Thomas Cook - Kuoni merger rumours could spark bid battle

Thomas Cook and Kuoni moved to quash speculation yesterday that they are planning a £1bn merger, though travel sources insisted talks were taking place.

The two companies were responding to weekend press reports suggesting that German-owned Thomas Cook was in discussions with the upmarket Swiss tour operator about creating a new force in the European travel market.

If a deal does materialise it would continue the consolidation in the international travel sector and bring together Thomas Cook's mass market holiday brands, which include JMC and Club 18-30, and Kuoni's expertise in upmarket holiday packages.

The reports suggested that the merged company would be listed in Switzerland and run by Stefan Pichler, Thomas Cook's chairman and chief executive. Thomas Cook would control 60 per cent of the merged company. The reports said Thomas Cook was being advised by Morgan Stanley, with Kuoni advised by CSFB.

Both companies denied a deal was being discussed, but travel experts indicated that talks were continuing. One said: "It's all about scale in this market, so you can leverage your buying power. Kuoni seems to have been looking for a deal for a while."

However, Thomas Cook recorded substantial losses last year while Kuoni remained in the black.

The tie-up is seen as a neat fit, as Kuoni is strong in Scandinavia where Thomas Cook has no presence. The combined business would also cater for a cross-section of holiday tastes, from Thomas Cook's boisterous, youth-orientated Club 18-30 holidays to Kuoni's long-haul holidays to destinations like the Maldives and Mauritius.

The possibility of a deal fuelled speculation about whether other potential bidders might enter the fray. Analysts said the most likely interloper was TUI, the German company that owns Thomson Travel Group. It too would be interested in adding a prestige name like Kuoni to its portfolio.

First Choice Holidays was also seen as a possible candidate. It sought a merger with Kuoni in 1999, which was wrecked by a counter-bid from Airtours, now MyTravel.

First Choice declined to comment yesterday but observers pointed to remarks made by Peter Long, its chief executive, at First Choice's interim results last week. He suggested that First Choice's strategy centred on organic growth with smaller, bolt-on acquisitions. He said he did not foresee First Choice participating in any major consolidation of the European travel sector.

Thomas Cook dismissed suggestions of an imminent deal. "There are currently no talks on a merger with Kuoni," a spokesman said.

Kuoni was equally adamant. A spokesman said: "We are not planning a merger. But everyone is talking to everyone else in this business. We had talks with Thomas Cook and others in the spring. But it was not about a merger but about working together on our charter operation in Scandinavia."

Any deal with Kuoni would have to be friendly, to get around the Swiss company's unusual shareholding structure. The Kuoni and Hugentobler Foundation controls 25 per cent of the company's voting rights even though it owns just 6.25 per cent of the capital.

The deal would also provide an exit route for Thomas Cooks's controlling shareholders, Lufthansa, the German airline, and KarstadtQuelle, the German retail conglomerate.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones