Branson wants his baby back
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Branson wants his baby back
Fri "The Australian"
Branson wants his baby back
Blair Speedy and Steve Creedy
December 09, 2005
VIRGIN Group boss Richard Branson says he will put together a consortium of investors to buy Virgin Blue back from Patrick Corp if Toll Holdings fails in its hostile bid for Patrick.
"It's my baby and it's been taken away. We want it back and we'll do everything we can to get it back," he said.
In Sydney to celebrate Virgin Blue's fifth anniversary this weekend, Sir Richard said he was confident Toll would succeed in its hostile bid for stevedore Patrick, which had a 62.4 per cent controlling stake in the airline after completing a takeover bid earlier this year.
Sir Richard is backing Toll's bid, under which Virgin Group could increase its stake in Virgin Blue from 25 per cent to 40 per cent by underwriting the sale of a 15 per cent stake in the discount airline.
Following a breakfast meeting with Toll chief Paul Little he said he was "absolutely sure" Toll would succeed in taking over Patrick, despite regulatory concerns over the effect of the merger on competition in the rail market.
"He knows most of what the ACCC are asking for and he feels he can deliver."
Last month, the Australian Competition and Consumer Commission (ACCC) released a preliminary view that the proposed takeover would lead to a substantial lessening of competition, but the regulator has not yet decided to oppose the merger and is carrying out further investigations.
Under the $4.6 billion hostile bid, Toll proposes to dilute Patrick's controlling stake in Virgin Blue to around 10 per cent and sell the shares to Sir Richard's Virgin Group.
"If for any reason they're not successful, I might have to put my hand deep in my pocket and get a few other people to put their hands deep in their pockets to have a look at it," he said.
"We would stay on as a minority shareholder, but we might want to find other ways of taking Patrick out."
Sir Richard also vowed to push ahead with a full-service international offshoot of Virgin Blue once the airline's ownership issues were resolved. Likely routes would include Los Angeles, Japan and possibly Hong Kong.
Sir Richard said the airline could start operations as early as next year with five widebody jets. "I would hope that if we can get the planes it will be later next year," he said.
However, he conceded it might not be able to carry the Virgin name because of the veto Virgin Atlantic equity partner Singapore Airlines had over the brand's use on other international carriers.
A decision by the Australian Government to give the Singaporeans access to trans-Pacific routes would also put a "massive question mark" over the plan.
Asked about the effect on Virgin's plans of Qantas moves to start up Jetstar International, Sir Richard expressed doubts about the Qantas offshoot's viability and predicted it would lose to a full-service Virgin product in head-to-head competition.
"I think that historically setting up a long-haul, low-cost carrier does not work," he said. "Every one of them has gone bankrupt - People's Express, Freddy Laker, you name it."
Also, Virgin Atlantic yesterday said it hoped to boost premium-class passenger loads to Australia by offering more seats to London next year after moving unexpectedly into the black on its year-old Sydney-Hong Kong route.
The airline, which says it recorded a small profit in its latest six months, fills only about 55 per cent of its business and premium economy seats on its Sydney-Hong Kong routes.
Sir Richard agreed this was partly due to a bottleneck in Hong Kong, where high load factors on flights to London made it hard for Australians to get a through fare.
"The second Hong Kong-London service, which will be at a similar time, will certainly make a big difference and I think will be the icing on the cake as far as Sydney's concerned," Sir Richard said.
=========================================
Branson wants his baby back
Blair Speedy and Steve Creedy
December 09, 2005
VIRGIN Group boss Richard Branson says he will put together a consortium of investors to buy Virgin Blue back from Patrick Corp if Toll Holdings fails in its hostile bid for Patrick.
"It's my baby and it's been taken away. We want it back and we'll do everything we can to get it back," he said.
In Sydney to celebrate Virgin Blue's fifth anniversary this weekend, Sir Richard said he was confident Toll would succeed in its hostile bid for stevedore Patrick, which had a 62.4 per cent controlling stake in the airline after completing a takeover bid earlier this year.
Sir Richard is backing Toll's bid, under which Virgin Group could increase its stake in Virgin Blue from 25 per cent to 40 per cent by underwriting the sale of a 15 per cent stake in the discount airline.
Following a breakfast meeting with Toll chief Paul Little he said he was "absolutely sure" Toll would succeed in taking over Patrick, despite regulatory concerns over the effect of the merger on competition in the rail market.
