Cox & Kings has made an indicative all-cash offer of 432.1p a share, representing a premium of 18 per cent to the stock’s Monday close.
A deal at this price would value the firm at almost £270m, above Holidaybreak’s closing market cap yesterday of £256.9m.
Sources familiar with Holidaybreak said the group could receive a formal offer from Cox & Kings as soon as this week, in a deal that would end the Indian firm’s year-long search for a global buy.
The firm, which is part-owned by a subsidiary of Deutsche Bank AG, floated on the Bombay stock exchange in 2009 in order to fund acquisitions and tap the growing numbers of Indians traveling abroad.
Holidaybreak, which provides residential outdoor education and adventure trips for school children, outlined in its interim results in May its strategy for expanding its educational division, which analysts believe is largely undervalued.
“The main prize for any bidder is the education division and as such the valuation has to reflect the structural growth attractions and market leading position of this business,” Sahill Shan, an analyst at Brewin Dolphin, said in a note yesterday.
Last month the group sold its London-based theatre tickets agency West End Theatre Bookings for £10.9m to reduce its debt and divest its non-core assets.
“At this stage there can be no certainty that any offer for the Company will be forthcoming,” the firm said in a statement yesterday.
MEET THE ADVISERS
Holidaybreak is being advised by Citigroup, with UK M&A managing director Jan Skarbek leading the advisory team.
Skarbek has also advised music group BMG during its takeover of Chrysalis, betting chain William Hill and Lonmin during last year’s £160m equity issue. He frequently works with Citi stalwart David Wormsley on the group’s high profile advisory jobs.
He joined Schroders after graduating from Oxford University in 1993, moving up the ranks and sticking with the firm when its investment banking arm was taken over by Citigroup in 2000.
Peel Hunt’s head of consumer Dan Webster is acting as corporate broker to Holidaybreak. Webster has been with Peel Hunt for over two years, and was previously an associate director at Bridgewell and prior to this an associate at law firm Freshfields.
Webster’s other clients include Stanley Gibbons and Craneware. Peel Hunt, in its former guise as KBC Peel Hunt, was first hired to act as Holidaybreak’s corporate broker and financial adviser in 2009.
Nomura has been hired as the financial adviser to Cox & Kings.