Bruce Whitfield
Tourvest, South Africa’s biggest travel and tourism company, is talking to a number of potential partners and, according to rumours in that industry, it could either be taken over or broken up into smaller pieces in the not too distant future.
A sharp downturn in the number of foreign visitors to Southern Africa means that local operators are becoming increasingly innovative in order to survive in the highly competitive field. Attacks on tourists in the Caprivi strip last year and the land-grab crisis in Zimbabwe also affected visitor numbers to South Africa, raising the stakes and making cooperation crucial.
There are rumours that Tourvest, which has R120-million in the bank and no contingent liabilities, may be speaking to Bidvest (which owns Rennies) and Imperial Holdings.
Tourvest issued a cautionary on March 12, informing shareholders it was in negotiations, but neither Bidvest nor Imperial is currently trading under cautionary.
CEO Steve Griessel says they are “chatting” to a number of people. “I think we’ve got to be proactive.
“To just simply sit back and wait is not a clever thing, because you put huge fear and doubt into your management teams and you may find people jumping ship prematurely.”
Tourvest is a loose association of companies like Seekers Travel, Welcome Tours and Safaris and Starlight Cruises, with the management at the various businesses able to independently pursue strategies they see as being best for their company.
Tourvest management hold about 30% of the shares. The balance is held by a mixture of institutional and private investors. Gensec has the biggest holding, between 12% and 15%.
Griessel agrees their 30% stake in the company makes them vulnerable to a hostile takeover, but argues it would be foolish to exclude management from any potential deal. “I think it wouldn’t make sense for someone to take a hostile stab at this business because if you lost management you would be in a difficult situation.”