"He knows most of what the ACCC are asking for and he feels he can deliver."
Last month, the Australian Competition and Consumer Commission (ACCC) released a preliminary view that the proposed takeover would lead to a substantial lessening of competition, but the regulator has not yet decided to oppose the merger and is carrying out further investigations.
Under the $4.6 billion hostile bid, Toll proposes to dilute Patrick's controlling stake in Virgin Blue to around 10 per cent and sell the shares to Sir Richard's Virgin Group.
"If for any reason they're not successful, I might have to put my hand deep in my pocket and get a few other people to put their hands deep in their pockets to have a look at it," he said.
"We would stay on as a minority shareholder, but we might want to find other ways of taking Patrick out."
Sir Richard also vowed to push ahead with a full-service international offshoot of Virgin Blue once the airline's ownership issues were resolved. Likely routes would include Los Angeles, Japan and possibly Hong Kong.
Sir Richard said the airline could start operations as early as next year with five widebody jets. "I would hope that if we can get the planes it will be later next year," he said.
However, he conceded it might not be able to carry the Virgin name because of the veto Virgin Atlantic equity partner Singapore Airlines had over the brand's use on other international carriers.
A decision by the Australian Government to give the Singaporeans access to trans-Pacific routes would also put a "massive question mark" over the plan.
Asked about the effect on Virgin's plans of Qantas moves to start up Jetstar International, Sir Richard expressed doubts about the Qantas offshoot's viability and predicted it would lose to a full-service Virgin product in head-to-head competition.
"I think that historically setting up a long-haul, low-cost carrier does not work," he said. "Every one of them has gone bankrupt - People's Express, Freddy Laker, you name it."
Also, Virgin Atlantic yesterday said it hoped to boost premium-class passenger loads to Australia by offering more seats to London next year after moving unexpectedly into the black on its year-old Sydney-Hong Kong route.
The airline, which says it recorded a small profit in its latest six months, fills only about 55 per cent of its business and premium economy seats on its Sydney-Hong Kong routes.
Sir Richard agreed this was partly due to a bottleneck in Hong Kong, where high load factors on flights to London made it hard for Australians to get a through fare.
"The second Hong Kong-London service, which will be at a similar time, will certainly make a big difference and I think will be the icing on the cake as far as Sydney's concerned," Sir Richard said.
=========================================
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Now if Sir Richard really wants his baby back that desperately he wouldnt be seeking other chumps (investors) to got it with him.
Or maybe Sir Richard isnt so sure of this move and wants to share any possible losses with other partners.
I wonder what offer he'll make to the Mum and Dad investors that have lost so much money investing in Virgin Blue whilst the bulk of Australian shares were going gangbusters?
VB have so far incurred over a 30% loss in share price.
Sir Richard's crystal ball might have been a bit foggy the day the forecast 3 year share price projections were made.
Wasnt Sir Richard the same man that was laughed at by financial institutions worldwide having estimated that VB shares were valued at over $2.50 whilst Chris Corrigan ended up paying $1.90 some weeks later?
When asked to produce evidence of his $2.50 price estimate he ran and hid basically to avoid the financial press.
At least Corrigan insisted on delivering a dividend to the shareholders, much to Sir Richards disgust!
And here's me thinking politicians are crooks!!
Or maybe Sir Richard isnt so sure of this move and wants to share any possible losses with other partners.
I wonder what offer he'll make to the Mum and Dad investors that have lost so much money investing in Virgin Blue whilst the bulk of Australian shares were going gangbusters?
VB have so far incurred over a 30% loss in share price.
Sir Richard's crystal ball might have been a bit foggy the day the forecast 3 year share price projections were made.
Wasnt Sir Richard the same man that was laughed at by financial institutions worldwide having estimated that VB shares were valued at over $2.50 whilst Chris Corrigan ended up paying $1.90 some weeks later?
When asked to produce evidence of his $2.50 price estimate he ran and hid basically to avoid the financial press.
At least Corrigan insisted on delivering a dividend to the shareholders, much to Sir Richards disgust!
And here's me thinking politicians are crooks!!
Last edited by Beer Can Dreaming; 8th Dec 2005 at 19:19.
BCD
I do wish people would stop chirping on about "Mum & Dad" investors. New companies always carry risk and the VB float prospectus was full of warnings re the particular extra risks of the airline industry. If investors don't read and accept these warnings, they should keep the money in the bank or invest through an institution or mutual fund which knows about risk/reward and diversification.
