In what could be the largest international acquisition by an Indian company in the travel segment, Cox & Kings through its wholly owned subsidiary Prometheon Holdings (UK) Ltd has entered into an agreement to acquire the entire issued and to be issued share capital of British specialist travel company Holidaybreak Plc. To be an all cash deal once concluded, the acquisition price according to C&K will be 432.1 pence per share.
Peter Kerkar, director, Cox & Kings Ltd, said, “The offer price values Holidaybreak’s fully diluted share capital at approximately 312 million pounds which is a premium of approximately 35.5% to the closing price of 319 pence per share of travel company’s closing share price on July 22, 2011.” If everything goes as per plans, the acquisition deal is expect to be completed by September 27, 2011.
Nomura advised the transaction to C&K while Axis Bank is the banker for the deal. For Holidaybreak Citibank was the advisor for the deal.
As per C&K top management, the boards of both companies have reached an agreement on terms of a recommended cash acquisition which will now be implemented by way of a court-sanctioned scheme of arrangement. While C&K already has consent from 31.8% of Holidaybreak’s (institutional) shareholders it still has to get a majority i.e. extent of 75% consent from the existing shareholders to complete this acquisition.
On funding the acquisiton, Kerkar said, “Around 125 million pounds (from C&K’s balance sheet) will be equity and balance will be debt raised from Axis Bank at an SPV level.”
Holidaybreak also has a debt on its books to the tune of 137 million pounds which is likely to be absorbed by Cox & Kings post successful completion of the acquisition process. “The debt will continue on its books as well,” said Anil Khandelwal, chief financial officer, Cox & Kings.
Earlier, London Stock Exchange-listed Holidaybreak had confirmed the talks in a note to shareholders on Tuesday (July 26, 2011). The company, which provides residential outdoor education and adventure trips for school children in the UK and other major European markets, is valued at £225.24 million, based on its Monday’s closing price.
Holidaybreak had told shareholders the discussions may or may not lead to a cash offer of 432.1 pence per ordinary share, which is at a premium of 18% to the stock’s Monday close.
At this price, Holidaybreak would be valued at over £265 million, or Rs1,900-2,000 crore, though reports in a section of British media had pegged the deal value at £300-450 million.
“We view the offer price of 432.1p as broadly adequate... the main prize for any bidder is the education division,” a Reuters report quoted analyst Sahill Shan of Brewin Dolphin as saying.
Industry experts see the deal getting through, unless Holidaybreak gets a competitive bid.
“Another travel company, TUI Travel, was initially rumoured to be a potential bidder. Its management has, however, ruled out making an approach. With no potential suitor in sight, it is very likely that the deal will get through in C&K’s favour,” said the head of travel research at a leading consultancy firm.
Analysts feel the acquisition will stand Cox & Kings in good stead in the international travel market, given the growth in outbound traffic.
Peter Kerkar, director, Cox & Kings Ltd, said, “The offer price values Holidaybreak’s fully diluted share capital at approximately 312 million pounds which is a premium of approximately 35.5% to the closing price of 319 pence per share of travel company’s closing share price on July 22, 2011.” If everything goes as per plans, the acquisition deal is expect to be completed by September 27, 2011.
Nomura advised the transaction to C&K while Axis Bank is the banker for the deal. For Holidaybreak Citibank was the advisor for the deal.
As per C&K top management, the boards of both companies have reached an agreement on terms of a recommended cash acquisition which will now be implemented by way of a court-sanctioned scheme of arrangement. While C&K already has consent from 31.8% of Holidaybreak’s (institutional) shareholders it still has to get a majority i.e. extent of 75% consent from the existing shareholders to complete this acquisition.
On funding the acquisiton, Kerkar said, “Around 125 million pounds (from C&K’s balance sheet) will be equity and balance will be debt raised from Axis Bank at an SPV level.”
Holidaybreak also has a debt on its books to the tune of 137 million pounds which is likely to be absorbed by Cox & Kings post successful completion of the acquisition process. “The debt will continue on its books as well,” said Anil Khandelwal, chief financial officer, Cox & Kings.
Earlier, London Stock Exchange-listed Holidaybreak had confirmed the talks in a note to shareholders on Tuesday (July 26, 2011). The company, which provides residential outdoor education and adventure trips for school children in the UK and other major European markets, is valued at £225.24 million, based on its Monday’s closing price.
Holidaybreak had told shareholders the discussions may or may not lead to a cash offer of 432.1 pence per ordinary share, which is at a premium of 18% to the stock’s Monday close.
At this price, Holidaybreak would be valued at over £265 million, or Rs1,900-2,000 crore, though reports in a section of British media had pegged the deal value at £300-450 million.
“We view the offer price of 432.1p as broadly adequate... the main prize for any bidder is the education division,” a Reuters report quoted analyst Sahill Shan of Brewin Dolphin as saying.
Industry experts see the deal getting through, unless Holidaybreak gets a competitive bid.
“Another travel company, TUI Travel, was initially rumoured to be a potential bidder. Its management has, however, ruled out making an approach. With no potential suitor in sight, it is very likely that the deal will get through in C&K’s favour,” said the head of travel research at a leading consultancy firm.
Analysts feel the acquisition will stand Cox & Kings in good stead in the international travel market, given the growth in outbound traffic.
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