LONDON - Lastminute.com, the British online discount travel agency and icon of the former Internet boom, agreed Thursday to be bought by US travel group Sabre Holdings in a cash deal worth 577 million pounds (843 million euros, 1.075 billion dollars).
"The boards of Sabre and Lastminute.com announce that they have reached agreement on the terms of a recommended cash acquisition... at a price of 165 pence in cash per Lastminute.com share," said a statement by Sabre, the world's third biggest online travel agency and operator of Travelocity.com.
Including Lastminute.com's debt of 69 million pounds and cash of 40 million pounds, the transaction valued the business at 606 million.
Founded by Martha Lane Fox and Brent Hoberman in 1998, Lastminute.com was floated at the height of the dot.com boom in March 2000 at an offer price of 380 pence per share. It went on to reach as high as 555 pence before plunging to 17 pence as the technology bubble burst.
Barclays Stockbrokers analyst Henk Potts said the market would unlikely mourn the swallowing up of Lastminute.com.
"When it first floated it had the turnover of a couple of British pubs but was valued at more than (British newspaper and book retailer) WH Smith. That just showed how far market valuations had got out of kilter," he added.
"But it's now not the dynamic industry it once was. At first Lastminute stole a march but the big airlines and hotels have their own websites and it's no longer a unique operating environment for them."
Hoberman, who will make almost 27 million pounds from the sale of his 4.6-percent stake, said Thursday that he could not rule out a counter-offer.
"The door is still open if anyone else wants to bid," he told reporters.
Sabre said its acquisition, which it hoped to be completed before the end of July, would be made by its subsidiary Travelocity Europe.
In late afternoon London dealing Thursday, Lastminute.com saw its share price jump 8.99 percent to 166.75 pence, while the capital's FTSE 100 index of leading shares rose 0.60 percent to 4,894.30 points.
Lastminute.com's share price had rocketed by nearly 50 percent on Wednesday after the group first revealed it had received a takeover approach from an unnamed bidder.
Sabre said its acquisition price represented a 47-percent premium over Lastminute.com's average share price for the 30 days to May 10.
"We're extremely pleased with the prospect of having Lastminute.com, with its highly-regarded brand and well-established customer base, as a part of our Travelocity division," Sabre Holdings chairman Sam Gilliland said in the statement.
Travelocity chief executive Michelle Peluso claimed the acquisition would create the leading position in European online travel.
"Together we would have strong positions in the UK, France, Germany, Italy, Scandinavia and Spain. Lastminute.com's diverse mix of flights, holidays, hotels, car hire, and non-travel, ties closely with Travelocity's strategy of continuing to expand our range of offerings to consumers, beyond basic air travel," Peluso added.
The agreement with Sabre was announced as Lastminute said it achieved underlying earnings of 100,000 pounds in the six months to March 31 -- the first time it had been in the black in the seasonally weaker half-year period. Hoberman would be at the helm of the new combined business, which Sabre said would feature Lastminute as its "lead brand" in Europe.
Reports have suggested that Interactive Corp which owns Expedia, the largest player in the on-line travel market, could make a counter-bid.
Cendant, the other major sector player which last year purchased e-bookers and US travel website Orbitz, was another potential interested party, analysts said.
Lastminute.com provides travel and leisure offers in 13 European countries and also has two international joint ventures. It employs more than 2,000 people.
05/12/2005 14:39 GMT