The vast majority of start-up airlines fail completely after raising funds, but if no-one took the risk of investing in failure we'd still all be using the stage coach, so thank heavens for those who dare.
The daily share price is actually determined by the market (and you only have to look at the recent meteoric rise of the share price of any tin-pot company in Oz which incudes the word 'uranium" in its name), not by Messrs Branson,Corrigan or Godfrey - they control the financial performance of the Company, which despite the hype and bluster, has been pretty good under the circumstances and certainly compared with what's happening elsewhere in the industry. To lump the efforts of VB's start up team with the property spruikers and con artists would be a travesty of the truth and an insult to the very real achievements of VB and all who have been associated with it.
Incidentally, it's strange that we don't hear much from the Mum and Dad investors in the bankrupt US airlines such as United,USAir,Northwest etc who have lost everything - perhaps they have a more mature attitude to risk and reward over there?
I do wish people would stop chirping on about "Mum & Dad" investors. New companies always carry risk and the VB float prospectus was full of warnings re the particular extra risks of the airline industry. If investors don't read and accept these warnings, they should keep the money in the bank or invest through an institution or mutual fund which knows about risk/reward and diversification.
The vast majority of start-up airlines fail completely after raising funds, but if no-one took the risk of investing in failure we'd still all be using the stage coach, so thank heavens for those who dare.
The daily share price is actually determined by the market (and you only have to look at the recent meteoric rise of the share price of any tin-pot company in Oz which incudes the word 'uranium" in its name), not by Messrs Branson,Corrigan or Godfrey - they control the financial performance of the Company, which despite the hype and bluster, has been pretty good under the circumstances and certainly compared with what's happening elsewhere in the industry. To lump the efforts of VB's start up team with the property spruikers and con artists would be a travesty of the truth and an insult to the very real achievements of VB and all who have been associated with it.
Incidentally, it's strange that we don't hear much from the Mum and Dad investors in the bankrupt US airlines such as United,USAir,Northwest etc who have lost everything - perhaps they have a more mature attitude to risk and reward over there?
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Bluff and bluster from Branson
Sat "Weekend Australian"
Bluff and bluster from Branson
by Matthew Stevens
December 10, 2005
JUST what on earth is Sir Richard Branson talking about?
With his usual supporting cast of babes and plastic props, Britain's flying knight popped on down to the colonies again this week to dismay us with a media stunt or two, a dose of mischievous ambition and a bevy of pretty baseless allegations.
On Thursday a Sydney lunchtime audience heard Sir Richard wanted his "baby" back.
Subsequently, we have heard how the terrible Chris Corrigan had stopped Virgin Blue taking a slice of Toll Holdings' air freight business. And that the airline needed to get fuel hedging pronto, management needs to be unshackled, and that Britain's knight of the air has a plan which would see VB flying to Japan, America and Hong Kong. Sir Richard, bless him, even floated the idea that Virgin Group should bid for Patrick to get "Chris" off his back.
Now, if Branson wants his baby back, that is fine. He can cross his fingers that a deal with Toll actually happens or he can stump up with some of his cash and bid for the thing. Will he? Probably not.
That he wants us to believe the rest of this stuff though is, frankly, embarrassing.
Let's set the record straight on some of it.
First, no one took Sir Richard's baby away from him. He sold it. And made about $800 million for three years' effort and an initial investment of $15 million.
And because Toll's Paul Little does not want to own or manage an airline, there is some chance Sir Richard might get control back on the cheap.
If Toll wins the fight for Patrick Corporation, Little plans to profoundly reduce Patrick's 64 per cent interest in the airline. A good chunk of it, 15 per cent, will go to Sir Richard at a bargain basement cost of $1.40 a share.
Remember now, Sir Richard sold a 45 per cent share in VB to Patrick for $500 million-plus in 2001 and then floated the business in 2003 selling a further 25 per cent for $2.25 a share.
Sir Richard says that VB, unlike every other sensible airline, refuses to hedge its fuel requirements. But it has hedging in place. The fuel needs for 2006 are secured at around $US65 a barrel. And, as life president of VB, you would reckon Sir Richard would already know about that. Maybe he should turn up to a board meeting or two. He has not attended one since Patrick became a major shareholder.
