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Thomson bid battle looms
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May 12, 2000: 8:50 a.m. ET
British tour operator receives second approach after C&N lifts offer to $2.4B
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LONDON (CNNfn) - Two German rivals looked set to square up in a bidding battle for Thomson Travel Group on Friday as C&N Touristic lodged a £1.6 billon ($2.41 billion) offer for Britain's largest holiday company, only to be joined in the chase by an unidentified third party - named by traders as archrival Preussag.
News of the new approaches sent Thomson shares spiralling, while other U.K. travel stocks jumped on the prospect of further consolidation in the European leisure sector.
Analysts suggested that asset sales would be necessary to head off possible antitrust concerns should either takeover attempt for Thomson succeed.
Thomson said early Friday it was in talks with C&N that might lead to a recommended cash offer of 160 pence a share, up 15 pence from C&N's previous offer and 30 pence higher than its first bid in early April. Thomson (TRV) shares were 14 percent higher at 162 pence in afternoon trade, adding 10 pence when the third-party interest emerged.
 Thomson has long been seen as a bid target by analysts as its stock had lagged since the firm went public at 170 pence per share in 1998. Thomson announced a series of profit warnings last year and ditched its chief executive in September as industry overcapacity hit earnings.
C&N - a 50-50 joint venture between retailer Karstadt (FKHA) and airline Lufthansa (FLHA) -- has not yet made a formal bid for Thomson, aiming first to secure the approval of the U.K. company's board. Buying Thomson would help it leapfrog Preussag as Europe's largest holiday operator.
First Choice also targeted
By mid-morning, though, a new Thomson statement said the company was the subject of an approach from another possible bidder. It didn't immediately name the third party, but traders cited Preussag, Europe's largest holiday operator, as the potential bidder.
Preussag has restructured in recent years from its roots as an engineering firm to claim the European top spot through acquisitions including TUI, the largest German tour operator. It controls Thomas Cook, the No. 3 player in the U.K., which analysts suggested it would have to sell or face a veto on the deal from competition regulators.
Preussag (FPRE) was not immediately available for comment, and its shares were narrowly lower in Frankfurt. Analysts suggested the Hanover-based company had deeper pockets than C&N and could afford to bid more.
Shares in First Choice (FCO), the U.K.'s fourth-biggest travel company, surged 12 percent in London. It kept its independence last year when European antitrust officials blocked a bid by Airtours (AIR), which trails Thomson in the U.K. market. The Airtours bid had trumped First Choice's own agreed merger with Swiss-based Kuoni.
Airtours (AIR) is now in talks with Swiss airline operator SAirGroup over a possible combination of their tour operating interests in Germany. 
-- from staff and wire reports
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