Photographer: Andrew Harrer/Bloomberg

Visa, GBT Swoop on Wine Merchant Turned Travel Firm

Corrected
  • GBT agrees to buy Hogg Robinson for up to 120 pence/share
  • Deal price dependent on Visa buying payment management unit

A British travel firm originally established as a wine merchant in 1845 surged 50 percent after hopping on an M&A merry-go-round involving American Express Global Business Travel and Visa Inc.

GBT said on Friday it will buy Hogg Robinson Group Plc, whose clients include Rolls-Royce Holdings Plc and HSBC Holdings Plc, for as much as 120 pence per share, representing a 54 percent premium for a stock that closed at 78 pence on Thursday. The shares were trading at 116 pence at 2:08 p.m. in London.

That offer price is dependent on Hogg Robinson selling its expense and payment management unit Fraedom to Visa, according to a separate statement, and will drop to 110 pence if that deal does not go through in time.

GBT is 50 percent owned by American Express Co. and the remaining held by a group of investors including Certares.

Visa, Fraedom’s largest client, has agreed to pay 141.75 million pounds ($196 million) for the unit. In March 2012, Hogg Robinson paid just 13.4 million pounds to buy the remaining 42 percent of Fraedom, then known as Spendvision, that it didn’t already own.

Activist Cheers

Activist investor Teleios Capital welcomed the news, saying it represents a good outcome for all shareholders. “We are pleased to see that the company has received the recognition it deserves,” co-founder Adam Epstein said in an emailed statement.

Zurich-based Teleios, which previously invested in beverage systems firm SodaStream International Ltd. and U.K. car dealer Pendragon Plc, said it holds a position of more than 14 percent in Hogg Robinson. The stock has risen nearly 85 percent since the investor first disclosed a stake in April 2016, according to Bloomberg data.

The purchase of Fraedom, whose technology underlies Visa’s IntelliLink Spend Management platform, comes as businesses continue to replace inefficient paper-based payment systems with digital tools, the San Francisco-based company said in a statement. 

Hampshire, England-based Hogg Robinson has about 4,500 staff across 120 countries, according to company statements.

(Corrects name of acquirer to American Express Global Business Travel not American Express Co.)
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