Tour firms link in Saga war

SAGA, the holiday and financial services group, today faces a major new competitor in the battle for the grey pound.

Travelsphere, tour operator for the over-45s, has snapped up arch rival Page & Moy in a deal which sees it leapfrog Saga's number of customers, the Evening Standard has learned.

The deal, believed to value Page & Moy at about £40m, will create a major new force in so-called 'escorted travel', where holidaymakers have guides taking them to far-flung destinations.

It also sees venture capitalist Hg bouncing back from its defeat in the hard-fought auction for Saga, which was eventually won in early autumn for £1.3bn by private equity group Charterhouse.

Hg will seek to build on the Travelsphere-Page & Moy spin-off products, particularly in financial services.

The bulk of Saga's valuation arose from its successful cross-selling of insurance and other products to its three million-strong database.

Travelsphere-Page & Moy, which retain their brand names, claim to have 4m customers between them.

The combined operation will be run by Travelsphere boss Mark Watts.

Page & Moy was founded 40 years ago to take motor racing enthusiasts to Grands Prix and other events around the world.

It has changed hands several times since then, most recently when venture capitalist 3i led a management buyout in January 2001. 3i today sells its entire 30% stake.

As well as selling financial products to its customers, the new management is expected to sharpen Page & Moy's marketing focus by adopting Travelsphere's direct mailshoting approach.

When Page & Moy's £70m of annual sales are added to those of Travelsphere, the combined group will have revenues of £175m.