Protracted takeover talks between Travelzest by Canadian travel firm Red Label Vacations have been terminated.

Red Label failed to match the value of the UK operating group following a preliminary approach in September.

Travelzest will now concentrate on its Canadian operations and divest of all of its under-performing UK assets.

This follows the write down the value of these assets in the financial year ended October 31st 2010.

Following this divestment programme, the group will derive in excess of 90 per cent of its revenue and profits from its Canadian operations, itravel2000 and The Cruise Professionals.

The Company will retain a UK base in Cheltenham which will act as an integrated operational centre for the Canadian brands, plus certain developing UK brands such as holiday.co.uk, flight.co.uk and upper market brand Travelzest Holidays.

These measures are expected significantly to improve underlying operating profits for the business by approximately £1.5 million per annum and it is anticipated that all staff currently employed in the Cheltenham operational centre will remain. 

Mark Molyneux, Travelzest’s chairman, commented: “Following the termination of discussions with Red Label we will now focus all our efforts on generating profitable growth in order to maximise shareholder value.

“The key growth area for the Company remains Canada and we will concentrate the Company’s efforts in this market.”