(Bloomberg) -- Lastminute.com NV, one of Europe’s biggest online travel-booking platforms, is facing calls from investors to pursue a sale after some top executives were detained as part of a Swiss investigation.

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In recent weeks, Dark Horse Capital Management, Raper Capital and Sage Wealth Management have called on Lastminute to hire advisers for a strategic review. While their stakes are small, several other minority shareholders are supporting them behind the scenes and Swiss proxy advisory firm Ethos said it expects a “complete reshuffle” of the board.

The focus is on Chief Executive Officer Fabio Cannavale, an Italian serial entrepreneur and former McKinsey & Co. consultant who built up the group through a series of acquisitions. Cannavale and his chief operating officer were detained in July by Swiss authorities in a probe into alleged fraud and unlawful Covid benefit claims. The company appointed an interim CEO, who’s since come under investigation herself.

“This is a situation where you have a great horse, but no jockey,” said C.J. Martin, managing partner at Dark Horse Capital, which owns about a 1% stake. “The lack of corporate governance has turned a bad situation into a potentially catastrophic situation. However, the asset is incredibly valuable in the hands of the right owner.”

Travel Recovery

The recent investigation has overshadowed the company’s underlying business performance as the travel industry recovers from the Covid pandemic. Lastminute said in August it returned to a net profit in the first half of the year as its revenue more than tripled.

Shares of Lastminute were up 2.8% at 10:25 a.m. Tuesday in Zurich, giving the company a market value of 257 million francs ($273 million). They’re down 45% this year, while the Swiss benchmark index has declined 14%.

Lastminute would be an attractive candidate for an all-stock merger with larger Spanish rival eDreams Odigeo SA, Raper Capital founder Jeremy Raper wrote in a letter to the company’s board last month. The company could also draw interest from Expedia Group Inc., Booking Holdings Inc. or China’s Trip.com Group Ltd., Raper wrote. He controls a 0.5% stake, according to the letter.

After this year’s declines, Lastminute now trades at one of the lowest earnings multiples among its peers globally. It’s valued at about 8 times estimated profit for the 2024 financial year, compared with a median 23 times for online travel companies tracked by Bloomberg with a market value of at least $100 million.

A spokesperson for Lastminute confirmed the group has received letters “from several investors which raised a number of issues and made a series of proposals.”

“The company has initiated internal investigations across a range of issues, including those highlighted by investors, and expects to update the market and investors on Nov. 17, as far as will be legally possible within the framework of the current investigations,” Lastminute said in the statement.

eDreams CEO Dana Dunne said in a phone interview Tuesday that he wasn’t focusing on acquisitions at this time and doesn’t see Lastminute as offering something “very distinctive” to his company. A spokesperson for Booking declined to comment, while representatives for Expedia and Trip.com didn’t immediately respond to queries.

Package Holidays

The company’s minority shareholders include Sterling, the fund manager started by Swiss tycoon Tito Tettamanti, and French buyout firm Ardian SAS. Lastminute has attracted interest before, holding talks on potential transactions in 2020 with private equity firms including Triton.

Lastminute owns sites popular in the main European markets -- including Bravofly, Hotelscan, Jetcost and Rumbo -- and is a major online seller of dynamic package holidays. It’s hired a headhunter to find a permanent CEO and said last month it plans to convene a shareholder meeting before year-end to consider appointing new board members.

Sage Wealth Management Managing Director Steve Glossop said in an interview it will be tough to change investors’ views of the company and the board should consider strategic options.

Investor Distrust

“Once distrust is in, it’s there to stay,” said Glossop, whose firm and clients control about 1% of Lastminute. “The way they’ve handled this is disappointing, the lack of communication on the allegations.”

Cannavale and Andrea Bertoli, the company’s COO, can be detained until Nov. 29. Lastminute has said the investigation is targeting individuals, not the company, and that it’s fully cooperating.

A representative for the Ticino public prosecutor’s office, which is overseeing the Swiss probe, said he can’t comment about ongoing proceedings. Lastminute declared in July it’s confident of no wrongdoing and has more recently expressed “full confidence” in the interim CEO.

Vincent Kaufmann, CEO of Ethos, said his group has been calling for more independent directors at Lastminute to ensure proper oversight over management.

“The lack of checks and balances has always been an area of concern,” Kaufmann said. “This case demonstrates the importance to maintain a good independence level on the board.”

--With assistance from Zheping Huang, Clara Hernanz Lizarraga, Michael Tobin and Hugo Miller.

(Updates with eDreams CEO comments in 11th paragraph)

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