Thomas Cook severs ties with First Choice

Crawley-based operator’s 34.4m shares bought by Spain’s Barcelo

Thomas Cook severs ties with First Choice

Report by STEVEJONES

THOMAS Cook has sold its 6.5% stake in First Choice for £51.6 million, ending an eight-year association between the firms.

The 34.4 million shares were snapped up by Spanish firm Barcelo, which sold its travel arm to First Choice in June.

It raises Barcelo’s stake in First Choice to 12.65% which could increase to 21% next year if it hits profit targets.

First Choice chief executive Peter Long said Barcelo’s investment will further strengthen the ties between the two companies.

“Simon Pedro Barcelo, the company’s vice-chairman and chief executive, joined our board in June when we acquired Barcelo’s travel division. The purchase shows a further commitment on its part to participate in the development of First Choice,” said Long.

Thomas Cook, which sold at 150p a share, said it no longer viewed the stake as a necessary investment.

Thomas Cook deputy chief executive and chief financial officer Alan Stewart said: “When we acquired our stake in First Choice in 1992, it was because we didn’t have a mass-market tour operating or charter airline.

“Now we have that, we no longer view our shareholding as a strategic investment.”

The sale was at a satisfactory price in excess of the current market value, he added. Thomas Cook originally bought the shares at 150p.

Meanwhile, the Crawley-based operator is continuing its European drive with the £470,000 acquisition of 95% of Swiss firm Taurus Tours.

This follows First Choice’s policy of buying specialists rather than mass-market operators.

Taurus, which carries around 12,000 passengers per year, specialises in Turkey and also offers Tunisia and Egypt.

Long said the company will benefit from the buying power of Ten Tours in Turkey, which it purchased earlier this year.

“We expect Taurus to realise future growth by utilising the existing resources of the First Choice Group in Europe,” he said.