THOMSON Travel Group is considering a tie-up with Kuoni, according to City sources.
Thomson is believed to be vulnerable for a merger or a takeover after issuing a profits warning and parting with chief executive Paul Brett.
Kuoni's proposed merger with First Choice collapsed last month but the Swiss company is still keen to forge alliances with major players and a deal with Thomson would be mutually beneficial.
Both have a reputation for quality and a tie-up would give Kuoni distribution in the UK and strengthen Thomson in Europe.
The City also believes Kuoni UK chairman and managing director Peter Diethelm would add valuable experience to the mass-market leader.
Thomson and Kuoni were first linked by the City three months ago (Travel Weekly May 3). Both companies declined to comment.
The tie-up speculation emerged as Thomson began its search for a new chief executive. Chief operating officer Roger Burnell has temporarily taken over Brett's responsibilities and is the only internal candidate.
But like Brett, Burnell is a Thomson veteran of more than 20 years and is thought unlikely to make fundamental changes. Instead, the City would prefer First Choice group managing director Peter Long.
"Roger is a strong candidate but this is a major issue for the company and the board want to be thorough," said a Thomson spokesman.
"Roger is highly regarded within and outside of Thomson and is known and liked by the City. He has been a Thomson employee for 24 years and far from acting against him, that could work in his favour." A decision is not expected for at least three months. Thomson is pushing ahead with the launch of a budget brand despite reviewing capacity levels for 2000.
Meanwhile, First Choice sales director John Wimbleton dismissed Thomson claims that poor summer bookings were industry-wide and Sunworld managing director Simon Vincent said the summer was progressing strongly.
Airtours declined to comment.
n Brett aftermath, page 2; Analysis andComment, page 6
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