Possible Airtours bid lifts rival

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The Independent Online
SHARES IN First Choice Holidays rose sharply yesterday on speculation that Airtours might muscle in on its planned merger with Kuoni by launching a pounds 750m hostile bid for the company.

First Choice shares closed 14.5p higher at 190p despite an attempt by the company's chief executive Ian Clubb, to warn Airtours off.

Just a day after he said an Airtours bid would be a "reckless gamble", Thomson Travel said it would not stand on the sidelines if a bid battle developed. A successful bid by Airtours for First Choice would wrench the market leader position away from Thomson in the UK market, a position it guards jealously.

"We have been market leader in the UK for 25 years and we have no intention of losing that position," Thomson said.

Industry figures compiled by AC Nielsen show that Thomson had a 28 per cent share for package holidays in the summer 1998 season to October. That compared with 19 percent for Airtours and 15 per cent each for Thomas Cook and First Choice.

Critics of the First Choice-Kuoni deal have argued that it does not solve First Choice's weakness of lacking its own chain of high street travel agents. Airtours would be able to add its Going Places chain and wring out additional cost savings.

Airtours declined to comment. Its shares edged 10.5p lower to 488.5p.