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Travelocity's parent company, Sabre Holdings Corp. is purchasing British rival company Lastminute.com for about 577 million pounds ($1.1 billion).

"We're extremely pleased with the prospect of having Lastminute.com, with its highly-regarded brand and well-established customer base, as a part of our Travelocity division," said Sabre Holdings chairman Sam Gilliland.

Sabre's Travelocity Europe is paying 1.65 pounds ($3.08) a share for Lastminute.com. The combination of these two companies will create Europe's largest online travel retailer. Jonathan Loades Carter & Lina Saigol at Business Standard write:

Although Lastminute's board did not rule out the possibility of another bidder stepping in, they recommended Sabre's offer, which values Lastminute at 577 million ($1.1 billion) or 606 million including gross debt, to shareholders who will vote on the deal next month.

Among those set to gain from Thursday's deal will be co-founders Brent Hoberman, chief executive, and Martha Lane Fox. Hoberman will receive just over 26 million for his 4.6 per cent stake, while Lane Fox's 2.7 per cent holding is worth about 13.5 million.

Lastminute.com's CEO, Brent Hoberman who was also a co-founder will keep his position at the new combined company. Hoberman and Lastminute.com's other co-founder Martha Lane Fox, will get about 40 million pounds ($75 million) out of the deal.

Lastminute.com shares went up 12% today in London. According to Bloomberg News, they were at 167 pence at 1:33 p.m. local time, boosting the company's market value to about 570 million pounds. The company's stock has increased by 58% over the last two days.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.