HOSTILITIES between Airtours and First Choice boiled over as the proposed merger between the Crawley-based operator and Kuoni finallycollapsed.
First Choice chairman Ian Clubb reacted furiously after his counterpart at Airtours, David Crossland, said the defeated management had a duty to their shareholders to back Airtours’ plans to take over the company.
The row broke out after less than a third of ordinary shareholders supported First Choice’s proposed merger with Kuoni.
“The suggestion from Crossland is that we need reminding of our duties and I resent that,” said Clubb. “I don’t need anyone to tell me what my duties are and how to run the business. All he is trying to do is build up the Airtours case because he knows it is struggling.”
The Airtours bid, which has lapsed, is currently being investigated by the European Commission. Airtours will receive a statement of objections from the EC this week and will presents its case in Brussels on July 28 and 29.
“I am very pleased the Kuoni deal has lapsed,” said Crossland. “I very much hope the First Choice board will give Airtours all possible support in its efforts to convince the EC that the acquisition of First Choice by Airtours should be permitted.”
Clubb said it was not about supporting Airtours but rather supplying facts to the EC. However he admitted he believed the Commission will block a further bid.
“There is collective dominance with four players, let alone three,” he said.
The snub to Kuoni is an embarrassment for First Choice management who, despite their excellent track record, failed to convince shareholders it was the best way forward. “I don’t see what else we could have done to convince them,” said Clubb.
Clubb said it was ‘business as usual’ for First Choice and new opportunities would arise.
Despite the surprise backing of Thomas Cook, which has a 10% stake in First Choice and originally supported the Airtours bid, only 30.7% of ordinary shareholders supported the merger.
Industry observers say Thomas Cook supported the Kuoni merger to show goodwill towards the Swiss company, which is believed to be a target of Thomas Cook owner Preussag.
The Germany company is now expected to launch a bid of its own for Kuoni.