If Kerry-based financial payments player Fexco emerges successful in its bid for the loss-making business-to-consumer division of CNG Travel, it is likely to delist the company from the London-based Alternative Investments Market (AIM), industry sources say. Fexco has refused to comment on the matter.
It emerged this week Fexco is in advanced discussions to acquire CNG Travel. It is understood due diligence is being performed on CNG’s Places To Stay online unit although a deal may not be finalised until next month.
Sources say it is unlikely CNG and former CEO Finbarr Power is involved in Fexco’s bid for the company.
Power led the company to a flotation on the AIM in London last year. However, the company has since been dogged by poor financial performance and last week an earnings warning caused the company’s share price to fall 15pc. The company last December made a loss of €5.6m on a turnover of US$55.5m. At an AGM in June Power resigned as CEO of the company.
Towards the end of July CNG confirmed an offer has been made to acquire the company. However, it said it is treating the approach tentatively because of its preliminary nature and warned there can be no certainty that an offer will ultimately be forthcoming.
CNG is understood to have received approaches from four different bidders for its Places To Stay business. It is understood some 54 jobs at CNG’s Kerry operations currently hang in the balance and form a vital element in the discussions.
One of the four bidders is believed to be US business services firm Cendant. The sale of the travel reservation site has also attracted interest from industry players in the Far East, where dotcom stocks are soaring. Yahoo’s US$1bn tie-up with Chinese online auctioneer Alibaba.com and the US initial public offering of search engine Baidu.com has started a mini-tech bubble among Chinese web companies.
Industry insiders say if Fexco emerges successful in its bid to acquire CNG, it is likely the acquisition could take the same pattern as Fexco’s acquisition Prudential investment Company of Australia (PICA) and could see CNG delist if Fexco emerges successful. PICA delisted once Fexco’s acquisition of the firm was completed. PICA is Australia’s largest residential property management company and has more than 75,000 property units currently under management.
Both Fexco and CNG declined to comment when contacted by siliconrepublic.com.
By John Kennedy