Kuoni makes offer for Et-china
The Kuoni Group announced today that the boards of Kuoni Travel Holding Ltd. (‘Kuoni Group” or ‘Kuoni”) and Et-china.com International Holdings Limited (‘Et-china” or ‘Company”), an AIM (Alternative Investment Market) listed company at the London Stock Exchange, have reached agreement on the terms of a recommended cash offer. This proposal is to be made by Kuoni, for all the issued and to be issued shares in Et-china not already owned by the Kuoni Group. Kuoni already owns just under 33 per cent in Et-china following the acquisition of an equity holding in the Company in 2009. The cash offer of CHF 1.95 (GBp 115) per share, values Et-china’s fully diluted share capital at CHF 95 million1 (GBP 56 million). This proposed takeover is a major strategic step forward in the international development of Kuoni and for its long-term partnership with one of China’s leading travel corporations.
Et-china is domiciled in Guangzhou and specialises together with its subsidiary GZL (Guangzhou Travel Service) in group inclusive-tour arrangements both within China and to destinations abroad. Additionally, the Company focuses on the online sale of airline tickets, hotel rooms and rental car arrangements to both corporate clients and individual travellers in China. Et-china primarily operates through its 160 retail outlets, its call centre and the well-known internet portal and possesses a very strong customer base. Through a joint-venture, Et-china also provides the e-ticketing service and back office support for China Southern Airlines. For the financial year 2009, Et-china reported a total turnover of CHF 303 million
(RMB 1 909 million) and gross profit of CHF 34 million2 (RMB 211 million). The Company currently has about 1 600 employees.
Kuoni already owns an equity holding of just under 33 per cent in Et-china since 2009 and is proposing to acquire the rest of the issued and to be issued shares in the Company. The cash offer of CHF 1.951 (GBp 115) per share, values Et-china’s entire fully diluted share capital at CHF 95 million1 (GBP 56 million). The overall acquisition price paid by Kuoni including the price paid for the stake it already owns, amounts to CHF 82 million (GBP 49 million).
The present Et-china management and employees will complement the Kuoni team and continue to build an exciting business in the rapidly developing Chinese tourism and travel market. Et-china will be integrated into the Division Southern Market Region within the Kuoni Group. Matthew Ng, CEO of Et-china, will report directly to Stefan Leser, Executive Vice-President Southern Region for the Kuoni Group.
The combination of Kuoni’s Asia-Pacific business with Et-china has significant strategic potential in terms of geographic footprint given Et-china’s strong market position and customer base in Southern China, local business knowledge and online platform as well as the Kuoni Group’s long-term travel expertise and global customer reach.
‘In acquiring our equity holding in Et-china in 2009, we began writing a new chapter in Kuoni’s corporate history and took our first step into this key market of tomorrow,” says Peter Rothwell, CEO of the Kuoni Group. ‘We are convinced that our activities in one of the fastest growing travel and tourism regions have vast potential; and we are equally convinced that Et-china can make a substantial contribution to the further development of the Kuoni Group and in our positioning as a key player in China. That’s why this proposed acquisition is a major strategic step forward in the international development of our company and for this long-term partnership with one of China’s leading travel corporations.”
Kuoni will finance the transaction from existing cash resources. The Kuoni Group has secured irrevocable undertakings to support the offer from 31.5 per cent of Et-china’s shareholders. The transaction is subject to the satisfaction of customary closing conditions and is expected to close in the third quarter of 2010.
For more information please refer to the official offer announcement which was also released to the London Stock Exchange. The scheme document, which will include all the terms and conditions of the offer, will be posted to Et-china shareholders, option-holders and convertible bond-holders as soon as practicable.