|
UK travel bid hijacked
|
 |
May 15, 2000: 5:00 a.m. ET
Preussag leapfrogs C&N to win $2.7B battle for UK's Thomson
|
LONDON (CNNfn) - Preussag beat out German travel company rival C&N Touristic in the battle for Britain's Thomson Travel Monday, after the U.K. firm accepted a cash offer worth £1.8 billion ($2.7 billion), or 180 pence per share.
C&N said it would not raise its earlier offer of 160 pence per share. The Preussag offer for Britain's largest travel firm by market value would cement its position as Europe's largest tour operator. Preussag joined the bidding Friday, a month after C&N began its pursuit of Thomson.
Thomson directors unanimously recommended the deal, and Preussag has an irrevocable undertaking from the U.K. firm's largest shareholder, Woodbridge International, to sell its 22.7 percent holding. 
A takeover by Preussag would force other deals in the sector: the bidder said it would divest its 50.1 percent of Thomas Cook, Britain's third-ranked travel operator, if it succeeds in buying Thomson. Competition regulators probably would not allow Preussag to control both companies.
Thomson (TRV) stock rose 7 percent to 173 pence in early trading in London. The 180 pence per share offer is 89 percent above the price of Thomson stock prior to C&N's first approach.
C&N's latest offer was its third, having started the bidding in early April at 130 pence. It made a series of approaches to Thomson, seeking to secure the approval of the U.K. company's board before formally making an offer to the company's shareholders. Buying Thomson would have allowed C&N - a 50:50 joint venture between retailer Karstadt (FKHA) and airline Lufthansa (FLHA) - to leapfrog Preussag as Europe's largest tour operator.
Thomson shares have been poor performers since being floated at 170 pence per share in 1998. 
Hanover-based Preussag (FPRS) has transformed itself 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. Preussag stock inched 0.8 percent higher to  43.60 in Frankfurt Monday.
"A 180 pence offer is out of the question - we would not go higher than 160," a C&N spokeswoman told Reuters. "The British market is still interesting for us and we'll look for alternatives."
Preussag said it would immediately establish an "arm's-length" arrangement to control Thomas Cook, pending the disposal of the business when it completes the purchase of Thomson. As well as its 50.1 percent direct stake, the German firm also has an option with Westdeutsche Landesbank to buy or sell a 27 percent holding in Thomas Cook. U.S. partner Carlson Companies Inc. owns 22 percent of Thomas Cook, and has the right to swap that holding with Preussag for cash or shares in Thomson Travel.
Preussag did not indicate how it plans to dispose of Thomas Cook, but reports have suggested Swiss firm Kuoni might be interested in acquiring the firm. Kuoni tried to buy rival U.K. operator First Choice last year, but was outbid by Airtours (AIR). Airtours' takeover offer subsequently foundered on antitrust regulators' objections.
Thomson sold 7.7 million travel packages in 1999, and flew more than 10 million passengers on its airline, Britannia Airways. The firm has leading positions in the tourism markets in Britain and Scandinavia. 
|
|
|
|
|
|
Thomson Travel
Preussag
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
