US giant buys Inspirations travel group for pounds 42m
Friday 25 July 1997
A new force is set to emerge in the UK tour operator and travel agency business with Carlson, the US leisure giant, acquiring Inspirations in a pounds 42m deal. Inspirations is Britain's fourth largest tour operator after Thomson, Airtours and First Choice. It also owns a chain of almost 100 travel agents under the AT Mays name.
Carlson, which already runs 300 travel UK agencies, said yesterday that it planned to increase its high street presence from 407 branches to 600 in three to four years. The name will be changed next year, though the Inspirations name will be retained for the holding company. There has been no decision on the new name for the travel agency business, though Carlson is a possibility.
Michael Batt, Carlson's president, said the deal would not mean a holiday price war but it would mean more competition on the high street.
The competition authorities are currently investigating the vertically integrated travel agencies which supply a pounds 7bn market. Thomson owns Thomas Cook, while Airtours the number two, owns Going Places.
The Inspirations deal will give Carlson a 6-7 per cent share of the UK travel agency market. Artac, an association of independent travel agencies with which Carlson has links, has a further 5 per cent.The pounds 42m deal values each Inspirations share at 75p, a premium of 22 per cent to the mid-market closing price on Wednesday. Inspirations shares closed 10p higher at 71.5p on the news.
The deal means a bumper windfall for some of the directors. Vic Fatar, the Inspirations founder and chief executive, who owns 3.3 million shares will net pounds 2.5m. Paul Jackson, the finance director owns 2.7 millions shares and will receive pounds 2m. The Inspirations directors are unanimously recommending the offer.
Under the terms of the deal Carlson will place the group's airline, Caledonian, in a transitional arrangement to comply with the rules on the licensing of air carriers within the European Union.
In a separate agreement British Airways is selling its holding of unlisted convertible shares to Carlson for pounds 5.5m.
Commenting further on the deal, Mr Batt said: "The acquisition significantly improves our competitiveness in the UK. It secures a supply of quality package tours for our customers and the improved efficiencies will enable us to offer those customers better value."
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