Co-op to land £82m after exiting travel business

THE Manchester-based Co-op is set to receive an £82m plus interest windfall after deciding to exit its joint travel agency joint venture with Thomas Cook Group.

The Co-op joined forces with Thomas Cook in 2011, which has operated the UK outlets of both businesses.

Under their agreement a payment schedule the Co-op will receive £50m and a guaranteed minimum dvidend of £31.9m with £20m due on January 3 2017 and the remainder on April 3 2017. Interest will be paid on both instalments.

Rod Bulmer, chief executive of consumer services at the Co-op said:  “We have enjoyed a successful partnership with Thomas Cook through the joint venture.

“Going forward, having a minority stake in a travel business does not fit with the strategy of the Co-op.

“The financial arrangements for exit that were put in place as part of the original JV agreement represent the best value for our members. The payments we receive from the exit will be used to invest in our core business areas.”

Thomas Cook Group chief executive Peter Fankhauser said: “Our relationship with the Co-op has given us a strong presence on the high street and fantastic colleagues across the UK, both of which are so important in attracting and inspiring our customers.

“This purchase gives us full control over our retail store network, enabling us to better integrate our stores with our online offering, while also helping us to focus on growing sales of added extras such as holiday-related financial services.

“Over the next two years, we will bring all of our UK stores under the Thomas Cook banner so we can make full use of the best brand in travel.”

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