AIRTOURS is competing with German operators to buy DER and is thought to have bid around £300m for the company.
DER is owned by German Railways, Deutsche Bahn, and is the fourth largest operator in Germany.
Deutsche Bahn is also thought to have received offers from Neckermann and the Rewe Group and is expected to make a decision by the end of the year.
Thomson Travel Group was also believed to be interested in DER, but would have to raise money to fund the bid and that is virtually impossible with its share price floundering at just over £1, compared with its float price of 170p 17 months ago.
DER would be a good fit for Airtours because it can offer the group much-needed distribution through its travel agencies in Germany. DER does not have aircraft, but Airtours could fly passengers on its German subsidiary Frosch Touristik.
DER has around 9% of the German market and a deal would give Airtours a share of up to 15% in the country as FTi has around 6%.
Airtours is still smarting from the European Commission’s decision to block its purchase of First Choice and wants to continue acquiring overseas to grow profits. DER is one of several potential targets for the group.
Airtours group finance director Tim Byrne refused to comment on rumours about DER but said:”We will continue to expand in mainland Europe and we regard Germany as most important because it is the biggest market in the world.”
But Airtours would have problems to overcome if it purchased DER. The operator is thought to be overstaffed and not very profitable for its size. Last year it made around £15m profit on turnover of £2.2bn.
nAirtours group finance director Tim Byrne said it would decide at its board meeting in November whether to pursue a legal challenge against the European Commission’s decision to block its purchase of First Choice (Travel Weekly October 4). Airtours is trying to enlist the support of the Institute of Directors and the Confederation of British Industry.