Three Manchester University graduates who founded travel search website Skyscanner are set for a windfall of up to £400m after the firm was bought by Chinese tourism group Ctrip.com for £1.4bn.

Dozens of staff who own much smaller stakes in the Edinburgh-based firm are also in line to make thousands of pounds each if they decide to sell their shares.

Skyscanner’s chief executive, Gareth Willams, 47, said the firm remained “very much a British company” and that none of its 500 UK-based staff would lose their jobs.

But the sale will raise concerns about foreign takeovers, coming just a day after the chancellor, Philip Hammond, promised to stem the flow of British firms being sold to foreign investors before reaching their full potential.

Williams came up with the idea for Skyscanner in 2001 while working as a computer programmer when he grew frustrated at comparing flight prices for a ski holiday.



Fifteen years on, he and co-founders Barry Smith and Bonamy Grimes stand to pocket hundreds of millions of pounds in cash and stock by selling their shares to Ctrip.

A Skyscanner spokesperson refused to confirm the exact value of the stakes that the co-founders had agreed to sell, but documents filed at Companies House show that they and family members own nearly 30% of the firm between them, suggesting a combined windfall of about £400m on paper.

Sources familiar with the deal said the exact figure could vary because some of the payment would be in Ctrip shares that can rise or fall in value, while some is contingent on performance.

Skyscanner, which provides price comparison data on hotels, flight and car hire for 60 million customers, has been rumoured to be considering a stock market float for several years.

But executives from the firm have also been in touch with Ctrip for several years and the Chinese firm is understood to have suggested a takeover earlier this year.

The deal was announced less than 24 hours after Hammond used his first autumn statement to lament the trend of British technology champions selling out to foreign predators.

Hammond announced £400m of funding for startups to combat the “long-standing problem of our fastest growing technology firms being snapped up by bigger companies, rather than growing to scale”.

Anxiety about takeovers from abroad has been fuelled by the £24bn takeover of semiconductor firm ARM Holdings earlier this year by Japan’s Softbank.

Other controversial foreign takeovers in recent years include the £12bn sale of Cadbury’s to US snacks firm Kraft in 2010 and the sales of department store House of Fraser and toy emporium Hamley’s to Chinese investors.

Williams said: “We’re very much still a UK company. Skyscanner was born in Edinburgh and we remain completely committed to our offices here.



“We’re operationally independent; we’ve simply gained access to fantastic insights and technologies from a world leading online travel agency, which will make this proudly British company even stronger and even more successful.”

Williams added that Ctrip’s size and technological prowess would help expand the company, which pulled in revenues of £120m and made a profit of £17.5m last year.

Nick Thomas, partner at investment firm and Skyscanner shareholder Baillie Gifford, said: “We would have been happy to support Skyscanner’s further growth as an independent company, but we are reassured that it has been acquired by Ctrip, a business with a strong reputation, in which we already invest for our clients.”

Skyscanner was valued at £1.2bn during a £30m fundraising effort earlier this year but the £1.4bn deal price paid by Ctrip values it at 80 times its annual profit.

While Williams and his co-founders will sell their shares, the deal hinged on the blessing of the largest investor, venture capital firm Scottish Equity Partners.



SEP will sell its one-third stake for more than £465m, having already sold a tranche of shares earlier this year to make room for new investors.

The sale will crystallise a huge return on the £9m that the company invested in Skyscanner in 2007.

Skyscanner’s current management team will continue to be in charge of its operations independently after the close of the deal which is expected to be completed by the end of 2016



Nasdaq-listed Ctrip, partly owned by the Chinese search company Baidu, provides online booking for airline and railway tickets as well as hotels and describes itself as China’s largest travel company. It generated more than 350bn yuan (£41bn) of online sales in 2015, according to the company website.

The Chinese firm will pay for most of the deal in cash, with the rest in Ctrip shares and loan notes. Ctrip’s co-founder and executive chairman Liang Jianzhang said: “This acquisition will strengthen long-term growth drivers for both companies. Skyscanner will complement our positioning at a global scale.”

The deal, already approved by boards of both firms, is still subject to customary closing conditions.