Co-op indicates no early decision on Cook tie-up

Co-op indicates no early decision on Cook tie-up

Agents awaiting a decision on the future of the Thomas Cook Co-operative Travel retail joint venture may have to wait until the beginning of next year, it has been confirmed.

The five-year deal struck by former Cook chief executive Manny Fontenla-Novoa ends on September 30.

The Co-operative Group is widely expected to exercise a clause to sell its 30% stake to Cook – a decision that would hand Cook full control of 230 Co-operative Travel agencies and give it two years to phase out the brand.

Former Co-op Travel head Mike Greenacre negotiated the deal in 2010, allowing the Manchester-based mutual to exit travel while Cook ran the stores under licence.

According to the Co-op’s 2015 annual report, Cook will pay it at least £82 million, including £32 million in outstanding dividends and £50 million or more for the 30% stake.

The report states that as of September 2016, “any amounts still outstanding under the £37 million minimum dividend guarantee become payable”.

It adds: “Having only received a £5 million dividend to date, we have recognised a receivable of £32 million reflecting the remaining amount payable under this guarantee.

“The agreement also gives us the option from September 2016 to sell our 30% stake for a minimum of £50 million.”

The Central England Co‑operative is also in line for a payout as it owns a 3.5% stake.

Co-op Travel is free to make a decision from September 30, but a spokesman said it was more likely to be made towards the end of this year or even early 2017.

Cook would not comment other than to say it had financial provisions in place should Co-op Travel decide to end the joint venture.


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