WTL Waterlogic

RNS Number:0390B
World Travel Holdings PLC
26 March 2001

For immediate release, Monday 26 March 2001



                          World Travel Holdings plc


            Proposed acquisition of Deckchair.com Holdings Limited

World Travel Holdings, the global travel technology and services group, has
today announced the acquisition of Deckchair.com Holdings, the on line
consumer travel business founded by Sir Bob Geldof.

Highlights

  * The initial consideration, to be satisfied in World Travel Holdings
    shares, loan notes and options, totals #3.2m by value

  * Deferred consideration of #6.0m may become payable based on the trading
    performance of Deckchair and the enlarged group's consumer businesses over
    three years. This will also be payable in World Travel shares at the then
    market prices.

  * Sir Bob Geldof, Etienne de Villiers and Clive Dolman of Deckchair will
    join the World Travel Holdings board. The Deckchair brand name will be
    retained and further strengthened under this deal.

  * The addition of Deckchair's 250,000 registered users to World Travel
    Holdings' 85,000 registered users is expected to accelerate planned
    profitability at World Travel Holdings.

  * Deckchair, following a major relaunch in 4 to 5 weeks, will also target
    the North American, Asian and European markets, where Sir Bob Geldof's
    reputation is expected to impact favourably with the brand's marketing

Sir Bob Geldof said: "Deckchair has been a fantastic service which has been
great at attracting people - hundreds of thousands of them. As we grow we have
to be able to offer increasingly sophisticated technological support and
delivery. World Travel Holdings have a fantastic system which will give us
everything we need.


"This deal could never have happened in the recent crazy money market. But in
a collapsing market, whole new opportunities present themselves for lean and
nimble operators like us. The logic of this deal is impeccable. The two
companies are perfectly complementary. Together, we increase the number of
customers while reducing the cost of marketing and technological servicing."


Jonathan Biles, chief executive of World Travel Holdings, said: "Sir Bob and
his team have built a terrific brand and generated an impressive user base in
a short space of time.


Deckchair will be our market leading consumer brand and we expect Sir Bob's
team to be very successful in the US, Asia and Europe as well as in the UK
with the benefits of World Travel Holdings' sophisticated technology.


We will focus our Fare 1 and NetFaresOnline brands to dominate the travel
agent market both here and in North America. The final piece of the jigsaw -
our business travel offering to corporations - will be launched shortly.


With Deckchair.com, World Travel Holdings significantly enhances its offering
and achieves the necessary critical mass to be a significant force in the
online consumer travel market."






Contacts
World Travel Holdings plc                                         020 7456 1352

Jonathan Biles, Chief Executive

John Biles, Chairman

Deckchair Holdings Limited                                        020 7959 0800

Sir Bob Geldof

Etienne de Villiers

Clive Dolman

Credit Lyonnais Securities                                        020 7588 4000

Chris Yates

Financial Dynamics                                                020 7831 3113

Nick Miles

Ben Atwell






                          World Travel Holdings plc


            Proposed acquisition of Deckchair.com Holdings Limited


Introduction


World Travel Holdings plc ("World Travel"), the global travel technology and
services business, announces that it has today entered into a conditional
agreement for the acquisition (the "Acquisition") of not less than 90 per
cent. of the issued share capital of Deckchair.com Holdings Limited
("Deckchair"). Deckchair is the holding company for a group involved in online
travel sales to consumers from its website, Deckchair.com, and offline to
business customers through Soho Travel. It also has an online destination
information website for travellers, Kasbah.com.


The initial consideration for the Acquisition is the issue and allotment to
the vendors of an aggregate of 11.624 million new ordinary shares of 1p each
in World Travel ("new World Travel Shares") and the issue to one of the
vendors of a two year #750,000 unsecured zero coupon loan note. In addition,
World Travel will issue an option to subscribe 1.6 million new World Travel
Shares at 1p each to the chief executive of Deckchair in consideration of the
cancellation of an option granted to him by Deckchair. Based on the middle
market quotation of 18.5p for a World Travel Share on 23 March 2001 (the last
dealing day prior to this announcement) this values the total initial
consideration at #3.18 million. Deferred consideration of up to a further #6.0
million may become payable if certain business targets in 2001, 2002 and 2003
are met by the Group's enlarged consumer travel business. Any deferred
consideration will be satisfied by the issue of further new World Travel
Shares (or options over such shares) valued at the then market price of a
World Travel Share. In view of the need to increase the Company's authorised
share capital to permit the issue of the new World Travel Shares, completion
of the acquisition is conditional, inter alia, upon shareholders' approval.
The acquisition is also conditional, inter alia, on the agreement of holders
of at least 90 percent. of the issued share capital of Deckchair and the
completion of certain documentary and procedural matters.


