Rotorua Energy Charitable Trust has increased its 10 per cent stake in Abano in an apparent move to block the company's takeover by Masthead, the Stewart family's investment vehicle. Masthead owns 19.9 per cent of Abano and is seeking to increase that stake to 51 per cent overa 30-day offer period at 385c a share. Abano shares trade well beyond that level, indicating the reluctance of many investors to let go at that price. Abano peaked at an all-time trading high of 448c and currently trades lower. Abano had a weak track record, followed by a solid turnaround after it sold the troubled Eldercare business a few years ago. It began to focus on particular areas of healthcare, like dentistry, with increasing success. Shareholders are likely to hold out for a premium price on takeover.
Flight Centre has surprised with profit growth that belies the deeply troubled outlook of a year ago. Boosted by ever-increasing numbers of travellers, Flight Centre now reckons growth in the total value of transactions or bookings at the agency will approach 15 per cent, translating into a 30 per cent increase in first-half pre-tax profits. The improved results vindicate the shareholders revolt against planned takeovers by private equity player Pacific Equity Partners and the company's management. Flight Centre has been badly mauled in recent years by the emergence of discount airlines which resulted in lower airfares and reduced commissions to travel agents. Flight Centre is Australia's largest travel agent, with more than 835 stores and a further 644 overseas. In a strong economy, it also emerges that travellers do not mind paying a booking fee for a better service.
