Lastminute agrees to £577m takeover bid from US rival

Click to follow
The Independent Online

Lastminute.com, the online travel company whose flotation marked the end of the dot.com boom in 2000, is set to lose its independence after receiving a takeover approach from Sabre Holdings, the US rival which owns the Travelocity website.

Sabre's interest in buying Lastminute sent the online company's shares soaring 45.4 per cent to 153.25p, putting a value of £522m on the company.

Analysts believe Sabre's interest could trigger a bidding war, with the most likely rivals to Sabre being InterActiveCorporation, which owns Expedia, and Cendent, the travel and property group that owns Ebookers.

Lastminute's 2,000 employees across 13 European countries will be waiting nervously to see who buys the business. A US buyer could mean a number of jobs are preserved.

Lastminute, which bought 14 companies in five years, is seen as perhaps the biggest brand in the online travel industry, but has struggled to make profits since its flotation five years ago. Its last annual results showed turnover of £440m on transactions carried out valued at £992m. Although it made pre-tax profits of £4.5m before exceptional items and goodwill amortisation, it made an overall loss of £77.2m for the year to 30 September.

But by combining the brand name with a technology platform supporting other online businesses, and significantly cutting overheads, a buyer could transform the operation into a profitable enterprise. Despite yesterday's share price surge, investors who bought into the shares when it floated at 380p in March 2000 stand no chance of seeing that price again.

Sabre's move comes after its chairman and chief executive, Sam Gilliland, has stood by while rivals have snapped up businesses to increase their size in the online market.Sabre would not comment on its interest in Lastminute.

Comments