Helloworld Limited’s shareholders have until next month to decide whether they’ll vote in favour of the company’s proposed merger with AOT.
The date was set today in an ASX update, with a meeting to vote on the proposal scheduled for 10.00am (AEST) on 22 January 2016.
The proposed merger will see the privately owned travel services provider, AOT, blend into the Helloworld group, creating a more competitive travel company.
“The Merger Proposal provides an opportunity to integrate two complementary travel businesses to create a leading integrated travel group in the Australian market offering a broad range of travel products and services.”
Rob Marcolina, Helloworld Acting Chairman
“The integration of the two businesses is expected to increase the scale and earnings of the enlarged Helloworld Group, allowing it to better compete with larger participants in the retail, wholesale and corporate travel industry and with global online competitors.”
Helloworld stocks drastically increased on the day of the announcement to some 10.61 percent, providing mass interest from shareholders and the public.
However, an Independent Expert’s Report (which is required for every major merger) from Grant Thornton concluded that the merger is ‘not fair but reasonable’ to the Non-Associated Shareholders.
He explained that the benefits of the proposal outweigh the bad, which could include a reduction in the value per Helloworld share.
“In the absence of a superior alternative proposal emerging, we are of the opinion that the advantages of the Proposed Transaction outweigh the disadvantages and accordingly, we believe that it is in the best interest of the Non-Associated Shareholders to vote in favour of the Proposed Transaction.”
According to Thornton’s assessment, the fair market value per Helloworld Limited Share after the proposed transaction fell to 0.34 low and 0.43 high – down from 0.40 low before the proposed transaction and 0.50 high.
Meanwhile, advantages of the arrangement include increasing the group’s positioning for future growth, cost saving and increasing the company’s scale.
