Thomson’s management team are taking the biggest gamble of their lives with their response to Airtours’ bid for First Choice.
First we had the damp squib of the First Choice offer document for its proposed merger with Kuoni. Then we had the expected counter bid for First Choice from Airtours, which looks a lot more attractive to shareholders.
But the biggest shock came from Thomson, which has made it quite clear that it plans to react to the bid by flooding the market with cheap holidays.
This is great news for holidaymakers, who can expect bargains galore. But it is a potentially disastrous strategy for shareholders, who saw the value of their investment in the market leader plummet further on this news.
Perhaps Thomson is merely trying to destabilise the Airtours share price. But, if it is serious, surely this return to overcapacity and fight for market share is not the way forward for a mature industry.
And doesn’t Thomson realise that it cannot act in isolation now that it is a public company?
I’ve got a lot of time for Thomson’s team and it has a super brand, but this is potentially disastrous policy which, if it doesn’t work, will probably lead to the demise of the management team.
Thomson would be better off letting Airtours get First Choice and instead targetting upmarket Kuoni.
Jeremy Skidmore – editor