Hogg Robinson Buys Sea Gate Despite WorldTravel BTI Relationship

Hogg Robinson, the U.K. company that owns most of the Business Travel International travel management network outside the United States, has bought New York-based corporate travel company Sea Gate Travel Group. Hogg said the acquisition is helping it to expand into Sea Gate's niche interests in sports event and meetings management, through its interest in Advanced Meeting Partners. It also will serve as a U.S. vehicle for Hogg's newly acquired interest in expense management system provider Spendvision.

However, Sea Gate's core business is straightforward corporate travel management, often directly in competition with WorldTravel BTI, which will continue as the BTI partner in the United States. WorldTravel BTI is owned by the privately held Dutch company BCD Holdings.

Asked whether Hogg-owned BTI partners in the United Kingdom, Germany, Canada and elsewhere will work with Sea Gate or WorldTravel BTI on bids involving the United States, Hogg chief executive David Radcliffe said: "It depends on what the client wants. If the client already has a relationship with BTI, then we will bid as BTI. Sea Gate will major in parts of the market where we don't operate as BTI."

Radcliffe would not comment on the strategic significance of the Sea Gate deal for a long-heralded potential merger of the two halves of BTI. Nevertheless, seasoned observers said they view this in the context of the unresolved behind-the-scenes battle for control of the organization. The shareholding of BTI is evenly split between BCD and Hogg, but territorial ownership is a different story. BCD owns the partner in the United States, the world's largest market, but has only sparse ownership elsewhere. Hogg controls the BTI partners in 20 countries, almost all of them outright.

Both parties agree that ownership of the network should be merged, but not on who should take control. BCD is backed by the deep pockets of Dutch billionaire John Fentener van Vlissingen. Hogg, on the other hand, is looking to return to the stock market as an end-to-end travel company with a wholly owned BTI as its primary asset. It was the repositioning for an initial public offering, which led to the investment in Spendvision in February and last week's sale of Hogg's remaining non-travel assets.

In this context, Sea Gate can be seen as an alternative option in the United States for Hogg if it cannot wrest control of WorldTravel BTI. If BTI can be merged, then Sea Gate could be folded in with it.

Radcliffe refused to comment on any speculation other than to say: "I have some sympathy with the argument that if we can't find a way ahead with WorldTravel, then this is a good insurance policy. That's not the reason we bought Sea Gate but I understand it."

Sea Gate traces its origins back to 1928, but the current Sea Gate Travel Group was formed in 1999 following the merger of MacPherson Travel and Sea Gate Travel. It expanded again in 2002 with the amalgamation of Advanced Travel Management. The company has strong coverage in banking, media, sports and entertainment.

According to a statement released by Hogg Robinson, the existing Sea Gate management team, led by chief executive officer Dan Green, will transfer with the business. Hogg overseas investment director Roger Westwood will assume the position of chairman and, "the appointment of an industry-leading figure as the new COO will be announced shortly."