Wednesday, October 25, 2006

Flight Centre Mangement Buyout

Intelligent Investor has been recommending Flight Centre Ltd for some time and it looks to finally come to fruition.

Australian travel agency chain, Flight Centre, is considering a $A1.3
billion management buy-out. The privatisation has been proposed by the five founding shareholders, who control 57 per cent of the company, and is
backed by private equity firm, Pacific Equity Partners. Sales and profit
margins have suffered from changes in the industry, with a fall in profits
in 2005 but this is likely to reverse in the years ahead. Management can see that the company is grossy undervalued by the market.

This could be speculation to raise the price of the company but based on management I would say the deal is genuine as the asset does look underpriced based on future earnings potential.

Flight Centre (FLT) is Australias largest listed travel agent with operations throughout Australia and international operations in New Zealand, South Africa, Hong Kong, Canada, the United States and the United Kingdom. The company has over 1,000 retail outlets in the global network and over 200 businesses.

Good Luck Investing

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