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Friday, September 10, 1999 Published at 09:00 GMT 10:00 UK

Business: The Company File

Airtours bid 'will be rejected'

The two companies are among the UK's top tour groups

Airtours' bid to take over First Choice and create the UK's largest holiday group will be rejected by European competition watchdogs, a European Commission official said.

Airtours made a hostile £852m bid for First Choice earlier this year, but allowed it to lapse after the EC began a competition investigation into it.

The company renewed the bid after making concessions to the EC believed to include selling off part of its wide-ranging business to reduce any threat to competition.

Official rejection

However, an EC official said on Friday that the concessions were "insufficient" and the bid would not be allowed to go ahead.

The official said: "The remedies offered by Airtours were insufficient and rejected by a large majority of the consultative committee."

He said the new commission would officially reject the bid at its second meeting later this month.

Airtours is the second-largest holiday company in the UK, behind Thomson, while First Choice is the fourth biggest.

Shares fall

A merger between the two would create a tour group with 30% of the UK market.

The European Commission has said it is unhappy that the merger would cut the number of major UK holiday groups to just three - reducing competition.

Prior to the Airtours bid, First Choice had agreed to merge with the Swiss travel company, Kuoni.

First Choice said it would not comment on the bid situation in the absence of a formal statement from the Commission.

First Choice shares - which had risen as high as 259 pence in May when Airtours launched its bid - fell 13p to 164p following the commission official's statement.

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