Lastminute demand probe into fax find

Online travel firm lastminute.com will today ask the City watchdog to probe an anonymous fax that questioned its financial health.

Lastminute shares fell 7% in the middle of last week after the fax claimed the company could need a big fundraising to overcome falling margins and cash reserves.

These allegations have been dismissed by lastminute which believes the fax - headlined “Running on Empty” – was circulated by traders who had misjudged recent trading.

It reckoned short sellers – investors who sell shares in a firm in the hope of buying them back later at a lower price – had targeted the company after quarterly results beat consensus expectations in the market.

Earlier this month, lastminute reported strong growth in bookings during the final three months of 2004, but also revealed that losses had widened from a year ago.

A lastminute spokeswoman said the UK's Financial Services Authority (FSA) will be asked to investigate the fax because it created a false market in its shares, which have since stabilised.

Heavier losses in its most recent quarter were not unexpected as the company made five acquisitions in 2004 and now generated more of its profits at other times of the year, she said.

Lastminute provides travel and leisure offers directly in 13 European countries and also has two international joint ventures. It currently employs around 2,400 people.