Cook, the travel agency bought by LTU of Germany from Midland Bank for pounds 200m in the summer, is investing pounds 22.5m in a 10 per cent stake in Owners. The shares are being issued at 100p each, 15 per cent above yesterday's closing price of 87p, down 1p.
In return, Owners is ploughing pounds 20m into Cook loan stock, which yields 9.33 per cent a year.
For Owners, the link opens up high street retailing, an area recently taken on board at the rival Airtours, which bought the Pickfords travel agency business from NFC. Thomson, the market leader, retails through Lunn Poly. All three own airline fleets. Christopher Rodrigues, chief executive of Cook, said that, besides bedding down Owners' position in the UK, 'we are building a bridge between the two biggest travel markets in Europe'.
LTU is a dominant force in its home country. Its LTU Touristik subsidiary is the third-largest tour operator in Germany. LTU International Airways is the country's largest, and Europe's third-biggest, charter airline.
Cook itself has 340 outlets in the UK and more than 1,600 locations in 120 countries. It made pounds 13m before tax in the first half of this year. Analysts generally thought the link was good for Owners and said the timing of the deal had in effect squashed the long-running rumours pointing to a takeover bid from Airtours.
Owners received a 'tentative approach' in October, and is still deemed by the Takeover Panel to be a takeover situation.
Alongside the Cook deal, Owners revealed the cost of the round of heavy price discounting on summer holidays. Profits for the year to end-October fell from pounds 32m to pounds 25m before tax. Howard Klein, a disappointed chairman, said: 'Holiday bookings turned down prior to the election, and in real terms did not recover.'
Despite the downturn, the dividend has been lifted from 3.2p to 3.5p and analysts have upgraded profits forecasts for 1992/93 from pounds 32m to around pounds 35m.Reuse content