Australian low-cost carrier Virgin Blue looks set to change hands again following approval for Toll Holdings’ takeover of the airline’s majority owner, transport group Patrick. Virgin Blue’s improved financial position and performance in recent months may mean, however, that an earlier deal that would have seen Toll selling Patrick’s majority stake, with 15% going to the Virgin Group, does not proceed.
Logistics group Toll started targeting Patrick last August. At that time it was only interested in retaining a small part of Patrick’s 62.4% stake in Virgin Blue to have its airfreight activities within the Toll transport group. Under a deal between Toll and Virgin Group, 15% of Patrick’s share was to be offered to the public, 20% to Patrick shareholders and 15% to Virgin Group, giving the latter majority control. Toll’s original bid for Patrick was rejected by Patrick. A revised A$5.81 billion ($3.7 billion) bid was accepted by the Patrick board in mid-April.
But Toll managing director Paul Little says it could take a year for Toll to decide what to do with Virgin Blue and that there is no urgency to make any changes. The change of view follows the improved situation at Virgin Blue following a number of new initiatives, including the launch of a frequent-flyer programme.