India’s Cox & Kings to buy UK’s Holidaybreak for $ 511 m

Wednesday, 3 August 2011 01:35 - - {{hitsCtrl.values.hits}}

BANGALORE/MUMBAI (Reuters): Indian tour operator Cox & Kings Ltd will buy British specialist travel company Holidaybreak for 312 million pounds ($511.3 million) in cash, helping it meet the growing demand for education travels.

Holidaybreak provides educational and activity trips for school children in Europe.

“It’s a very defensive and recession-proof product. We believe that educational travel is the way to grow in the future,” Cox & Kings executive director Peter Kerkar said.

Cox & Kings expects the acquisition to boost its earnings, its Chief Financial Officer Anil Khandelwal said.

The company, the parent of UK-based unlisted Cox and Kings, gets around half its overall revenue from its international operations and has been looking at overseas acquisitions to tap the booming outbound market and drive future earnings growth.

The Indian outbound travel market could expand to $35-$40 billion over the next five years from the current $12 billion buoyed by a rapidly growing organised tourism market, a senior Cox & Kings official had said earlier this year.

The deal, which Cox & Kings said would be the largest overseas acquisition by an Indian company in the sector, has the support of major Holidaybreak shareholders owning about 31.8 per cent of its issued capital.

Holidaybreak said it was in discussions with Cox & Kings for a cash offer of 432.1 pence per ordinary share.

“It looks like a good price, but not a great price...but I suppose markets are as they are and it’s a cash offer and they may as well take it,” David Gorman, analyst with Milkstone, told Reuters.

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