Airtours fears Cook spoiler in Owners bid

THOMAS COOK and the travel agency's German owners are thought to be planning a tender offer for Owners Abroad to block the pounds 267m takeover offer that Owners faces from Airtours, the fast-expanding holiday company.

Airtours fears Thomas Cook may use the backing of its joint owners, Westdeutsche Landesbank and the travel group LTU, to acquire enough shares in Owners to prevent Airtours gaining control. Owners had agreed a strategic alliance with Thomas Cook and LTU, but this deal will be scuppered if Airtours is successful.

Owners, whose collection of holiday firms makes it the UK's second-largest package holiday group, would welcome either a tender offer or a dawn raid as a means of escaping Airtours' bid. Its advisers are believed to have urged the Germans to intervene.

A spokesman for David Crossland, Airtours' chairman, said: 'This smacks of a discredited board seeking a desperate solution. Anybody entering this fray should bid all shareholders for all of the stock. Some kind of cash tender offer is not in all shareholders' interest.'

Although Airtours has declared its offer final, it has reserved its right to respond to an intervention from Thomas Cook and LTU.

Both Airtours and Owners are pondering the intentions of Mercury Asset Management, which has raised its stake in Owners from 13 to nearly 15 per cent over the past 10 days or so. 'Mercury are playing God as they have done in other bids,' one observer said yesterday.

Airtours' bid is due to close on Tuesday next week. It is offering 15 of its shares for every 34 held in Owners.

Airtours has been one of the stock market's fastest-growing companies in recent years. Its turnover has more than doubled to more than pounds 400m since 1990, while pre-tax profits have jumped from pounds 6.3m to pounds 36.5m.

The combination of Airtours and Owners would give the enlarged company more than 25 per cent of the holiday market. The Office of Fair Trading recommended the proposed takeover should be reviewed by the Monopolies and Mergers Commission, but was overruled by Michael Heseltine, President of the Board of Trade.