Holidaybreak deal to trigger full sale

THE SALE of Holidaybreak’s camping division is expected to clear the way for a take-over of the company, with First Choice the most likely suitor.

In a statement to the stock market this week, the European specialist admitted it has had several expressions of interest in its camping operation, which includes Keycamp and Eurocamp.

The sale of the division, valued at £150 million, is likely to spark interest in the remainder of Holidaybreak. Its hotels and adventure travel divisions will fit well with First Choice’s specialist business.

Analyst Douglas Jack, of broker Panmure Gordon, said: “The hotel and adventure divisions are highly attractive. If a deal is agreed, it will unblock a bid for the whole group.”

A number of private equity firms are rumoured to be among those interested in the camping operation.

But former managing director Matthew Cheetham, who left the company last week, denied he is connected to any bid.

“It’s a cracking business with a very strong customer base and excellent staff. Camping has been struggling, but profit margins are still better than brands such as Thomas Cook,” he said.

However, camping is recognised as Holidaybreak’s weakest division, with profits down from £18 million in 2003 to £13 million last year.

A trading statement last week revealed camping sales are 7% down year on year. Capacity was slashed by 16% for 2006.

Holidaybreak chief financial officer Bob Baddeley admitted the group could be a takeover target.

“There has been speculation over the years,” he said. “We are a public company so are always available for sale.

“It is true that people may think there is more value in our other two divisions than in camping.”