Bid for First Choice looks certain to be blocked
Saturday 18 September 1999
Mr Monti, who took over the position from Karel van Miert recently, is reported to be set to rule out the Airtours' bid for First Choice at a meeting next week. If confirmed, that will be the first time that European officials have halted a deal to prevent the formation of an oligopoly.
Mr van Miert was known to have opposed the Airtours move. Competition officials have said that concessions offered by Airtours were insufficient to allay their concerns.
In June, the Commission said that it feared the deal could result in the supply of foreign holidays being largely controlled by just three companies: the merged Airtours-First Choice, plus Thomson Travel and Thomas Cook.
First Choice's chief executive Peter Long said yesterday that he was disappointed by the stream of anonymous rumours from the Commission. Mr Long said: "Any of these comments is price sensitive, they affect the market." First Choice shares shed 1p to finish at 147p yesterday; Airtours gained 1p to close at 400.5p. "What we want to do is lift the uncertainty," Mr Long said. The meeting to settle the issue is scheduled for next Wednesday.
Airtours' bid for First Choice lapsed when the Commission inquiry was launched in June. If the move had been approved, a fresh bid would have been launched.
Meanwhile, First Choice announced that it had taken over Sunsail International, a specialist sailing holiday business. Mr Long said the pounds 40m Sunsail acquisition would help First Choice build its business, with opportunities for substantial cost savings.
Sunsail operates principally in the Mediterranean, the Caribbean, UK and the Indian Ocean. It is a leading provider of flotilla holidays and has a fleet of 900 yachts. It also operates 10 clubs in Turkey, Antigua and Greece. About 60 per cent of its customers come from the UK, with the balance from the United States and continental Europe.
In the year to October 1998, the last published accounts, Sunsail reported profits before tax of pounds 2.5m, with net assets of pounds 8.8m. First Choice paid an initial consideration of pounds 35m for the business, plus a deferred consideration of a further pounds 5m.
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