<B>Hogg MBO Bolsters BTI</B>
By Amon Cohen
Hogg Robinson, one of the two dominant forces in Business Travel International, is promising a fresh round of acquisitions after de-listing from the London Stock Exchange.
Chief executive David Radcliffe has led a 24-strong team in a $350 million management buyout of the company that has been funded by investment fund Schroder Ventures. "We have access to large funds and Schroder is very keen that we grow," said Radcliffe following completion of the buyout. He particularly is studying opportunities in the Far East, perhaps the weakest region of the BTI network, but also is considering opportunities in countries where it already has ownership.
Hogg owns the BTI partners in the United Kingdom, Canada, the Nordic countries and several other territories, and is managing partner for the entire BTI network. It also owns 46 percent of BTI Global. Another 46 percent is held by BCD Holdings, the parent company of WorldTravel Partners and the remaining 8 percent by Swiss travel company Kuoni. It is believed that Kuoni, unlike WTP, has a financial interest in the buyout. Both of the major players in BTI claim they are comfortable with the current arrangement and do not foresee further consolidation.
John Van Vlissingen, the wealthy Dutch financial backer of WTP, is understood to have been unhappy with Hogg's status as a listed company because it was vulnerable to takeover on account of its sluggish share performance. An aggressive activist fund, called Active Value, proposed a bid for Hogg last October, threatening to destabilize the entire BTI network.
"What clients will sense is that Hogg Robinson will no longer be looking over its shoulder and nor will BTI, not having to worry whether there will be a bid for it next week," said Radcliffe. Apart from more acquisitions, Radcliffe has promised a policy of business as usual, although there will be heavier emphasis on technology with the setting up of Hogg's e-commerce division and the promotion in Europe of travel IT company TRX, in which Hogg has a stake. There also will be more emphasis on developing the company as a fee-based consultancy.
Asked whether Hogg will seek partners from outside travel in this arena, Radcliffe replied: "Watch this space." Hogg has decided to go private again after several years of seeing its share price in the doldrums. "We were a mid-cap company and were suffering from a swing in interest toward mega-mergers and technology companies," Radcliffe said. "Our underlying performance was good but the share price did not grow, which was stifling our acquisition plans and long-term options.