Webjet Group Ltd (ASX: WJL) shares have fallen sharply after the company announced that a potential takeover bid from fellow travel company Helloworld Travel Ltd (ASX: HLO) had fallen over.
Webjet shares jumped significantly when the potential takeover was first announced in mid-November, increasing from 76 cents to 88 cents in one session.
At the time Helloworld said that it had submitted a non-binding, indicative proposal to the board of Webjet, to acquire the company for 90 cents per share.
The company went on to say:
Helloworld believes the proposal represents a compelling offer for all Webjet’s shareholders, with the opportunity to realise a premium valuation and 100% cash consideration. Further we believe that Helloworld and Webjet are logical partners and that a combination provides a strong platform for both companies to achieve their long-term strategic objectives.
The proposal was conditional on the satisfactory completion of due diligence by Helloworld, required regulatory approvals, and a unanimous recommendation in favour by the Webjet board.
A competing takeover offer from BGH Capital at 91 cents per share was also pitched in November.
Talks called off
Webjet said on Friday morning in a statement to the ASX that neither party had put forward a proposal which they could take to shareholders.
The company said:
Over the last 12 weeks, Webjet has engaged constructively with Helloworld and BGH, providing both parties with due diligence access. The Webjet Board has not however received a proposal from either party that is consistent with the respective indicative proposals or capable of being put to shareholders. The Webjet Board does not believe there is sufficient certainty that a binding proposal that is capable of being recommended by the Webjet Board will be received from either party within an acceptable timeframe. As a result, the Webjet Board has determined that management’s time, focus and resources should return wholly to executing the Company’s existing strategy. Accordingly, discussions with both Helloworld and BGH have now ceased.
The company said its board remained open to engaging with parties on any change of ownership proposal in the future about a “proposal that represents compelling value for shareholders and offers sufficient certainty of execution within an acceptable timeframe”.
The company also updated the market as to trading conditions, saying it had been a challenging period, and underlying EBITDAÂ for FY26 was expected to be in the range of $28-$29 million, excluding Webjet Business Travel, “which is delivering in line with plan and as foreshadowed is expected to reduce underlying EBITDA by circa $600-900 thousand in 2H26”.
Webjet also said it would restart its $25 million share buyback, which was put on hold while the takeover talks were on foot.
Webjet shares were changing hands for 60 cents on Friday morning, down 22.6%.
The post Webjet Group shares plunge as Helloworld takeover plans fall through appeared first on The Motley Fool Australia.
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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.