Thomson issue promises perks for the people

Founder shareholders will be entitled to holiday discounts and airline upgrades. Clifford German reports

INVESTORS with an appetite for perks will be able to join the Thomson Travel Group Founders' Club and get 10 per cent off all holidays in Thomson and Skytours brochures from 1 May 1999, if they buy shares in Thomson Travel when the firm founded by the late Roy Thomson floats on the London stock market next month.

Most of the shares will actually be sold to institutional investors in the UK, Canada and the US, while 20 per cent will be kept by the Thomson family interests and only 10 per cent of the issue will be reserved for the general public.

It is the first new issue to offer perks to small investors since Thistle Hotels offered investors a discount on their bills in Thistle hotels in 1996, while more recently Railtrack and British Energy offered shares at a discount for small investors.

Anyone who is interested in applying for shares has first to register with a share shop run by Barclays Stockbrokers, NatWest Stockbrokers, the Skipton Building Society, Bristol-based stockbrokers Hargreaves Lansdown, or the Share Centre, one of the discount brokers which specialises in low-cost dealing charges. According to its chief executive, Gavin Oldham, its minimum charge for selling shares is just pounds 7.50.

The minimum investment will be pounds 500, which will be worth an average of pounds 50 off holidays and a family group could save an average of pounds 120, according to Thomson Travel. There will be no discount on the price of Thomson shares in the public offer. But, while they retain a minimum shareholding, investors will remain entitled to 10 per cent off Thomson holiday offers for life, 10 per cent off the brochure price of Holiday Cottages Group holidays, airline seat upgrades (where available) when using Britannia aircraft, best room allocations (where available) on Thomson holidays, an additional luggage allowance, and a regular newsletter.

For regular holiday-makers especially with families, that alone is likely to make a shareholding look attractive, although the actual price of the shares and therefore the value of the dividends has not yet been fixed. The perks will only be available to founder shareholders and will not be transferable when the shares are sold.

Applying for shares in a new issue is a cheap way to get shares because applicants do not have to pay dealer's charges or commission. They do run the risk that if they apply for more than they really want and for some reason business confidence collapses after the applications close, investors could end up with more than they really want and find the price falls back as soon as trading actually starts.

If, however, the issue proves too popular and the offer is over-subscribed, they may get substantially less shares than they asked for. At worst they could get no shares at all if the demand is so great that applications for small numbers of shares would have to be scaled down to amounts which are not economic to trade in.

But Thomson has said that if it has to cut small shareholders back to less than pounds 500 worth of shares, the minimum holding will still qualify them for the travel perks, and the company is unlikely to want to disappoint potential customers by rejecting all applications for the minimum amounts on offer.

q To register for an application form (with no obligation to buy), ring Barclays Stockbrokers on 0800 400401, Hargreaves Lansdown on 0500 404055, NatWest Stockbrokers on 0800 210217, Skipton Building Society on 0800 1380800, or the Share Centre on 0500 41144.