Travelzest shares plunge after takeover talks fail
Shares in upscale travel company Travelzest dived more than 22% on news that takeover talks with Canadian firm Red Label Vacations had ended.
Travelzest said that although Red Label had offered more than the current share price, it felt the offer "significantly undervalued" the business.
It says it will now improve its underlying operating profits by around £1.5m a year by re-focusing on its Canadian operations and continue to divest the majority of its UK operations.
Travelzest said it had identified buyers for a number of its UK brands, which include VFB Holidays, Best of Morocco, Captivating Cuba and Peng Travel.
It is expected to retain some brands, including Travelzest Holidays, holiday.co.uk and flight.co.uk, and the company said all staff in its Cheltenham operations centre would remain.
Chairman Mark Molyneux said: "Creating value for our shareholders is of paramount importance to us. By divesting those assets that are not performing, particularly (in the current very difficult economic climate) in the UK, which contrasts with much better conditions in Canada, we are building a stronger business that is well positioned for future growth."
The group said it would derive more than 90% of its revenue and profits from its Canadian operations, itravel2000 and The Cruise Professionals, following the disposal process.
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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