold Magellan to Helloworld ( TD 19 Dec) without first convening a meeting of the group’s unitholders.
Magellan is a unit trust, where each member holds part of the organisation alongside the three “Founder Units” which together comprise 15% of the trust.
The agents cite clause 61 of the Magellan Trust Deed, asking for clarification as to why it did not in this case oblige Magellan’s Trustees to call a meeting of members to “determine whether the terms and conditions of the proposed transaction are acceptable to them”.
Signatories include agents such as Travelrite, Trendsetter Travel, Landmark Travel, Where2Travel, Alpha Travel & more, with the letter asking the board to “demonstrate how you have acted in unitholders’ best interests”.
In recent days another agent has also sent fellow MTG members a furious email, along with a survey seeking feedback on alternative options. Several agents have contacted
TD to express surprise at assertions by MTG chairman Andrew Jones that feedback on the deal had been “on the whole very positive” ( TD 22 Dec).
Some have also questioned a claim by HLO md Andrew Burnes that the deal will boost the company’s agent TTV by $900m, with members told at recent meetings that currently only about half that value is subject to preferred agreements.
However it’s understood that on top of the $450m, bringing Magellan into the Helloworld fold is likely to capture more TTV in existing HLO supplier deals.
Magellan chairman & co-founder Andrew Jones has committed to providing full details of the rationale behind the transaction, as well as monetary benefits and additional services for members at a series of upcoming meetings later this month ( see p1).