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Pardus Capital Arrives at MyTravel

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LONDON (HedgeWorld.com)–The tour company MyTravel Group PLC learned of a new passenger on Monday [July 24], when the activist hedge fund Pardus Capital Management LP disclosed a 4.02% acquisition in the company’s shares via its Pardus European Special Opportunities Master Fund LP.

New York-based Pardus, which in January elected a slate of three candidates to the board of Bally Total Fitness, did not comment on its purchase of the MyTravel equity. From the viewpoint of an activist fund, however, the tour operator may be a candidate for a trip to the auction block.

MyTravel, at one time the largest tour company in the United Kingdom, has faced bankruptcy twice in the last three years–at the end of 2003 it reported a ?? 1/2 911 million loss as its debt rose to ?? 1/2 1.3 billion, and in 2004 it completed its financial restructuring through a deal with its banks, exchanging ?? 1/2 800 million in debt for 88% of the company’s equity.

This year MyTravel has seen its stock price drop by 4.5%, though losses for the six month period ended April 30 fell by nearly ?? 1/2 50 million to ?? 1/2 70.3 million. Plans are in place to return to profitability by the end of the year, according to the company, and on July 5 it completed a deal to acquire Encore Cruises, a Canadian distributor of cruise holidays, for approximately ?? 1/2 185 million.

A MyTravel spokesman told AFX News that management was “not stunned” by the Pardus move, and that the company remains focused on its current strategy.

In the case of Bally, Pardus’s move came swiftly–the hedge fund announced that it would run board candidates only one day after disclosing its initial position in the company.

On the other hand, Pardus has appeared relatively patient with Visteon Corp., a manufacturer of electronics and heating and cooling systems for automobiles. After announcing a 7.81% stake May 1, Pardus has been evaluating the company and meeting with management, while steadily adding to its position; on July 24, it acquired 250,000 more shares to raise its stake to 12.3%.

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Contact Bob Keane with questions or comments at [email protected].