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Carnival sale hits Airtours
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May 21, 2001: 4:42 a.m. ET
UK's largest package tour company sees shares drop on sale by Carnival
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LONDON (CNN) - U.S. cruise company Carnival said it will sell its Airtours stake, sending shares in the UK's No. 1 tour operator down as much as 8 percent.
Carnival said on Monday it plans to sell its 25 percent stake, which was worth about £358 million ($515 million) at Friday's closing price.
"The strategic reasons for Carnival's continued minority ownership in Airtours are no longer compelling, and we now believe that it is the appropriate time to consider exiting this relationship," said Carnival Chief Executive Micky Arison.
Arison pointed to the purchase by Airtours last year of U.S. cruise retailer Travel Services International.
Carnival (CCL: Research, Estimates), the world's largest cruise operator, said about 123.3 million Airtours shares will be placed with institutional investors, with the book expected to close on Thursday.
Airtours insisted, however, that the commercial relationship between the two would continue.
Airtours said it had agreed to release Carnival from the share lock-up agreement between them. "On the basis that they wanted to pursue their strategy in cruising, we were happy to release them," Airtours Chief Executive Tim Byrne said in an interview with Reuters.
"They depend on us to distribute their product, and we depend on them to give us their product to distribute, so that commercial relationship will continue very strongly," Byrne said.
Meanwhile, Airtours on Monday reported a six-month operating loss before one-time items of £77.4 million compared with £71 million in the same period last year, as it continues to expand the business.
Airtours said group turnover in the period rose 32 percent to £2.1 billion and reported strong summer bookings in major markets, with the UK up 13 percent.
Airtours (AIR) shares were last down 5.2 percent at 276.75 pence in London trading
--from staff and wire reports 
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