German Travel Co. To Buy Brit rival
HANOVER, Germany (AP) _ Europe’s largest package tour provider, Germany’s Preussag AG, is buying Thomson Travel Group PLC for $2.73 billion, topping a German competitor that had also been pursuing Britain’s biggest travel company. In a statement Monday, Preussag said Thomson’s board had accepted the bid _ which values Thomson at $2.73 a share _ and has decided to recommend that shareholders approve the takeover.
``A takeover attempt, or even a takeover offer, wouldn’t have been in the question if we didn’t have the full support of the management,″ said Preussag chief executive Michael Frenzel. ``The acquisition of Thomson gives Preussag the chance for a quantum leap in expanding its tourist business.″
Rumors of a deal had pushed Thomson shares up 13 percent Friday to $2.46.
The deal thwarts efforts by C&N Tourist AG, Germany’s second largest tour operator, to acquire Thomson. C&N had reportedly offered Thomson $2.43 billion.
C&N wanted a deal with Thomson to give it market presence in Britain and catapult it past Preussag to the top of the European travel sector, which has seen radical consolidation over the last couple years.
It is believed that C&N, jointly owned by German airline Lufthansa and retail and holiday group Karstadt Quelle, will not get involved in a bidding war with its larger German rival for Thomson.
Thomson has struggled over the past year with sagging profits. Preussag plans to finance most of its purchase with its own capital.
Thomson’s shares, which were valued at $2.78 at its listing in 1998, sank below $1.52 late last year when Thomson said it expected lower earnings after a weak summer season.
Founded by media tycoon Lord Thomson in 1965, Thomson Travel holds around 24 percent of the British holiday market.
To ward off competition scrutiny by European authorities, Preussag said it would sell its 50.1 percent stake in Thomas Cook Holdings, another British travel company.
The battle for control of Thomson began in April, when C&N approached the company over a possible $1.97 billion offer. That bid was rejected, as was a later sweetened bid of $2.2 billion.
But C&N said Monday it was still interested in breaking into the British travel market. Still, company spokeswoman Dagmar Rotter would not say whether C&N would make a bid for Thomas Cook after it’s sold by Preussag.