First Choice buys out Holiday Hypermarkets in £38m deal

First Choice Holidays, the travel company, is to buy the 75 per cent interest in Holiday Hypermarkets that it does not already own, for £37.6m in cash and shares.

First Choice Holidays, the travel company, is to buy the 75 per cent interest in Holiday Hypermarkets that it does not already own, for £37.6m in cash and shares.

Holiday Hypermarkets operates large scale travel agents. They average 15 times the turnover of a traditional high street travel store and cover about10,000 sq ft of space in a format developed for out-of-town trading.

The hypermarkets offer an extended brochure range, coffee shops, mini cinemas for promotional videos, themed destination areas and interactive activities.

First Choice will pay £25.4m in shares, and the rest in cash, to buy the 75 per cent interest from West Midlands Co-operative Society and United Norwest Co-operatives. It will also assume £9m of debt.

The acquisition, expected to be completed by 30 April, is provisional on the conversation of Co-op Holiday Hypermarkets (CHH) to a private company.

In Septmeber last year CHH's net assets stood at £32.5m. Loss-making Holiday Hypermarkets was set up two years ago

Peter Long, chief executive of First Choice, said: "The Holiday Hypermarkets concept has proved very successful with the consumer.

"In the past year we have opened 18 stores and by the end of March we will trade out of 24 stores."

Mr Long said that buying the outstanding share of the business would strengthen First Choice's retail position in the holidays market.