SYDNEY: Flight Centre Travel Group (ASX: FLT) said on Wednesday it has agreed to sell its 47% stake in cycling joint venture Pedal Group to the Turner Collective, a consortium linked to the company’s managing director Graham Turner and his family, for A$61.7 million ($39.4 million).
The deal, which requires shareholder approval at an extraordinary general meeting on May 14, marks the latest step in Flight Centre’s push to simplify its portfolio and redirect capital toward its core travel operations.
Pedal Group owns the 99 Bikes retail chain and wholesaler Advance Traders Australia. The transaction values Flight Centre’s interest at A$61.7 million and is expected to complete next month, subject to regulatory clearance from the Australian Competition and Consumer Commission (ACCC).
Flight Centre’s independent directors have unanimously backed the sale, and an independent expert’s report from BDO concluded the terms are fair and reasonable. Shareholders linked to Graham Turner will be excluded from voting.
The company expects to book a one-off accounting gain of roughly A$15 million upon completion, with no cash tax payable due to existing revenue and capital losses.
“Pedal is a strong business with a loyal and engaged customer base, and we are proud of what has been built through the joint venture,” said Flight Centre non-executive chairman Gary Smith. “This divestment follows the sale of our Cross Hotels and Resorts business and reflects FLT’s disciplined approach to capital allocation and portfolio simplification.”
The proposal was brought to Flight Centre by Matt Turner, founder of 99 Bikes and chairman of Pedal Group, six months after the two sides began reviewing ownership options for the business.
If approved, the sale will crystallise a return for Flight Centre and allow it to focus on growth areas including cruise travel and meetings and events. ($1 = A$1.5660)