Commencement of formal sale process

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS IN THAT JURISDICTION

This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.7 of the Takeover Code. There can be no certainty that an offer will ultimately be made.

Travelzest plc

Commencement of formal sale process

Travelzest plc (AIM: TVZ), (the "Company") the online travel group, announces that the Board has received a preliminary expression of interest from Jonathan Carroll, Chief Executive Officer of the Company, and Adrian Cobbold, Chief Financial Officer, (together, the "Executive Directors") to acquire the Company and as a result the Independent Directors (being Nigel Jenkins, Mark Molyneux and Richard Hall) have decided they will conduct a formal sale process in order to explore this and any further potential expressions of interest.

While the Independent Directors believe that the Company has a future as an independent business, it recognises that there may be other individuals and businesses which are better placed to build on the Company's strong Canadian trading businesses.

The Independent Directors have therefore commenced a formal sale process in order to seek to unlock and crystallise shareholder value, through which the Company might also be able to offer more opportunities for its employees and other stakeholders.

Potential offerors for the entire issued and to be issued share capital of the Company are invited to contact HW Corporate Finance (contact details are provided below) who have been engaged to manage the formal sale process on behalf of the Company.

The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code (the "Code") such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement (subject to note 3 to Rule 2.2. of the Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a), for so long as it is participating in the formal sale process. Interested parties should note Rule 21.2 of the Code, which will prohibit any form of inducement fee or other offer-related arrangement, and that the Company has not requested any dispensation from this prohibition under Note 2 of Rule 21.2 at this stage.

The Company proposes to conduct the formal sale process in the following manner. Any interested party who approaches HW Corporate Finance will be required to enter into a non-disclosure agreement with the Company on reasonable terms satisfactory to the Independent Directors and on the same terms, in all material respects, as the other interested parties, before being permitted to participate in the process. The Company intends to release a summary financial overview shortly to all participants who have entered into such non-disclosure agreements with the Company. It is intended that any participant who is taken forward to the next phase of the formal sale process will be given access to a data room and management presentations.

The Independent Directors reserve the right to alter any aspect of the sale process as outlined above or to terminate it at any time and in such cases will make an announcement as appropriate.

The Independent Directors reserve the right to reject any approach or terminate discussions with any interested party or participant at any time. There can be no certainty that any offer will be made for the Company, or even proposed, or as to the level of any proposal or offer that may be made.

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Enquiries:

Publication on website

A copy of this announcement will be made available on the Company's website www.travelzestplc.com. For the avoidance of doubt, the content of the website referred to above is not incorporated into and does not form part of this announcement.

Merchant Securities is authorised and regulated by the Financial Services Authority. Merchant Securities is acting exclusively for Travelzest and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Travelzest for providing the protections afforded to clients of Merchant Securities, or for providing advice in connection with the matters referred to in this announcement.

HW Corporate Finance is authorised and regulated by the Financial Services Authority. HW Corporate Finance is acting exclusively for Travelzest and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Travelzest for providing the protections afforded to clients of HW Corporate Finance, or for providing advice in connection with the matters referred to in this announcement.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise. The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Rule 2.10 disclosure

In accordance with Rule 2.10 of the Code, the Company confirms that it has 145,136,110 ordinary shares of 2p each in issue and admitted to trading on the AIM market of the Stock Exchange with the ISIN GB0032849084.

Disclosure requirements of the Takeover Code (the "Code")

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.