The blame game Sir Richard and others continue to play over VB's failure to institute a profit-protecting fuel hedging scheme in 2004-05 is also a nonsense. The decision was taken by management and endorsed unanimously by a board prepared to back the executive's judgement. Those decisions were taken before Patrick took control of VB in April.
Of that so-called scuppered freight deal, Sir Richard told The Australian on Thursday: "I've only learnt today from Paul Little that he actually put a proposal to Chris (Corrigan) 18 months ago for putting freight on Virgin, which never happened, and so he ended up doing a freight deal with Qantas.
"So he signed with Qantas for another year, and $25 million went to another airline."
Well, that is not quite right. Turns out Sir Richard had been told that Virgin Blue had approached Toll about a freight deal and that a deal could not be done. So the airline's board was never asked to consider the arrangement. Thus, Corrigan never knew about a plan.
Which brings us to the idea that VB's management need to be unshackled. Under Patrick's direction VB has returned to profitability after reducing overcapacity and embracing a clear, if by my estimation overly ambitious, strategy to broaden its business base and increase margins.
That Branson has a plan to make VB a global business, and under another moniker because of a conflict with Virgin Atlantic, flies in the face of that recovery strategy. And, in all honesty, it's nothing but hot air given that Branson currently speaks for only 25 per cent of the shares.
When Patrick pushed VB into a special dividend last month it was making it clear to one and all that risky investment in new capacity (ie, overseas ambitions) was not on the agenda.
Of course, Branson's plan to go global does have an impact for Patrick shareholders who may, ACCC willing, one day have to seriously consider Toll's bid. The offer involves Toll paper and that means Patrick shareholders accept the risk associated with the plan to re-empower Sir Richard.
The future of VB was listed as one of the major potential risks in Patrick's target statement, and the musings of the life president may yet require a supplementary target statement.
Which brings us to Sir Richard's threat to "dig into his pockets and get a few friends" to take on Patrick should Paul Little get warned off by the competition regulator. The only thing more fun than the confrontation between Little and Corrigan would be a duel between the apparently besieged "Chris" and the human logo with wings.
==========================================
Bluff and bluster from Branson
by Matthew Stevens
December 10, 2005
JUST what on earth is Sir Richard Branson talking about?
With his usual supporting cast of babes and plastic props, Britain's flying knight popped on down to the colonies again this week to dismay us with a media stunt or two, a dose of mischievous ambition and a bevy of pretty baseless allegations.
On Thursday a Sydney lunchtime audience heard Sir Richard wanted his "baby" back.
Subsequently, we have heard how the terrible Chris Corrigan had stopped Virgin Blue taking a slice of Toll Holdings' air freight business. And that the airline needed to get fuel hedging pronto, management needs to be unshackled, and that Britain's knight of the air has a plan which would see VB flying to Japan, America and Hong Kong. Sir Richard, bless him, even floated the idea that Virgin Group should bid for Patrick to get "Chris" off his back.
Now, if Branson wants his baby back, that is fine. He can cross his fingers that a deal with Toll actually happens or he can stump up with some of his cash and bid for the thing. Will he? Probably not.
That he wants us to believe the rest of this stuff though is, frankly, embarrassing.
Let's set the record straight on some of it.
First, no one took Sir Richard's baby away from him. He sold it. And made about $800 million for three years' effort and an initial investment of $15 million.
And because Toll's Paul Little does not want to own or manage an airline, there is some chance Sir Richard might get control back on the cheap.
If Toll wins the fight for Patrick Corporation, Little plans to profoundly reduce Patrick's 64 per cent interest in the airline. A good chunk of it, 15 per cent, will go to Sir Richard at a bargain basement cost of $1.40 a share.
Remember now, Sir Richard sold a 45 per cent share in VB to Patrick for $500 million-plus in 2001 and then floated the business in 2003 selling a further 25 per cent for $2.25 a share.
Sir Richard says that VB, unlike every other sensible airline, refuses to hedge its fuel requirements. But it has hedging in place. The fuel needs for 2006 are secured at around $US65 a barrel. And, as life president of VB, you would reckon Sir Richard would already know about that. Maybe he should turn up to a board meeting or two. He has not attended one since Patrick became a major shareholder.
The blame game Sir Richard and others continue to play over VB's failure to institute a profit-protecting fuel hedging scheme in 2004-05 is also a nonsense. The decision was taken by management and endorsed unanimously by a board prepared to back the executive's judgement. Those decisions were taken before Patrick took control of VB in April.
