Activist shareholder in dispute with Yatra, India’s largest corporate travel manager – Skift


An activist investor has taken a stake in Yatra, India’s largest online business travel service provider. Timothy L. Maguire Investment Trust began advocating for change in a way that Yatra management has never been forced to face before.

Yatra has more than 700 corporate customers and 35,000 small and medium-sized customers for its business travel services.

Activist Timothy Maguire has said he wants a director appointed to Yatra’s board to advocate for operational changes and the restructuring of its corporate governance. Maguire published an open letter (embedded below) which required management to exercise more detailed oversight of strategy, product development and capital allocation.

His complaints included that the company had not had a CFO since October 2019. Maguire also cited last year’s unsuccessful acquisition attempt by Ebix, a conglomerate with a checkered legal history, as an example of incompetent management. . He’s also looked for more product changes to support more cross-selling (although that’s easier said than done, even in the case of the world’s biggest tech companies).

Yatra released a statement this week saying that its management team and board of directors had held several meetings with representatives from Maguire over the past few months to hear their views and that the company would provide a public response as it progressed. time.

Yatra did not respond to Skift’s request for comment. Maguire declined to comment.

Yatra’s achievements

Since 2018, Yatra has ceased to hold an annual general meeting. The company said it is standard national practice in India to forgo such meetings. The lack of board elections means the company’s five directors serve indefinitely, although in May 2021 Stephen Schifrin joined the board as a non-executive member. Schifrin is the legal advisor to Terrapin Partners, which helped take Yatra public in 2016 via a blank check company, and has remained a major shareholder of Yatra.

While Yatra may have made some missteps in considering acquiring Ebix last year, the local travel company expertly negotiated rough waters for years under the leadership of co-founder and CEO Dhruv Shringi.

After MakeMyTrip merged with rival Ibibo in 2017, Yatra wisely rotated the focus. It has further invested in developing a business travel business to complement direct competition for customer acquisition as a consumer oriented business.

Yatra still has a mainstream online travel agency business with a market share of around 10% in India, which places it in second place behind MakeMyTrip Group. This consumer business was the original model of the business.

Still, Yatra’s shift in business travel mix, made through a few acquisitions and new products, worked. The company has become the largest independent provider of self-booking tools in India to businesses for booking flights, hotels and insurance, as measured by gross booking volume before the pandemic.

Looking ahead, Yatra’s new cloud-based subscription service features aspects of the offerings that have made TravelPerk and TripActions so popular in Europe and the United States. latest financial documents.

Activists’ options

Maguire appeared to want to embarrass management first by adopting preferred business tactics, based on her open letter. His next move is less clear.

He could either try to enlist other institutional shareholders, orchestrate buyout shops to invest in a pro-Maguire voting bloc, or court private equity firms to threaten a takeover.

In 2013, Maguire took a 5% stake in US Auto Parts Network, and his company offered to increase its stake by purchasing Oak Investment Partners shares in the private equity firm. The company did not sell its stake to Macguire, but it did support its efforts to install the talent it recommended to the company’s board of directors.

In theory, Yatra shareholders could similarly ally themselves with Maguire. An alliance could force management to make some changes. But the fact that Macguire wrote his letter himself suggests he had yet to recruit allies from among major shareholders, such as Macquarie Group, which owns around 7% of Yatra, and entities affiliated with Nathan Leight. , which hold around 9%.

Maguire and the above investors, as well as other institutional investors, including the entities of Terrapin, Network 18 Media & Investments and Reliance Infrastructure, collectively own approximately 65% ​​of the outstanding shares convertible into common stock for approximately 57% of the society. If a few acted in concert, they could advocate for change.

So you can expect this feud with the shareholder activist to last for some time.

If Yatra engages in a process, like a proxy race, with the activist shareholder, it could take a long time for management. A battle could also damage the company’s reputation for its corporate governance or relationships with shareholders.
Here is Maguire’s open letter to Yatra management:

Download (PDF, 677 KB)

Photo Credit: The Kohinoor Suite at Oberoi, New Delhi, part of Oberoi Hotels and Resorts. India’s largest business travel manager, Yatra, faces a shareholder struggle. Oberoi


Corina C. Butler

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