Saga on brink of break-up as tour arm goes on sale

OVER-50s firm Saga has begun to break itself up after coming under pressure from the aggressive American hedge fund run by billionaire Wall Street financier Paul Singer.

City sources said the listed insurance and travel group has decided to try to sell its Titan Travel arm, which carries out escorted tours to 70 countries across the world.

Saga has appointed advisers from Duff & Phelps to carry out the sale and information packs are likely to be sent to potential buyers in the next few weeks.

It is believed that Titan Travel, which also sells river and ocean cruises to the older generation, could be worth between £100million and £150million. That would represent between 20 per cent and 25 per cent of Saga’s total stock market value of £450million.

Potential purchasers include Riviera Travel, Travelopia and private equity firms, such as ECI Partners and Graphite Capital. The plan to sell Titan Travel comes just a few weeks after Saga’s new chief executive, Euan Sutherland, took the helm of the business. Sutherland, the former boss of Superdry, is in a hurry to rejuvenate Saga as its shares are currently flirting with an all-time low.

In July last year, American activist investor Elliott Management – which is run by the billionaire financier Paul Singer and his son Gordon – bought a 5 per cent stake in Saga.

The move triggered speculation that Saga could come under duress from Elliott to break itself up or sell the whole group to boost its shares, which on Friday closed at 44.6p.

Elliott’s investment in Saga has stoked rumours it could be a takeover target for a private equity firm. Saga was previously owned by Charterhouse Capital Partners, Permira and CVC Capital Partners before it floated on the London market in 2014.

The company was originally founded by Sidney de Haan in 1959 and then passed to his son Roger in 1984 after he retired.

Saga later merged with the roadside rescue recovery company The AA, leaving it with three private equity owners – Charterhouse, Permira and CVC Capital Partners.

Eventually, Saga and The AA demerged before they both floated on the London market. Neither has performed well.

Titan Travel is not the only business being sold by Saga as part of the break-up process.

Reports suggested Saga – based in Folkestone, Kent – has hired Grant Thornton to sell its live-in care brands Patricia White’s and Country Cousins.

Saga declined to comment.