Business and City In Brief: Share sale dents Airtours bid

Airtours suffered a further setback in its bid for Owners Abroad, the travel company, when one of its largest shareholders sold its Airtours stake at a discount to the market price.

Equitable Life, the insurance company, sold 5.75 million shares - 6.7 per cent of the company - to Morgan Grenfell at 260p a share against a market price of 290p. Airtours shares closed 3p down at 288p.

An Airtours source said he believed Equitable Life sold the shares because it did not want to be involved in Owners Abroad, even through the medium of Airtours. But the news was a blow to Airtours, coming amid reports that it had had problems with the underwriting of its share offer.

The bid battle showed signs of developing into a fierce contest, with rumours damaging to both sides flying around the market. Owners Abroad denied suggestions that LTU, the German parent company of Thomas Cook, was about to walk away from its proposal to take a 10 per cent stake in Owners through Cook. It was suggested that LTU was considering a tie-up with Club Med.

An extraordinary meeting called by Owners to debate the proposal was adjourned in the light of the bid from Airtours.

David Crossland, Airtours chairman, said: 'I am delighted that the shareholders of Owners Abroad will now be given the opportunity to consider the Airtours offer for their shares.'

Hamish Dickson, analyst at Hoare Govett, said: 'I think the majority of Airtours shareholders are happy with the deal.'