TQ3 Buys 9 Percent Stake In Navigant

German-owned multinational travel management company TQ3 Travel Solutions has taken its first steps toward a possible purchase of U.S. partner Navigant International. TQ3 declared today that it has bought a 9.03 percent stake in the Denver-based company.

A filing with the U.S. Securities and Exchange Commission shows this equates to 1,399,000 shares bought for $19 million in dozens of tranches since Feb. 10. The purchases were made on the open market and were funded by TQ3's parent company, the German travel giant TUI. The filing-which was automatically triggered by TQ3 taking its stake above 5 percent-also reveals that TQ3 currently intends to buy up to 14.9 percent of Navigant in total. However, this is merely the maximum stake that it can acquire without making a fresh filing. Ultimately, TQ3 could elect to buy less or-as is widely believed-much more of Navigant. If its equity rises above 20 percent, TQ3 will be obliged by SEC rules to make a public offer for all the shares.

"We have been working closely together with Navigant for more than a year," said TQ3 president and chief executive officer Marc Hildebrand. "We have said we wish to develop the relationship, so this will not come as a surprise. We have always said we want to have ownership in our major markets."

TQ3 came to the conclusion that ownership is a more reliable strategy than partnership after seeing its previous U.S. partner, Maritz, go under the hammer to Carlson Wagonlit Travel. Carlson Wagonlit also bought TQ3's French partner, Protravel, while relations with its original U.K. partner, Britannic Travel, went sour as well.

However, TQ3 was prohibited from making acquisitions in the US because a foreign bank, WestLB , owned 31.3 percent of TUI. This hurdle was removed when WestLB sold its stake in December 2004.