Germans set to raise £1.3bn offer as Thomson rebuffs request for talks

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The Independent Online

The German holiday company stalking Thomson Travel indicated yesterday that it might be prepared to raise its £1.3bn offer for the company if it could secure an agreed deal.

C&N Touristica, whose initial offer of 130p per share was rejected on Tuesday, said it was "willing to meet Thomson" to discuss whether a higher offer might get the board's backing. It ruled out a hostile bid, saying this could further damage Thomson's business.

Thomson shares rose 8.25p to 137.25p on hopes of a higher offer. However, Thomson immediately rejected the requests for talks. Charles Gurassa, the chief executive, said: "C&N's proposed offer would dramatically undervalue the Thomson Travel business and its excellent prospects under its new management team. On that basis we see no purpose in any meeting."

Analysts believe a higher offer from C&N is now highly likely. "The fact that the shares are trading above 130p shows people think they are going to take it higher, probably 140p to 150p," one said. "Anything above that and C&N would probably walk away or look at another UK target like First Choice Holidays."

Phillips & Drew, which holds about 4 per cent of Thomson, said the company was worth considerably more than 130p. "We think C&N is valuing Thomson on its past problems rather than its future prospects with the Internet and interactive TV... this is a cheeky and opportunistic approach," it said.

C&N has been visiting Thomson's institutional shareholders and has contacted the Thomson family, which controls 19.2 per cent of the shares. Stefan Pilcher, C&N chief executive, said: "We are encouraged by the market's response to our approach. We believe there is significant support for our initiative and that its success would be welcomed. The board of Thomson needs to recognise this and act accordingly.

Although C&N insisted that Thomson was not a "must have", analysts said it would give the German group a valuable pan-European spread, which it would need if it went ahead with plans to float.

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