THOMAS Cook’s owners WestLB and Preussag will not try to scupper the Airtours bid for First Choice because they stand to make huge gains if the deal goes through.
City analysts believe Thomas Cook will instead wait until the deal is agreed and then bid for Kuoni.
The offer document states that Thomas Cook has agreed not to make a bid for First Choice and has pledged to accept the proposal unless a third party comes in with a bid that is 10% greater than Airtours’ offer.
WestLB and Preussag own around 10% of First Choice, which has been written down in their accounts at 60p a share. Airtours is offering 229p a share, which would give WestLB and Preussag a profit of ú53m on their 33m shares.
Airtours finance director Tim Byrne said Thomas Cook’s share will give it a 2.5% stake in Airtours.
In addition, Thomas Cook tour operations expects to be able to expand on the back of an Airtours/First Choice deal because merged companies always lose some market share.
Analysts believe Thomas Cook would then turn its attention to Kuoni and might have to battle Thomson for the company.
“Both Thomson and Thomas Cook have upmarket profiles and would sit nicely with Kuoni,” said one analyst. “I wouldn’t be surprised if they both bid for Kuoni.”