Travelsphere takes Saga's crown in over 50s holidays

Saga lost its crown as the country's biggest holiday provider for the over-50s yesterday after its rival Travelsphere acquired Page & Moy for about £30m.

Saga lost its crown as the country's biggest holiday provider for the over-50s yesterday after its rival Travelsphere acquired Page & Moy for about £30m.

For Travelsphere's two founders, Richard Mackay and Mike Edwards, the deal reunites them with the company they left 27 years ago. It creates a group with revenues of £175m and 4 million customers.

HgCapital, the private equity group that owns 40 per cent of Travelsphere, hopes to mimic the success Saga has had in cross-selling financial services to its customers. Saga was sold two months ago for £1.35bn.

Jeremy Sharman, a director at HgCapital, which tried to buy Saga, said: "Now we have a travel business that's bigger than Saga, the obvious thing is to look at launching financial product such as insurance." He said floating the enlarged group was "certainly" on the agenda in the next 12 to 24 months.

Page & Moy, which was founded 42 years ago to provide Grand Prix holidays for motor racing fans, is controlled by its management team, who share a 54 per cent stake. 3i, the private equity house that led a management buyout in January 2001, owns 36 per cent, while the remaining 10 per cent is held by another outside investor.

Mark Watts, Travelsphere's managing director who will run the combined group, said the two holiday companies would be run as separate businesses. Both are based in Leicestershire. Mr Watts said: "The brands will prosper by having their two separate identities."

The group is chaired by Harry Coe, who used to run MyTravel (or Airtours as it was known then). It offers guided holidays to places as far apart as Wales and the Great Wall of China. Richard Bishop, a 3i director, said the venture capitalists made a return of five times their original £1.6m investment.