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Companies sold for £76m
From the Financial Times of Tue, 16 Dec 2014 18:45:45 GMT, the UK travel website that was an icon of the dotcom boom and bust, has been sold by its owners for $120m (£76m) — a small fraction of the £600m price they paid for it back in 2005.

Sabre Holdings, a Texas-based travel technology group that was spun off from American Airlines, said on Tuesday that it sold Lastminute to Bravofly Rumbo Group, an online travel company listed on the Swiss stock exchange.

Companies are struggling to get an edge in the increasingly competitive market for online flight bookings, which was worth nearly $400bn in 2014, according to Euromonitor.

Analysts say Lastminute, founded in 1998, has failed to keep pace in the face of the rise of mobile apps and intelligent “machine learning” techniques that have helped competitors such as Skyscanner, Kayak and Momondo steal market share.

It made an operating profit of £5.6m in 2013, according to Companies House.

Other bidders for Lastminute included Priceline, Expedia, Orbitz, Ctrip, eDreams and Oakley Capital, according to people close to the deal.

“Mobile is the perfect tool for doing things at the last minute and doing things at the right time and place,” said Brent Hoberman, one of Lastminute’s co-founders, who sold his stake in 2005.

“Combined with the incredible growth of the internet and the lower cost of technology, it’s now much easier to get more and better deals based on people’s past behaviour, state of mind and location.”

Shares in both Bravofly and Spanish-quoted rival eDreams are trading down around 90 per cent from the prices at which they went public earlier in the year. Bravofly aims to use the Lastminute acquisition to help beef up its business in the UK, France, Germany, Spain and Italy.

Lastminute floated as a highly valued but lossmaking company on the London Stock Exchange in 2000 but its share price collapsed later that year during the dotcom bust.

Sabre said the combined Bravofly-Lastminute entity would have annual revenues of over €260m. Consensus estimates of €140m for Bravofly’s full-year sales indicate that Lastminute’s revenues stood at less than £100m. Sabre was advised by Houlihan Lokey, an international advisory-focused investment bank.

Since acquiring Lastminute, Sabre, which is owned by private equity houses Silver Lake and TPG Capital, has been shedding its consumer travel assets in order to trim losses.

Alumni from Lastminute have gone on to launch other digital leisure businesses, including Secret Escapes, Wahanda, Voyage Privé and Qype, which was sold to Yahoo in 2012.

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