BBC Worldwide announced on Tuesday the sale of Lonely Planet, its travel guide business, for $75 million. The American company, NC2 Media, is the buyer.
With the sale, BBC would lose almost £80 million since it purchased 75 per cent of Lonely Planet in 2007 for £88.1 million and acquired the remaining 25 per cent in 2011 for £42.17 million. It bought the travel guide from co-founders Maureen and Tony Wheeler and Time Out founder Tony Elliott.
BBC Worldwide would actually get $75 million for Lonely Planet. It would initially receive $60 million on completion of the sale and another $15 million after 12 months.
The media company, that was criticised for the purchase of the travel guide despite its very limited existing interest, decided to sell Lonely Planet which was affected by the global recession since 80 per cent of the travel guide's income are in foreign currency.
Lonely Planet started in the Wheelers' Melbourne kitchen table in 1973 and initially covered Asian countries. In the 1990s it expanded to cover Europe and America. The guide currently has about 500 titles in 11 languages.
Over the last six years, BBC has written down the value of Lonely Planet by £67 million to £63 million.
With the expensive lesson learned, Diane Coyle, vice chairman of Trust and chair or the Strategic Approvals Committee, said the focus of the Trust would now be BBC programme content and BBC Worldwide would no longer make a similar purchase in the future.
"Although this did not prove to be a good commercial investment, Worldwide is a very successful business, and at the time of purchase there was a credible rationale for this deal," BBC quoted s Coyle.
Because of the significant loss to Worldwide of the Lonely Planet buy-in, the Trust asked the BBC Executive to review the lessons learned and report its findings to Trust.
BBC opted to sell the business to NC2 because of its belief that the new owners would bring greater focus and capital to Lonely Planet.
"The challenge and promise before us is to marry the world's greatest travel information and guidebook company with the limitless potential of 21st century digital technology," NC2 Media Executive Director Daniel Houghton was quoted by Guardian.
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