Carnival gains Airtours stake

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The Independent Online
Airtours, Britain's second largest tour operator, has agreed to sell a near 30 per cent stake in the company to Carnival Corporation, the US cruise operator in a pounds 200m deal that could lead to a full takeover.

Howard Frank, Carnival's vice-chairman said a full bid was "always a possibility" but that Carnival was content with its position at the moment. David Crossland, Airtours chairman, who will cease to be the majority shareholder after the deal, seemed relaxed about the prospect: "Even if Carnival made a bid in the future, this is a very hands-on business and I know a lot more about it than the guys in Miami."

The announcement came as the latest figures on summer bookings confirmed that the dramatic slump in package holiday sales is continuing. Airtours said its bookings for this summer were 30 per cent below last year's levels with holidays to European destinations such as Greece particularly weak.

First Choice, the third largest tour operator, said its bookings were 14 per cent down with Greece weak but Turkey stronger. Mr Crossland said: "The more expensive holidays to places such as the Caribbean, Florida and cruise holidays are selling well but the lowest price holidays are being affected by nervousness about jobs and other factors." According to industry figures, cumulative bookings across the industry are down by an average of 21 per cent but have improved since mid-January and are now running closely to last year's figures.

Under the terms of the deal announced between Airtours and Carnival is paying pounds 100m for 20 million new shares at 500p per share and 475p per share for up to 20m existing Airtours shares. Carnival has undertaken not to increae its shareholding beyond 29.9 per cent for 12 months. Airtours shares closed 20p higher at 450p.

Mr Crossland's stake will fall from 26 per cent to 19 per cent. Tom Trickett, the co-founder, sees his stake fall to 4 per cent. Mr Crossland will join the Carnival board while two Carnival directors will take seats on the Airtours board.

The deal will provide Airtours with a pounds 100m cash injection to continue its strategy of reducing its reliance on the UK market. Two years ago the company sold no holidays to customers outside the UK, while this year almost half its sales are overseas.

Airtours is particularly keen to exploit the growing cruise market in which Carnival is a world leader.