US investor ‘not planning’ Hostelworld bid after building 13% stake

A US investor who has built up an almost 13 per cent stake in Hostelworld has said that he is not planning to bid for the online hostel booking company, which saw revenues and earnings slump last year amid international Covid-19 travel restrictions.

Charles Jobson, co-founder of Boston-based hedge fund Delta Partners LLC, first disclosed a 4.5 per cent personal stake in Hostelworld last July and ended 2020 with a holding of in excess of 10 per cent. Hostelworld released a filing from Mr Jobson earlier this week revealing that he had crossed the 11 per cent and 12 per cent notifiable thresholds in January and March, unknown to the Irish market at the time.

Mr Jobson’s 12.7 per cent holding in the business is currently worth €14.5 million, based on its market value of just under €114 million.

A buyer that passes the 3 per cent threshold of an Irish-listed business, and every 1 percentage point thereafter, is required to notify the company within two days of breaching these levels. The company must disclose this to the wider market by the end of the next trading day following receipt of the notification.

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Mr Jobson told The Irish Times that he had notified the Financial Conduct Authority in the UK, where Hostelworld has its primary listing, immediately after crossing the key thresholds, but was not aware until recently that he was obliged to tell the company.

Takeovers

The hedge fund manager, who has had form in being involved in takeovers in the past, said that he has no such plans in the case of Hostelworld. “I like the business,” he said. “I have no plans to take it over.”

In late 2019, Mr Jobson joined forces with Paris-based private equity firm PAI Partners to buy Dutch organic foods company Koninklijke Wessanen off the Euronext Amsterdam stock exchange in a deal worth €885 million. He had been investor in the business for a decade beforehand.

Mr Jobson is also a board member of US-listed fast-food company Good Time Restaurants. He co-founded and ran Delta Partners between 1999 and 2019, reaching peak assets of $2.9 billion, according to a profile on Good Time Restaurants' website.

Hostelworld reported last month that its revenue plunged 81 per cent to €15.4 million last year, as Covid-19 led to an effective shutdown of the global travel market. It swung into a €48.9 million pretax loss from an €8.4 million profit for 2019.

‘Uncertain environment’

The company, led by chief executive Gary Morrison, raised €15.2 million in a share sale last June to shore up its balance sheet amid the shock. It agreed a €30 million term loan facility in January and drew it down the following month, saying the actions to boost its finances "materially strengthened the group's capital base in the uncertain environment".

Mr Morrison said in the annual report, published late last month, that he was confident that Hostelworld will emerge from the Covid-19 crisis stronger than before, as travel picks up with the roll-out of vaccination programmes and expected easing of travel restrictions internationally.