Outlook: Everyone loses face in battle of the tour operators
Thursday 23 September 1999
Mr Crossland, chairman of Airtours, is made to look a prize chump for insisting at virtually every turn in the saga that he was 100 per cent certain of clearance. His competition lawyers, Slaughter and May, emerge even more red faced, first for letting Mr Crossland believe this naive nonsense, then for allowing him so liberally to peddle it to his City audience, and finally for missing the deadline for delivering Airtours' list of concessions to the European Commission.
Also on Mr Crossland's "highly experienced team" of competition advisers were Roger Davis, a former member of the Monopolies and Mergers Commission, John Swift QC, sometimes labelled Britain's "top" competition lawyer, and Lexecon, described by Airtours with customary exaggeration as "a leading economics consultancy". Mr Crossland must begin to wonder what he pays these people for. Wishful thinking is one thing, but to miss the deadline?
Mr Crossland is not the only company boss to be feeling sore about his highly paid competition advisers. Round at Whitbread, David Thomas is still spitting blood at Clifford Chance for telling him his bid for Allied Domecq's pubs would sail through the competition authorities without obstruction. In the event, it was referred to the Monopolies and Mergers Commission. Chief executives, it seems, would do better to read the press than fork out for such people.
Then there are Airtours' shareholders, led from the front by the luckless Phillips and Drew. Drooling at the mouth at the prospect of creating another FTSE 100 company, they sold the First Choice board down the river by rejecting its advise and holding out for the higher Airtours offer. It is no part of a shareholder's responsibility to decide the public interest aspects of a takeover battle, but by the same token it was not hard to see why Airtours was willing to pay such a premium; monopoly is scarce and therefore priceless. With First Choice shares now trading a quarter lower than the value of the alternative Kuoni bid, the last laugh is on them.
But perhaps the biggest chumps of them all are Stephen Byers, the Trade and Industry Secretary, and his competition minister, Kim Howells. Together they allowed Brussels to take control of a takeover that so clearly belonged to these shores that you begin to wonder why they are bothering to play at being ministers at all. Why not just let Brussels run the show?
The Competition Commission could scarcely have reached a different conclusion, but at least it would have been a more credible and transparent one. With Brussels there isn't even a published report to support Mario Monti's first big decision as Competition Commissioner, just a series of assertions and observations, which incidentally were leaked and bandied around ahead of the announcement with almost total disregard for the rules on dealing with price sensitive information.
Mr Byers should note that the French do not intend to make the same mistake. Dominique Strauss-Kahn, France's finance minister, has already made as plain as pikestaff that any decision on the merger between Carrefour and Promodes, a transaction that seems to raise many of the same "oligopoly" issues as the Airtours bid for First Choice, will be the exclusive preserve of La France.
So just in case you've got the bit between your teeth, Mr Monti, be assured that this defensive French response to the problem of growing competition in Europe is going to happen whether you like it or not.
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