It's no secret bankers and fund managers are crawling all over Virgin Australia's Velocity Frequent Flyer.
It's towards the top of most equity capital markets teams' initial public offering pitchbooks and top of mind for existing Virgin shareholders and research analysts.
To recap, Velocity is 65 per cent owned by ASX-listed Virgin and 35 per cent by private equity investor Affinity Equity Partners. While it is said to have been a happy relationship, the pair clearly have different motives and time horizons.
The business is growing strongly and as Street Talk reported late last year, the two owners' standstill agreement is set to expire in April.
All that had ECM teams most excited about a potential float.
But you would have to think that any chance of a $2 billion-plus Velocity IPO in 2017 has been dealt a fatal blow.
When Woolworths inked a $1.8 billion petrol sale and strategic partnership with BP, it pinched one of Velocity's key partners. And, perhaps more importantly, one of Velocity's key legs of growth.
As part of the deal, BP signed up as a cornerstone partner in the Woolworths Rewards program which also features Qantas Frequent Flyer points.
And like a lot of industries in corporate Australia, you are either with Qantas or Virgin's camp. Not both.
So assuming BP heads to the Woolworths/Qantas camp - and that is a loaded assumption with the competition regulator looking closely at the BP/Woolworths deal - Velocity will have a big hole to plug.
The obvious solution would be to sign a deal with Woolworths' old partner, Caltex Australia. However, analysts reckon Caltex may have its eyes on a rewards program of its own.
What's worse is that none of these changes are expected to happen quickly. Woolworths reckons its petrol deal could take up to another 12-months to complete.
Given the uncertainty, it's hard to see how Velocity could present a concrete set of numbers for an IPO prospectus, or a compelling growth story for investors.
Virgin and Affinity are no doubt working on a solution. If nothing else, it has created a whole new piece of work for those ECM bankers who were licking their lips about a Velocity IPO in 2017 and a chance to get in the owners' ear.