Of that so-called scuppered freight deal, Sir Richard told The Australian on Thursday: "I've only learnt today from Paul Little that he actually put a proposal to Chris (Corrigan) 18 months ago for putting freight on Virgin, which never happened, and so he ended up doing a freight deal with Qantas.
"So he signed with Qantas for another year, and $25 million went to another airline."
Well, that is not quite right. Turns out Sir Richard had been told that Virgin Blue had approached Toll about a freight deal and that a deal could not be done. So the airline's board was never asked to consider the arrangement. Thus, Corrigan never knew about a plan.
Which brings us to the idea that VB's management need to be unshackled. Under Patrick's direction VB has returned to profitability after reducing overcapacity and embracing a clear, if by my estimation overly ambitious, strategy to broaden its business base and increase margins.
That Branson has a plan to make VB a global business, and under another moniker because of a conflict with Virgin Atlantic, flies in the face of that recovery strategy. And, in all honesty, it's nothing but hot air given that Branson currently speaks for only 25 per cent of the shares.
When Patrick pushed VB into a special dividend last month it was making it clear to one and all that risky investment in new capacity (ie, overseas ambitions) was not on the agenda.
Of course, Branson's plan to go global does have an impact for Patrick shareholders who may, ACCC willing, one day have to seriously consider Toll's bid. The offer involves Toll paper and that means Patrick shareholders accept the risk associated with the plan to re-empower Sir Richard.
The future of VB was listed as one of the major potential risks in Patrick's target statement, and the musings of the life president may yet require a supplementary target statement.
Which brings us to Sir Richard's threat to "dig into his pockets and get a few friends" to take on Patrick should Paul Little get warned off by the competition regulator. The only thing more fun than the confrontation between Little and Corrigan would be a duel between the apparently besieged "Chris" and the human logo with wings.
==========================================
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MAX TOW.
As with anything you only invest what you can afford to lose.
Unfortunately in this case the Virgin Prospectus and estimates have failed miserably.
Wirraway has just posted the previous article that shows Branson for what he really is......both a liar (with factual evidence) and full of hot air.
He conned financial institutions as well to invest in VB.
These institutions have for the better part abandoned this company and know Sir Richard for what he really is.
Their so called financial performance was handed to them on a platter after Ansett collapsed.
Rumour was all was not well for VB - only a few weeks trading capital remained before Ansett fell over.
They rode the gravy train after Ansett went to the wall and now they have some real competition they aint doing so well.
MAX TOW - read the article in this thread about Sir Richard and then tell me with a straight face that you would have been happy as an initial investor or that Chris Corrigan is to blame for their woes as Branson would falsely claim.
The public just aint that stupid MAX TOW !!
As with anything you only invest what you can afford to lose.
Unfortunately in this case the Virgin Prospectus and estimates have failed miserably.
Wirraway has just posted the previous article that shows Branson for what he really is......both a liar (with factual evidence) and full of hot air.
He conned financial institutions as well to invest in VB.
These institutions have for the better part abandoned this company and know Sir Richard for what he really is.
Their so called financial performance was handed to them on a platter after Ansett collapsed.
Rumour was all was not well for VB - only a few weeks trading capital remained before Ansett fell over.
They rode the gravy train after Ansett went to the wall and now they have some real competition they aint doing so well.
MAX TOW - read the article in this thread about Sir Richard and then tell me with a straight face that you would have been happy as an initial investor or that Chris Corrigan is to blame for their woes as Branson would falsely claim.
The public just aint that stupid MAX TOW !!
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Does anybody ever believe the crud that Branson is always coming out with. As much as it pains me to say it, Dixon has played both Branson and Corrigan off a break. He's eaten away at the thongs and sarong brigade that was VB's base by setting up Jetstar and will now snooker any VB international exspansion with Jetstar Int.
And as a matter of interest is there any truth to the story that VB is doing everything it can to get out of the deal it struck to install the all singing and dancing, bells and whistles PES system that Godfrey was singing the praises of, now that they realise what it weighs and the additional 6% fuel burn required when fitted.
And as a matter of interest is there any truth to the story that VB is doing everything it can to get out of the deal it struck to install the all singing and dancing, bells and whistles PES system that Godfrey was singing the praises of, now that they realise what it weighs and the additional 6% fuel burn required when fitted.
