Gol in Talks with Webjet

Brazilian airline Gol Linhas Aereas Inteligentes is in talks with fellow Brazilian airline Webjet. A valuation multiple of around 7x Ebitda for the start-up airline is likely, yielding a potential total deal value of around BRL815m ($509m), say analysts. Webjet recorded Ebitda of BRL96m ($61.36m) and net debt of BRL143m. Gol and Copa, for instance, trade at around 8x Ebitda. “I think it’s good news [for Gol]” says one Brazil-based equity analyst. He sees the deal as a slight positive for Gol, as the transaction’s value is worth only about 10% of its enterprise value. Although no new routes would come through the acquisition of Webjet, Gol is removing an aggressive rival, potentially allowing it to pass along price increases to customers. Five-year old Webjet is owned by hotel and tourism company GJP Participacoes and it had been planning an IPO through Bradesco, Citi and JPMorgan before pulling it in May. Gol declines to say if it has retained advisors. Gol stock climbed 2.06% to close at $12.87 on the NYSE Friday.