Andrew Yates reports on a farcical day for the largest tour operator in the UK, which involved conflicting reports from the company and its advisers.
Confusion reigned yesterday as Thomson Travel attempted to dampen speculation it was heading for a pounds 1.3bn stock market flotation, even though its adviser, SBC Warburg Dillon Read, is understood to have been working on final plans for the tour operator to come to the stock market
Paul Brett, chairman and chief executive of Thomson Travel, expressed surprise at reports that the group was definitely on course for a flotation in the spring.
He said: "We have had Warburgs as our advisers for 30 years. We have talked to them every few months for the years and years and they ask if we are ready to float. But no decision has been taken and a flotation is pure speculation. I have no idea what we have in mind for the future."
The final decision must come from Thomson Corporation, the Canadian media and publishing giant which owns the tour operator.
Mr Brett, a board member of Thomson Corporation, said no decision was imminent. He also denied he had instructed Warburg to compile flotation plans.
Warburg refused to comment on the record about the deal. However, in a bizarre twist, sources close to Warburg confirmed the bank was well advanced with flotation plans and that the pounds 1.3bn deal was on track for the end of May.
"A draft mandate has been decided and they look like going ahead with the plans," said one source. City observers believe that Mr Brett is secretly very keen for the group to gain independence from its Canadian parent and is pushing for a flotation.
A flotation has become a more likely option for the group after Margaret Beckett, President of the Board of Trade, decided against forcing tour operators to give up their travel agency chains after a Monopolies and Mergers inquiry. Such a move would have hit Thomson hard as it own the Lunn Poly chain.
It would be an good time for Thomson to come to the market. Other tour operators, such as Airtours and First Choice, have been trading strongly with bookings reaching record levels due to windfall bonuses and strong economic growth.
Analysts predict that Thomson's pre-tax profits rose from pounds 82m in 1996 to around pounds 100m last year. "Given the buoyancy in the travel market at the moment this would be an attractive flotation," said one.
The deal could spark off another wave of consolidation in the travel industry, giving Thomson the financial fire power to go on an acquisition spree. It is keen to expand in Europe and Mr Brett confirmed yesterday that the group was scouring the globe for deals further afield in an attempt to create an international travel business. Thomson is currently looking for targets in the Far East.