Airtours loses fight for Owners

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AIRTOURS has lost its bitter two-month fight to take over Owners Abroad, the rival package holiday company. Success would have made Airtours the UK's second largest operator with 29 per cent of the market, ranking closely behind Thomson, the clear leader, which controls 34 per cent.

The result of the pounds 290m bid, which finished yesterday lunchtime, was close. Airtours, which has bought an 8.2 per cent stake over the last week, mustered support from holders of a further 35.18 per cent of Owners' equity to take it within 7 per cent of its goal.

Shares in both companies fell immediately after the result. Owners dropped by 14p to 124p, which compares with the implied 149p value placed on the shares during the bid by Airtours' takeover terms. Airtours fell by 9p to 327p.

The hostile action by the UK's third-largest holiday company ended on a slightly sour note. David Crossland, chairman of Airtours, questioned the defensive tactics used this week by the other side.

His complaint centred on Thomas Cook, the German- owned travel agent, which has spent more than pounds 20m buying a stake of nearly 9 per cent in Owners to protect its planned trading alliance with the UK's second-largest holiday company.

Mr Crossland said: 'Naturally, we are disappointed that Thomas Cook's spoiling action carried the day. Now we are one of the largest shareholders in Owners Abroad, we shall be watching developments at the company very closely. More than half the shareholders in Owners have effectively shown their unwillingness to support the company's future direction.'

A spokesman for Owners played down the part played by Cook, dismissing claims that Cook's share-buying was alone responsible for Airtours' failure. He said that some of the institutions that sold shares to Cook would in any case have rejected Airtours' 15-for-34 share swap terms.

Howard Klein, chairman of Owners, said he discovered his company had remained independent about 90 minutes after the bid closed. 'David Crossland called me and said 'I've rung to tell you that you've won'.'

Mr Klein added that Owners, which sells holidays under the Sovereign and Falcon brands, would now concentrate on developing its alliance with Thomas Cook. The alliance also includes LTU, the German travel business that owns 14 per cent of Cook.

'We have successfully convinced our shareholders of the case for Owners Abroad continuing as an independent company. We shall now work to justify our shareholders' faith in us, both through improving the performance of our existing business and through implementing and developing the alliance with Cook.'

Cook will soon move to cement the alliance further by making a tender offer for 12.5 per cent of Owners' shares. The offer, which will be at 150p per share, has to be made within three weeks.

(Photograph omitted)