Airtours' bid for Owners escapes MMC reference
Thursday 25 February 1993
Michael Heseltine, President of the Board of Trade, yesterday overruled Sir Bryan's advice. He said the competition issues were insufficient to justify a reference to the MMC.
The decision met with sharp responses from the Consumers' Association and Nigel Griffiths, Labour MP for Edinburgh South and shadow consumer affairs spokesman. Stephen Locke, director of policy at the Consumers' Association, said: 'It's baffling. Given the range of concerns that have been raised, there is an overwhelming case for referral.' The main concern was that Airtours, with Owners, would control more than 25 per cent of the package holiday market.
Mr Griffiths is also calling for an inquiry into any possible 'behind-the scenes activities in the DTI' in clearing the bid, and into the role of Neil Hamilton, Minister for Corporate Affairs and MP for Tatton, the constituency where David Crossland, chairman of Airtours, lives.
'There must be an investigation into the role of the minister, and what part he played during December, January and the first week of February,' he said yesterday. On 15 February Mr Hamilton stood aside from any decision taken on the bid. A DTI spokesman added: 'There was not any conflict of interest. He stood aside to avoid any misunderstanding.'
Government clearance for the merger between the second and third-largest holiday companies fuelled speculation in the City of a higher offer from Airtours.
There was also speculation that the German controllers of Thomas Cook, the travel agency that wants to forge a link with Owners, might make a counter- offer. Thomas Cook declined to comment. Owners' shares climbed by 13p to 129p compared with the 113p value placed on them by Airtours' three-for- eight share swap terms.
Howard Klein, chairman of Owners, which sells holidays under several brands, including Sovereign, Falcon and Tjareborg, said: 'Now that the element of uncertainty has been removed, the debate can focus on the fundamental value of Owners.
'While Airtours has stated that it recognises Owners has considerable potential, Airtours has still not put forward any strategy for a combined group and its offers grossly undervalue the company.'
David Crossland, chairman of Airtours, said: 'We remain firmly of the view that the combination of Airtours and Owners will prove beneficial to both consumers and shareholders alike.'
The 60-day bid clock has restarted after being suspended on Monday on day 37 awaiting the DTI's decision. Tomorrow is the last day, in the absence of a higher offer, that Owners can release fresh financial information.
View from City Road, page 27
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