Thomas Cook enters fight for Owners

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The Independent Online
THOMAS COOK, the German- owned travel agency, yesterday offered to tender pounds 29m for a 12.5 per cent stake in Owners Abroad, adding a further twist to the three- month battle for the UK's second- largest holiday company.

Owners Abroad, whose brands include Sovereign and Falcon, is under siege from a pounds 285m takeover bid from the rival Airtours.

The rarely used tender offer is conditional on Airtours, the third- largest holiday company, abandoning its bid, and is pitched at 150p per ordinary share. There will be no tender offer for preference shareholders.

There were signs last week that big investors in Owners were hedging their bets, largely anticipating Cook's move. Cook, spun out of Midland Bank last summer, has more than 340 outlets.

Mercury Asset Management was one to hedge, taking its Owners stake above 14 per cent by buying more than 1 million shares. A spokesman for the fund manager declined to state its intentions in the light of Cook's offer.

The reaction in the City yesterday to Cook's move, which replaces its proposal last December to take a cross-shareholding in Owners, was unfavourable.

Roy Owens, an analyst at the Smith New Court broking house, said: 'It's a bit of a non-event.' Another analyst said: 'It was simply too little, too late.' The pressure has been on Cook to make a move since Airtours improved its bid terms a week ago.

Airtours' bid - a 15-for-34 share swap - closes next Tuesday, and values each Owners share at 145.5p against a market price of 141p, down 3p yesterday.

Christopher Rodrigues, chief executive of Cook, denied that the tender offer was a spoiling tactic. 'I wish I could tell you it was two pugilists in a ring. It isn't.

'These are very different propositions and there is a real choice for shareholders,' he added.

Owners, which became aware of Cook's plans over the weekend, favours the tender offer, and continues to urge shareholders to reject Airtours' bid.

Howard Klein, chairman of Owners, said: 'We were much criticised for the deal announced in December as being too cheap.

'They've now put up pounds 29m - a pretty meaningful commitment to make this alliance work.'

Owners' directors would not personally accept the tender offer, which Mr Klein said was a sign of 'the directors voting with their feet. We have three people on the board with an interest that totals pounds 18m.'

Airtours said it was pushing ahead regardless of yesterday's events. David Crossland, chairman, said: 'We think it is the second of two Thomas Cook spoiling tactics.

'We wish to acquire Owners and have made a full offer. The real crux is that if Cook wants this company then they have to make a full bid.'

The likelihood of a full counter- offensive from Cook, however, was virtually ruled out by Mr Rodrigues. He said: 'We don't think we should employ north of pounds 240m simply to change ownership.'

(Photograph and graph omitted)

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