AIRTOURS is set to strengthen its position in the US with the £240m purchase of Florida-based Travel Services International.
The operator has made a recommended cash offer of $26 per share for TSI, a major US player in the cruise, hotel, flights and car-rental sectors.
An Airtours spokesman denied it had paid too much for a company which made just £7.7m in last year, down from £13.6m in 1998.
“TSI has had an upward growth trend,” said the spokesman. “There were very particular reasons for the slump last year to do with an untimely rebranding strategy and that was dealt with before the Airtours offer.”
Although 11% of TSI’s bookings are made through its Web site, a spokesman for Airtours played down claims that the operator had bought an Internet company.
Claims that Airtours had struck an Internet deal initially sent its share price, which has slumped dramatically in recent weeks along with other leisure stock, soaring by 16%.
But the spokesman admitted:”This is not a mainly Internet company but it has outstanding Web capabilities.
Chairman David Crossland added: “This is an acquisition for strategic reasons. The purchase of TSI will provide Airtours with a market-leading position in the US, the world’s largest leisure travel market. TSI will provide Airtours with a vertically integrated leisure business in North America, a model which has been highly successful for us in Europe.
“The acquisition will significantly enhance Airtours’ e-commerce capabilities and will help Airtours establish a leading global leisure travel e-tailing business.”
Airtours is set to announce its Internet strategy, which will involve TSI, within six weeks.
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