Online Travel shares plunge after takeover talks collapse

Shares in Online Travel plunged 10 per cent yesterday after the internet travel minnow said talks with an unnamed party over a possible takeover had ended, just a day after revealing to the market that discussions were taking place.

Shares in Online Travel plunged 10 per cent yesterday after the internet travel minnow said talks with an unnamed party over a possible takeover had ended, just a day after revealing to the market that discussions were taking place.

Lastminute.com, its larger rival and survivor of the dot.com rout, was widely tipped as the interested party and some in the City believe it may still decide to proceed with a hostile offer.

In a brief statement the company said the talks over a possible deal "have now terminated".

Online Travel was forced on Wednesday to respond to a spike in its share price by admitting that it had received an approach but would not reveal the identity of the party.

Industry sources had linked the acquisitive lastminute with Online Travel, which offers travel services for about 50 partner internet sites, including Freeserve and BT Internet as well as running its own site.

Lastminute, which last month tapped the equity market for the first time since its flotation at the peak of the internet bubble to help fund the acquisition of the group behind the travel4less websites, did not comment on the rumours.

Online Travel shares dropped 3.25p to 30.5p on the Alternative Investment Market, to value the company at £30.2m. The price has recovered from a low of 12p hit in the wake of the 11 September terror attacks. Shares in lastminute dropped 1.25p to 98.5p.

Online Travel, which runs websites including bargain-holidays.com and ifyou-explore.com, was founded four years ago and floated in May 2000.

It made a loss of £2.6m last year on sales of £46m.