At least three private equity firms have held talks with MyTravel Group about a possible agreed bid for the business in the region of £750m.
3i, Permira and CVC Capital Partners have held preliminary talks with managers of the business, formerly known as Airtours, following a succession of profit warnings and an announcement last week that accounting irregularities might result in £50m black hole in the company’s accounts.
MyTravel has seen its share price fall from a high of 500 pence to less than 20 pence on Friday. The company’s market capitalisation fell by £300 in just two days last week, leaving the firm with a stock valuation of £89m, compared with its value of £1.5bn earlier this year.
The company is also considering a number of disposals. MyTravel brands include Airtours Holidays, Cresta Holidays, Jetset, Bridge Travel and long-haul business Tradewinds.
The Observer newspaper reported that there was scepticism over the firm's ability to raise £480m it needs to keep itself going for the next two years. Other reports suggest that MyTravel now has liabilities of £1.5bn, and may soon lose business worth £50m as customers rush to cancel no-deposit bookings.
MyTravel would be keen to wrap up a deal quickly in order to retain consumer confidence, although given the company’s ongoing accountancy difficulties, it may be difficult to organise financing for the transaction.