Sabre buys UK's

Deal is worth $1.1 billion

In a move aimed at creating Europe's largest online travel service company, Sabre Holdings, the operator of, is buying U.K.-based PLC for £577 million (US$1.08 billion), the company announced Thursday.

Technically, the acquisition will be made by Travelocity Europe Ltd., an indirect subsidiary of Sabre Holdings that has been established for the purpose of executing the deal, the Southlake, Texas, travel reservations system operator said. Sabre expects to close the deal by the end of July, paying £1.65 a share for the London company, it said.

The deal fits into Saber's overall strategy of extending its international reach as an e-commerce travel retailer. Saber added it was interested in, in part, for its high brand recognition, supplier relationships (currently around 13,600) and the size of its user base. currently has over 9.8 million subscribers to its weekly newsletter, Saber said.

The acquisition of will also aid Saber's negotiating position with global airline and hotel companies, creating cheaper prices which it could then pass on to customers, Saber said.

Once the U.K. poster child of the Internet e-commerce boom of the late 1990s, was launched in 1998 by Brent Hoberman and Martha Lane Fox, promoting last minute online offers for airline tickets, hotel rooms, package holidays, entertainment tickets, restaurant reservations and home delivery.

After its highly publicized and profitable initial public offering (IPO) in March 2000,'s business and stock price suffered when the Internet bubble burst later in 2000. And after the terrorist attacks in New York and Washington, D.C., in September 2001, people sharply cutting back on travel. But despite being blamed by analysts in numerous local media for undermining confidence in e-commerce companies in the U.K. and abroad, pushed on, seeking to diversify and expand its business, in part with the purchase of 14 businesses in the past three years.

Hoberman will run the combined Lastminute and Travelocity business in Europe after the takeover, Saber said. Fox left in 2003, but she and Hoberman still jointly own over 7 percent of the company's stock.

The combined business has strong positions in the U.K., France, Germany, Italy, Scandinavia and Spain, Sabre said. It added that will be the lead brand in most cases, though Travelocity will evaluate its brands country-by-country after the deal is completed.

Sabre values's business at £606 million, including the company's debt of £69 million and cash holdings of £40 million, it said.

Also on Thursday, announced its financial results for the six months ending March 31. It reported a net loss for the period of £45.5 million, or £0.01339 a share, down from a loss of £39.5 million, or £0.01332 a share in the same period last year. The company said it has never posted a net profit. Online bookings, or what calls its total transaction value, rose 57 percent to £512.1 million in the period, it said.

In a conference telephone call discussing the results,'s Chairman Brian Collie said that three companies, including Sabre, have recently expressed interest in buying and that he couldn't not rule out a counter-bid, though he believes the offer from Sabre is sound.

Copyright © 2005 IDG Communications, Inc.