UPDATE 2-TUI launches sale of Travelopia arm

Wed Sep 21, 2016 12:18pm EDT
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* TUI to sell specialist brands for 500-600 mln eur-sources

* Expects valuation of 10-12 times core earnings - sources (Adds confirmation from TUI)

By Arno Schuetze and Victoria Bryan

FRANKFURT, Sept 21 (Reuters) - Europe's biggest tour operator TUI has picked advisers to launch the sale of specialist holiday arm Travelopia in a deal potentially worth 500-600 million euros ($557-$669 million).

TUI has asked Citigroup to find a buyer for Travelopia, which comprises over 50 brands offering specialist luxury, adventure and education holidays, people close to the matter told Reuters.

TUI confirmed the mandate, while Citi declined to comment.

The auction, in which the business will be marketed to private equity groups as well as some other specialist travel groups, is set to start in the coming weeks, the people added.

TUI previously said it planned to start marketing Travelopia in the autumn and the unit's head was quoted last week by Travel Weekly as saying he hoped to close a deal in early 2017. The unit has annual revenue of 1.5 billion euros and earnings before interest, tax and amortisation of 48 million euros.

TUI is expected to ask for bids valuing the business at 10-12 times forecast core earnings of about 50 million euros, the people said.   Continued...