Cox & Kings to buy UK's Holidaybreak

Tour operator Cox & Kings Ltd on Wednesday agreed to buy British specialist travel company Holidaybreak for 312 million pounds (USD 511.3 million) in an all cash transaction, as it expands into new product areas and markets reports CNBC-TV18's Tanvi Shukla.

This will be a 100% acquisition of the company, and it will be subject to majority approval from the shareholders of the company. As of now, they have 31% consent from the institutional investors of the company. The latest announcement comes less than a week after Cox & Kings said it acquired a minority stake in the US travel firm Radius for an undisclosed amount. Prometheon Holdings Ltd, a unit of Cox & Kings, would be the acquirer, according to a statement from Holidaybreak. The deal will be funded by part equity and part debt, wherein Cox & Kings will float a Special Purpose Vehicle (SPV) and they will put in equity of 125 million pounds and the rest will be funded by Axis Bank. On Tuesday, Holidaybreak said it was in discussions with Cox & Kings for a cash offer of 432.1 pence per ordinary share, a premium of 18% to the stock's Monday close. Holiday Break is essentially into tour and travels, specializing in education activity trips for children. As on September 2010, the company had annual revenue of 461 million pounds and profit after tax (PAT) of 26 million pounds. The company has approximately 138 million pounds of debt in its books, which will also be acquired by Cox & Kings. Cox & Kings shares closed down 3% at Rs 192.9 on the National Stock Exchange. Holidaybreak shares were up 4% at 429.5 pence on the London Stock Exchange. (USD 1 = 0.610 British Pounds)