Travel cash giant in £1bn sale

TRAVELEX, the world's biggest foreign exchange company, is up for sale with a £1 billion-plus price tag. Deutsche Bank has been appointed to handle the sale of the company, which is is owned and controlled by outspoken anti-euro campaigner Lloyd Dorfman, after several private equity firms made approaches during the summer.

Potential bidders could include CVC Capital Partners and Permira, which together bought the AA from Centrica in July for £1.75 billion.

Neither Dorfman, who owns 63 per cent of the business, nor minority shareholder 3i is committed to a sale, but both are prepared to agree a deal at the right price.

Sources say that if Dorfman cannot dispose of the whole company, he might decide to cash in at least part of his holding by selling a stake to a new partner. A flotation is thought unlikely.

The disclosure that Dorfman has finally opened the door to potential buyers follows several years of speculation surrounding the future of the company, which sponsored last year's Rugby World Cup in Australia.

As recently as September, he was again rejecting suggestions that he was about to float the company or put it up for sale when the board was strengthened with the appointment of Sir John Stevens, the outgoing Metropolitan Police Commissioner. But the private equity industry is awash with cash and eager to invest while debt remains cheap.

{1} Dorfman, 52, (pictured) who spent his school holidays working behind the family's foreign exchange counter in the King's Road, Chelsea, has transformed what was once a one-man operation into an empire with huge growth potential in the rapidly expanding corporate market.

Travelex reported profits of £53.4 million on turnover of £465.5 million in 2003.

Though best-known for its High Street presence, which it transformed with the acquisition of Thomas Cook's financial services business for £440 million in 2000, bureau de change operations contribute just 20 per cent of the profits.

The bulk of revenues now comes from providing foreign exchange dealing, payment, collection and risk management to 16,000 companies and financial institutions.

Travelex has also raised the profile of its brand through major sponsorship deals, including subsidised tickets to the Royal National Theatre and the Royal Opera House.

Dorfman has also raised his personal profile by becoming an outspoken member of the Business for Sterling lobby group, which campaigns against Britain joining the euro.

Dorfman started on his own in 1976 from humble beginnings in a single office in Southampton Row, central London.

Having persuaded a family friend to lend him £25,000, he was able to expand the business when in 1979, he spotted an opening for a bureau de change at a service station on the M2 in Kent, designed to cater for holidaymakers driving to the Channel ports.

But the turning point came in 1986 when he managed to convince BAA to allow him to open an outlet at Heathrow - a move that convinced Dorfman he could repeat the model in other airports.

It was soon after that that private equity group 3i became involved with Travelex by investing £24 million in 1999 for a 33 per cent stake.

If Travelex is now sold for its estimated value, that stake would be worth about £300 million.