RichardMEL
Feb 10, 02, 7:28 am
yeah, riiight....
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Fox-Lew seek to take over Virgin
By LEONIE WOOD
Monday 11 February 2002
Ansett's new owner, the Tesna consortium, is believed to be considering a full takeover of rival budget carrier Virgin Blue.
Virgin Group founder Sir Richard Branson could retain a minority stake in the merged group.
Tesna founders Lindsay Fox and Solomon Lew, and their investment partners David Bonderman and Bill Franke, held preliminary talks with Sir Richard and senior Virgin executives in London over the weekend, although the nature of the talks was unclear.
There was considerable dispute between the parties yesterday over who initiated the talks. Virgin Group's Australian subsidiary, Virgin Blue, insisted Tesna requested the meeting. Tesna said in a statement that Virgin Blue's advisers at investment bank Goldman Sachs had approached Tesna late last year and talks had continued since.
Virgin commissioned Goldman Sachs last year to raise up to $200 million. Goldman Sachs has drafted plans for a proposed Virgin Blue float this year.
Sources said the high-powered meeting was organised about 10 days ago and coincided with a trip by Mr Fox and Mr Lew to Airbus Industrie's headquarters at Toulouse in France, where they finalised a new schedule for delivery of Airbus passenger jets.
The talks with Virgin Group are said to be separate from Tesna's deal to buy Ansett - a deal Ansett's administrators insisted must be finalised by February 28.
Virgin Blue and Tesna representatives are expected to continue the negotiations in Australia this week.
Mr Fox and Mr Lew said in a statement yesterday that Tesna "remains committed to the completion of the sale agreement with the Ansett administrators regardless of the outcome of the discussions (with Virgin Group)".
"Ansett's business plan has been formulated on the basis of participation in a three-airline market," they said. "We have assumed a highly competitive initial environment, and we are fully prepared to compete aggressively for market share."
Several sources speculated that Tesna could plan to keep Ansett as a full-service airline pitched to the top end of the aviation market and retain Virgin as a low-price, low-cost airline replete with its distinctive red livery and budget branding.
Any Tesna move on Virgin Blue, either a full takeover or a partial merger, would need the approval of the Australian Competition and Consumer Commission, which would determine if competition were diminished.
Tesna is likely to argue that consumer choice would be unaffected by retaining Ansett and Virgin as separate brands.
Virgin Blue head of commercial activities in Australia, David Huttner, said talks with Tesna were continuing and covered several issues. He noted that Virgin Blue had been talking to potential investors, but would only consider one that offered Virgin strategic advantage.
In an interview recorded before the Tesna talks, Virgin Blue managing director Brett Godfrey told Nine Network's Business Sunday program that the company was "not looking at a majority sell-down at all now" and instead wanted a minority investor who might bring industry expertise and credibility.
He also said Virgin was in talks with two unnamed, "airline-related parties" who might buy into Virgin Blue.
The talks, however, had been complicated by the potential entry of Ansett under Tesna, a move that will affect Virgin Blue's perceived value.
Mr Huttner said last night that Virgin Blue stood by Mr Godfrey's comments, and that the interested investors were considering only a minority stake.
It is believed the talks between Virgin Group and Tesna were facilitated by Mr Bonderman, who has known Sir Richard for several years. Mr Bonderman, chairman of Dublin-based discount airline Ryanair, and fellow investor Bill Franke, have agreed to buy 35 to 49 per cent of Tesna.
Qantas spokesman Michael Sharp said the airline had not shelved or postponed its airfare deals or promotions while Tesna settled its Ansett bid.
"We just can't speculate what may or may not happen (about Ansett and Virgin) and for us it will be business as usual," he said.
[This message has been edited by RichardMEL (edited 02-10-2002).]
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Fox-Lew seek to take over Virgin
By LEONIE WOOD
Monday 11 February 2002
Ansett's new owner, the Tesna consortium, is believed to be considering a full takeover of rival budget carrier Virgin Blue.
Virgin Group founder Sir Richard Branson could retain a minority stake in the merged group.
Tesna founders Lindsay Fox and Solomon Lew, and their investment partners David Bonderman and Bill Franke, held preliminary talks with Sir Richard and senior Virgin executives in London over the weekend, although the nature of the talks was unclear.
There was considerable dispute between the parties yesterday over who initiated the talks. Virgin Group's Australian subsidiary, Virgin Blue, insisted Tesna requested the meeting. Tesna said in a statement that Virgin Blue's advisers at investment bank Goldman Sachs had approached Tesna late last year and talks had continued since.
Virgin commissioned Goldman Sachs last year to raise up to $200 million. Goldman Sachs has drafted plans for a proposed Virgin Blue float this year.
Sources said the high-powered meeting was organised about 10 days ago and coincided with a trip by Mr Fox and Mr Lew to Airbus Industrie's headquarters at Toulouse in France, where they finalised a new schedule for delivery of Airbus passenger jets.
The talks with Virgin Group are said to be separate from Tesna's deal to buy Ansett - a deal Ansett's administrators insisted must be finalised by February 28.
Virgin Blue and Tesna representatives are expected to continue the negotiations in Australia this week.
Mr Fox and Mr Lew said in a statement yesterday that Tesna "remains committed to the completion of the sale agreement with the Ansett administrators regardless of the outcome of the discussions (with Virgin Group)".
"Ansett's business plan has been formulated on the basis of participation in a three-airline market," they said. "We have assumed a highly competitive initial environment, and we are fully prepared to compete aggressively for market share."
Several sources speculated that Tesna could plan to keep Ansett as a full-service airline pitched to the top end of the aviation market and retain Virgin as a low-price, low-cost airline replete with its distinctive red livery and budget branding.
Any Tesna move on Virgin Blue, either a full takeover or a partial merger, would need the approval of the Australian Competition and Consumer Commission, which would determine if competition were diminished.
Tesna is likely to argue that consumer choice would be unaffected by retaining Ansett and Virgin as separate brands.
Virgin Blue head of commercial activities in Australia, David Huttner, said talks with Tesna were continuing and covered several issues. He noted that Virgin Blue had been talking to potential investors, but would only consider one that offered Virgin strategic advantage.
In an interview recorded before the Tesna talks, Virgin Blue managing director Brett Godfrey told Nine Network's Business Sunday program that the company was "not looking at a majority sell-down at all now" and instead wanted a minority investor who might bring industry expertise and credibility.
He also said Virgin was in talks with two unnamed, "airline-related parties" who might buy into Virgin Blue.
The talks, however, had been complicated by the potential entry of Ansett under Tesna, a move that will affect Virgin Blue's perceived value.
Mr Huttner said last night that Virgin Blue stood by Mr Godfrey's comments, and that the interested investors were considering only a minority stake.
It is believed the talks between Virgin Group and Tesna were facilitated by Mr Bonderman, who has known Sir Richard for several years. Mr Bonderman, chairman of Dublin-based discount airline Ryanair, and fellow investor Bill Franke, have agreed to buy 35 to 49 per cent of Tesna.
Qantas spokesman Michael Sharp said the airline had not shelved or postponed its airfare deals or promotions while Tesna settled its Ansett bid.
"We just can't speculate what may or may not happen (about Ansett and Virgin) and for us it will be business as usual," he said.
[This message has been edited by RichardMEL (edited 02-10-2002).]