Cox & Kings set to take Holidaybreak reins

Tour operator Cox & Kings is in talks to acquire British specialist travel company Holidaybreak. A deal could result in the biggest cross-border transaction by an Indian travel company.

London Stock Exchange-listed Holidaybreak confirmed the talks in a note to shareholders on Tuesday. 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 Monday’s closing price.

Holidaybreak 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 earlier 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 closing in a week, 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.