Thomson Travel, the holiday giant being stalked by Germany's C&N Touristic, yesterday rejected a revised proposal which would value the UK company at £1.45bn. However, analysts said that it was only a matter of time before the UK tour operator succumbed to its German predator.
Thomson said yesterday it would be prepared to let its advisers meet with the C&N team to discuss why the group's board would not recommend a potential offer of 145p a share, which was raised from an earlier mooted price of 130p. Thomson shares yesterday closed up 10.25p at 138.5p.
Russell Amerasekera, a spokesman for Thomson, said: "This is still a proposed possible offer rather than a formal offer. But the board felt it had a duty to consider it. It did, at length and very carefully, and agreed unanimously that an offer of 145p, if made, would not reflect the value of the business and its prospects."
He said the board had taken into account a recent strategic review, which led to a focus on the group's core air-inclusive holiday business, a drive to improve margins and a cost-cutting programme designed to save £50m a year.
A C&N spokesman said: "We have noted Thomson's announcement and we are considering our position."
Jeremy Skidmore, editor of Travel Weekly, said: "The key thing is that Thomson is not slamming the door in C&N's face.... This is not a done deal yet, but I believe it is an inevitable deal."
It is understood Thomson is resigned to looking for value, not independence. Mr Skidmore said: "If the board can push the price up to anywhere near 170p [its flotation price in May 1998], it will consider that it has done a good job for shareholders." But analysts doubted C&N would pay much more than 150p.
Mr Skidmore suggested that if negotiations between the two companies began and Thomson rejected a third approach of up to 160p, the German company may be prepared to go hostile.
Earlier this week, the Thomson family - the company's largest shareholder - increased its holding from 21.3 to 22.7 per cent. Thomson claims the move indicated the family's "support for the management team", but more cynical observers suggest that it was hoping to push the offer price up.
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