Cox & Kings has agreed to acquire UK-based Holidaybreak for £312-million (Rs 2,252 crore), carrying on with its strategy to expand into overseas markets and venture into niche travel segments. The deal will be funded through a mix of debt and equity. Axis Bank is helping the company raise debt. The company has already received support for the acquisition from major shareholders and Holidaybreak directors.
Counter bid
However, the Holidaybreak's board can consider a counter bid. Even if Holidaybreak gets another higher offer, Cox & Kings can still walk away with the company, provided it is able to match that deal, Mr Peter Kerkar, Executive Director of Cox & Kings, said on the sidelines of a late-evening news conference on Wednesday.
“If the deal still does not happen, we will be paid one per cent of the overall consideration agreed (£3.1 million) to cover our expenses,” he added. News reports suggested that Thomas Cook and TUI Group are the other parties interested in acquiring Holidaybreak.
Holidaybreak, a provider of residential and outdoor education and adventure trips for school children, generates revenues of £461 million and had a profit before tax of £26 million. The company had net debt of £137.9 million for the year ended March 31, 2010.
The offer price is at a 35.5 per cent premium to the closing price of 319 pence a share of Holidaybreak on the London Stock Exchange as on July 22.
“We believe we can put together synergies that no two companies can…. In India, most of the overseas travel happens during March, April and May while in the UK most of it happens during July, August and September,” Mr Kerkar said.
Holidaybreak has three operating units: Education and adventure, hotel breaks, and camping.
The Cox & Kings scrip was down 2.38 per cent to close at Rs 192.95 on the Bombay Stock Exchange on Wednesday.