Indian travel services firm Cox & Kings Ltd is in talks to acquire European holiday specialist, Holidaybreak Plc., in what can be the biggest overseas deal in the travel services industry.
Founded in 1973, Holidaybreak is based in Northwich (UK) and offers an extensive portfolio that includes camping brands like Eurocamp and Keycamp, an adventure holidays business (Explore) and the Hotel Breaks division.
According to Holidaybreak, the discussion may or may not lead to an offer at the price of 432.1 pence in cash per ordinary share. However, Holidaybreak’s scrip shot up 12 per cent and was trading at 412 pence a share on the London Stock Exchange in early trading hours on Tuesday. At this price, the firm has a market capitalisation of £290 million ($475 million).
At the indicative offer price of 432.1 pence a share, the deal will value Holidaybreak at £305 million ($500 million), according to VCCircle estimates.
“As part of its overall strategy for growth and expansion, the company does evaluate opportunities from time to time. In line with the company’s growth strategy, it is in talks with Holidaybreak Plc., a company listed on the London Stock Exchange, which may or may not lead to an offer for shares in Holiday Plc. At this stage, there is no certainty that any offer will be made by the company or that any offer, if made, will be acceptable to the shareholders of Holidaybreak Plc.,” Cox & Kings said on the proposed Holidaybreak deal.
On the Bombay Stock Exchange, the shares of Cox & Kings closed at Rs 197.8, down 2.25 per cent. This could be a reaction related to investor concerns of a large international acquisition and potential impact on the balance sheet.
In April this year, the company’s board had said that it might raise up to Rs 1,500 crore through issue of shares/convertible instruments, besides raising the borrowing power of the firm from Rs 1,000 crore to Rs 1,500 crore.
The firm had also got the nod from FIPB, the nodal body monitoring foreign investment in India, to bring in FDI worth Rs 750 crore. It now plans to use the proceeds for acquisitions and new business launches, besides funding its current operations.
Mumbai-based Cox & Kings had recently teamed up with other shareholders of the privately held US-based travel management firm Radius, to pump in fresh capital in a multi-million dollar recapitalisation deal. The Indian company already held stake in Radius.
Cox & Kings is one of the world’s oldest travel services brands, established in 1758. It is a premium brand which operates across 20 countries through its offices and through franchise sales shops.