The vendors have undertaken not to dispose of any of the new World Travel
Shares they receive as part of either the initial or deferred consideration
for at least one year after their issue.




Information about Deckchair

Deckchair is the holding company for a group involved in the travel business.
It operates three business:


Deckchair.com, a consumer travel website launched in 2000, distributes
scheduled, consolidator and certain charter fares online.


Soho Travel, an established traditional corporate travel agency operating from
offices in South London.


Kasbah.com, a provider of online destination information for travellers.


Deckchair has not produced audited accounts for the years ended 31 December
1999 or 2000. Unaudited management accounts show the gross travel sales in
2000 were #4.7 million compared with #0.8 million and that the gross margin
earned on such sales was #245,000 compared with #84,000. Losses before tax for
2000 were #3.9 million compared with #1.0 million. Management accounts show
that, at 31 December 2000, Deckchair had net tangible assets of approximately
#1.38 million including #1.4 million of cash.


Background to and reasons for the Acquisition


World Travel has been developing its travel technology and services business
to target three distinct markets using separately branded channels as
explained in its AIM admission document published in September 2000. These
channels are consumer distribution, trade distribution and corporate
distribution.


At the time of publication of that document, the Directors expected that
profitability from consumer distribution (which requires a relatively high
level of fixed costs) would be built up over a longer timescale as customer
confidence in the medium grew. This business has shown encouraging growth,
particularly in repeat business, but is hampered by the ability to attract
customers to the site at an acceptable cost. This is a feature which appears
to have impacted on a number of competitors in this crowded space and led to
World Travel's acquisition of the uTravel website's registered user list in
December 2000.


Deckchair has, by low cost but highly effective promotion (largely by Sir Bob
Geldof), achieved a significantly larger registered user base and level of
bookings. Its site, however, does not have the same functionality as the
worldtraveldirect.com one or the support of a 24 hour a day, seven days a week
call centre.


The Board believes that the amalgamation of the Deckchair brand with World
Travel's technology and support will produce a business capable of faster
growth with only one supporting infrastructure. This should advance the time
at which the Group's consumer business will become profitable and give the
Group the potential to participate further in the consolidation of this
sector.


It has been part of the Group's strategy to add a London office to its
corporate travel business to improve the efficiency of distribution as well as
extend the corporate distribution business. The acquisition of the Soho Travel
business should achieve this.


Kasbah has, the Directors believe, the potential to be both an effective
marketing tool for the Group as well as a source of revenue.


The Directors believe that the business of Deckchair complements the Group's
and will enhance the speed of development for the Group as a whole.


Board appointments


The Board of World Travel has invited Sir Bob Geldof and Etienne de Villiers
to join the Board as non-executive directors and Clive Dolman, Chief Executive
of Deckchair, to join the Board as an executive director upon completion of
the acquisition.


Sir Bob Geldof, as part of his duties, will play a significant part in
marketing the Group's businesses and, in particular, the consumer website.


Etienne de Villiers worked as a senior executive for the Walt Disney group of
companies for 14 years until last year, ultimately as president and managing
director of Walt Disney International.


Sir Bob Geldof will be paid #100,000 per year for his duties for a term to 31
December 2003. Etienne de Villiers will be paid #25,000 per annum for the same
term and Clive Dolman will be paid #100,000 per annum for a six month fixed
term (which may be extended by mutual agreement).


Full details of the three proposed director's contracts and shareholdings and
of the disclosure required by paragraph 15 of the AIM Rules will be set out in
the circular described below.




Further information


A circular giving further details of the acquisition and the matters referred
to above, will be sent to shareholders and warrantholders as soon as
reasonably practicable. This circular will include notice of an extraordinary
general meeting of the company to approve the acquisition.




Contacts

World Travel Holdings plc                                         020 7456 1352

Jonathan Biles, Chief Executive

John Biles, Chairman

Deckchair Holdings Limited                                        020 7959 0800

Sir Bob Geldof

Etienne de Villiers

Clive Dolman

Credit Lyonnais Securities                                        020 7588 4000

Chris Yates

Financial Dynamics                                                020 7831 3113

Nick Miles

Ben Atwell

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