Travel giant Cendant takes over ebookers for £209m

Dinesh Dhamija, ebookers' chief executive and founder who is stepping down as a result of the acquisition of the internet travel site by Cendant of the US, will receive £5m in return for agreeing not to compete for 10 years with the company.

Dinesh Dhamija, ebookers' chief executive and founder who is stepping down as a result of the acquisition of the internet travel site by Cendant of the US, will receive £5m in return for agreeing not to compete for 10 years with the company.

Mr Dhamija will also collect compensation for leaving his executive job, though he will stay on as a consultant to Cendant. The 20-year veteran of the travel industry will in addition collect a hefty windfall for his 41 per cent stake in ebookers, which is being sold to Cendant for £209m.

Cendant, the world's largest travel group, whose brands include the Avis car rental chain, said the deal would strengthen its position in Europe.

Executives announcing details of the merger yesterday conceded the £5m non-compete payment was "a large amount of money". But they added it was necessary to "ensure the enforceability" of the contract.

The payment comes after the blockbuster two-year £10.7m non-compete payment made to Tony Ball by BSkyB after he resigned last year.

Under the terms of the deal with Cendant, which has been organised as a scheme of arrangement, ebookers' shareholders will receive 320p a share in an all-cash offer.

Cendant, based in New York, has built a war chest for acquisitions having spun off several businesses. Announcing the details of the ebookers deal which began to be rumoured on Wednesday evening, Cendant said it "still had its eyes open for businesses that were well run".

Cendant said the acquisition, to be completed in the first quarter of 2005, was expected to have no impact on that year's earnings but would increase earnings by 2 to 3 cents per share in 2006.

Samuel Katz, chief executive of Cendant Travel Distribution Services Division, said: "The addition of ebookers ... provides a foundation for significant growth opportunities."