Lastminute.com buys into France, but analysts want more

Lastminute.com needs to make more acquisitions like the Dégriftour Group if it is to become a European ecommerce leader.

That is the view of industry analysts who applaud the deal, which has cost the online travel site £59m, but warn that more of the same strategy is needed.

Olivier Beauvillain, associate analyst at Jupiter Communications said: "It is near impossible for Lastminute.com to grow quickly in the market it is in organically. It must make a similar acquisition in Germany if it is to be regarded as a truly pan-European."

Alexander Drobik, VP of ebusiness at Gartner Group EMEA explained: "This purchase is still small beer compared to the global dot-com market. If Lastminute.com wants to be more than a local player, this should be the first part of an aggressive acquisition strategy from Lastminute."

The comments were made as the London Stock Exchange (LSE) remained unimpressed Monday by news of Lastminute.com's £59m buyout of French 'last minute' retailer Dégriftour Group. Lastminute.com's share price remained static all day.

However, Martha Lane-Fox, co-founder of Lastminute.com, told silicon.com it was not planning any more acquisitions. She said: "There is no-one else out there with the kind of synergies that Lastminute.com has with Dégriftour, and there really is no clear competitor in our space. We are not planning any more purchases."

She added Lastminute.com had seen very rapid organic growth in Germany and would continue to roll out across Europe with sites opening in Italy and Spain within months.

Lastminute.com paid for family-owned Dégriftour with £27.1m in cash and 19.7 million shares - each worth 161p on the LSE yesterday. The online travel company claims the deal with Dégriftour, France's number one ecommerce brand, will make it the largest European-based ecommerce company.

Dégriftour sells package holidays over the web and on France's Minitel system. It was founded in 1991 and turned in a profit last year of £9.1m on revenues of £50.3m. Lastminute.com made a loss of £26m in the nine months to June.