updated 5/12/2005 9:52:29 AM ET 2005-05-12T13:52:29

Sabre Holdings Corp., the U.S. owner of online travel group Travelocity, said Thursday it has agreed to purchase British rival lastminute.com PLC in a deal that values the money-losing company at 577 million pounds ($1.1 billion).

Sabre said its Travelocity Europe subsidiary is offering 1.65 pounds ($3.08) per share for lastminute.com, representing a 7.8 percent premium to the company’s closing share price on Wednesday, when the stock surged 45 percent on expectations of a deal.

The shares rose another 9 percent to 1.67 pounds ($3.12) in afternoon trading Thursday after the deal was announced.

Lastminute.com, one of the few British online companies to survive the burst of the dot-com bubble in 2000, sells flights and vacation packages over the Internet in 13 European countries. Sabre Chairman Sam Gilliland said the deal supports the U.S. company’s strategy of expanding its international travel services.

“We expect this combination would provide us greater opportunity to profit from the fast-growing European online segment,” Gilliland said.

Lastminute.com Chief Executive Brent Hoberman, who founded the company with partner Martha Lane Fox in 1998, will remain at the helm of the combined lastminute.com and Travelocity Europe business.

“It is too easy to write this up as an end of a journey,” Hoberman said. “It takes ten years to build a company and we are only at year seven and I am sure you will see this business continue to perform.”

Hoberman and Lane Fox, both in their mid-30s and who were media darlings at the height of the company’s success, will pocket about 40 million pounds ($75 million) between them from the deal.

However, the pair’s holdings are still worth far less than during the dot-com boom in 1999, when lastminute.com stock peaked at 5.60 pounds.

The company listed on the stock exchange five years ago, but the tech bubble burst soon after and it has struggled to maintain its profits and share price. It reported Thursday that its net loss had widened in the six months ended March 31 to 45.5 million pounds ($85 million), from 39.5 million pounds in the same year-ago period.

Analysts have had the company marked as a takeover target for some time.

“When it first floated it had the turnover of a couple of British pubs but was valued at more than (national stationary chain) WH Smith,” said Henk Potts of Barclays Stockbrokers.

But, he said, “the big airlines and hotels have their own Web sites, and it’s no longer a unique operating environment for them.”

The company tried to address that issue, making 14 acquisitions in the past three years to stretch its reach beyond air travel and vacation packages to entertainment tickets and restaurant bookings.

Sabre said it would keep lastminute.com, which employs around 2,000 people, as its lead brand in Britain and continental Europe.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com