Co-op Travel leaves high street in £55m deal
Thomas Cook takes over more than 750 retail outlets in deal that will 'better integrate stores with its online offering'
Co-op Travel will disappear from the high street after a £55.8m deal with its joint venture partner Thomas Cook.
The five-year-old chain, which was branded under the Co-operative Group umbrella but was majority controlled by Thomas Cook, has struggled under the rise of online travel sites and retail outlets have dropped from around 1,200 retail outlets to 764. It had a five-year option to exit its stake, says Sky News.
Thomas Cook paid £50m for Co-op's 30 per cent stake and a further £5.8m to buy out the 3.5 per cent interest controlled by the smaller Central England Co-operative group.
In addition, the Co-op was paid more than £30m in dividends, giving it a windfall of more than £80m which it said will be invested back into its core business.
Thomas Cook, which recently reported a decline in profits of more than 40 per cent, said the deal would enable it "to better integrate the stores with its online offering", says the Telegraph.
Boss Peter Fankhauser added it would also "help the company to focus on growing its sales of added extras", such as travel insurance.
"Equity analysts expect Thomas Cook will only take a small hit to its coffers after it announced plans to raise €750m (£632m) through a new corporate bond," says the Telegraph.