Market expects more for Owners

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THE stock market is continuing to pitch for a higher takeover offer for Owners Abroad. Dealers were yesterday willing to buy Owners shares for at least 3p more than the value placed on them by the three-for-eight paper swap terms offered by Airtours.

Airtours, which set the 60-day bid clock ticking on Thursday night by launching its formal offer document, fell 1p to 289p yesterday. That price values each Owners share at slightly more than 108p, against a middle market price of 113p, down 2p.

The share movements were in reaction to the after-hours release of the offer document and the subsequent counter-attack yesterday by Owners, which said the pounds 221m bid did not remotely reflect the company's value or prospects.

There is some belief in the City that the bid involving the second and third-largest holiday companies in the UK will escape a monopoly investigation. And some believe a counter-bid, most likely from LTU of Germany, could be made. LTU has already had a proposed alliance between its Thomas Cook travel agency arm and Owners sidelined by the Airtours bid.

Howard Klein, chairman of Owners, said he had recently spoken to LTU and Cook, and both sides wanted to proceed with the alliance. He declined to say whether LTU would make a bid, but said: 'I'm sure the Germans will keep their powder dry and await developments.'

On the offer document, he said: 'We have severe concerns about Airtours' motivation for launching its offers, which we believe are defensive and will work against the interests of the travel industry and the consumer. We believe that they are trying to buy the group on the cheap after the hard work has already been done.'

He also questioned Airtours' ability to manage a combined group that would have an annual turnover of pounds 1.2bn.

David Crossland, chairman of Airtours, countered: 'We have a good management track record and understand the industry perfectly. We're already managing a group with turnover of more than pounds 800m.'