THERE has been rare comfort in the past week for investors in travel shares. Airtours leapt 66.5p to 430.5p on rumours that 29% shareholder Carnival will announce a full-scale bid for the group at tomorrow’s annual general meeting.
Thomson and First Choice shares also rose on rumours that expansion-hungry German giant Preussag, which already owns 25% of Thomas Cook, was linked with both of them. It is difficult to find out whether anything is actually happening. Thomson, Airtours and First Choice can’t help – any of their directors who talk up the share price could find themselves in prison.
Of the rumours, the Carnival bid for Airtours sounds the most likely. The cruise giant probably sees Airtours as good value at its current price and is unlikely to remain a minority shareholder indefinitely. But it would have to find a big enough role to satisfy the operator’s founder and chairman David Crossland, who doesn’t show any sign of wanting to retire.
Carnival would also have a problem with Airtours’ in-house carrier Airtours International. US companies are barred from owning European airlines.
Meanwhile, Preussag is planning to take 50.1% of Thomas Cook and would run into regulatory problems if it tried to buy Thomson or First Choice outright. It sounds very unlikely, but don’t rule anything out in this market.
Jeremy Skidmore – editor