Webjet's B2C spin-off extends gains following demerger
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The news: Shares in Webjet's newly listed spin-off B2C company 'Webjet Group' extended gains on the ASX after its market debut at the start of the week.
The numbers: Webjet Group, which encapsulates the travel bookings provider's B2C businesses, was up 15.4% to $0.99 by 2:30pm AEST. The stock has gained 25% since it debuted at 80 cents per share on Monday.
The original listed company, renamed 'Web Travel Group' and comprising the WebBeds wholesale bookings business, was up 0.5% to $7.19, having initially slumped following the demerger.
The context: Citi slashed its target price on Web Travel Group from $10.70 to $8.25 but analysts said they remain "cautiously optimistic" and 'buy' rated on the new standalone B2B business.
Webjet shareholders last week approved a resolution to demerge into two ASX-listed companies, with the proposal being backed by over 97% of shareholders voting.
What they said: "...we have been cautious for some time around a mean reversion in hotel [average daily rates] and occupancy," Citi analysts said.
"However, we estimate this isn't it, and to date we are yet to see it in the data," they said.
The source: Citi research
