First Choice pushes for Kuoni deal

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The Independent Online
THE MUDSLINGING between tour operators First Choice and Airtours entered a new phase yesterday as First Choice urged shareholders to accept the merger offer from Kuoni, the Swiss group, prompting Airtours to pledge to revive its lapsed bid should it receive clearance from the European Commission.

Ian Clubb, First Choice's chairman, said: "The Kuoni merger is real, represents competitive value and is deliverable now. Shareholders are strongly advised to accept." The Kuoni offer values First Choice at around 190p per share. The Airtours bid, valued at around 252p per share, lapsed last week after the EC said it could take until October to rule whether it should proceed. Shares in First Choice closed up 3.5p at 194p while Airtours rose 4p to end at 505p yesterday.

In persuading shareholders to accept Kuoni's offer, First Choice revised upwards the deal's expected cost savings to pounds 17m. It said the EC would either block another Airtours bid or require a combined Airtours-First Choice to make disposals which would undermine the tie-up's synergies, estimated at pounds 35m.

There was no guarantee Airtours would want to re-bid, it added.

Airtours dismissed all of First Choice's claims. "Airtours has made it patently clear it will re-bid if it gets clearance from the EC," said a spokesman. "Why else would it have sought clearance from the Takeover Panel to do so? We're not in the business of wasting the Panel's time."

There were a variety of means by which Airtours could satisfy competition concerns without the need for divesting entire businesses, he said.

He added that First Choice's revised cost savings were "dubious" because KPMG, the accountants involved had not published their report.

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