Airtours to raise pounds 80m to purchase SAS Leisure

THE STOCK market is expecting an pounds 80m-plus rights issue from Airtours to help fund the purchase of SAS Leisure of Sweden and a cruise ship from Norway, writes John Shepherd.

There is also speculation that David Crossland, chairman of Airtours, will not take up his full rights entitlement. This is not only because of the cost but also because of a plan to improve liquidity in the tightly controlled stock.

He owns 32.5 per cent of the ordinary shares, and holds sway over voting rights on a further 8.7 per cent attached to 9 million shares owned by another investor. Airtours shares fell 14p to 466p yesterday.

Rumours have been circulating for several weeks in the leisure industry that Airtours, the second-largest tour operator in the UK behind Thomson, was buying SAS Leisure.

It is understood to be paying about pounds 80m for the Scandinavian company, which lost pounds 17m last year. The cruise ship would cost a further pounds 16m. Confirmation of the deals may be made by the weekend.

Besides tour operations, SAS Leisure has 14 hotels in Sweden, the Canary Islands and Gambia. It owns 50 per cent of two charter airlines - Spanair and Premair.

The cruise ship purchase has caused surprise among investors, although Airtours indicated that it wanted to diversify last year by buying a hotel in Majorca. Kloster Line, a Norwegian group, is believed to be selling the ship to Airtours.