Merger stings shareholders and staff
Comment by Jeremy Skidmore (www.jeremyskidmore.com)
The merger of Thomas Cook and MyTravel provided an example this week of how it’s possible for shareholders and staff to lose out at the same time.
Peter McHugh, the outgoing chief executive of MyTravel, has by common consent done a marvellous job turning the company round and satisfying the banks.
However, it is often forgotten how royally stuffed were the shareholders of the company formally known as Airtours. For the man in the street with a small number of shares, it really wouldn’t have made much difference had Airtours gone bust. A reminder of this has just popped through the letter box.
One contact I know had shares in Airtours which were once valued at around £3,000 before that unfortunate incident with the accounts. This week she received a certificate for 18 shares in the new company. It’s actually worth more than the paper it’s printed on, but there’s not a great deal in it. Let’s hope that people buying shares in the new company will have more luck.
At the same time we hear that as many as 2,800 jobs are likely to go in the new company, a figure that has shocked the transport unions.
I know chief executive Manny Fontenla Novoa and believe he is a decent man who will take no pleasure in putting people out of work.
But he’s paid to make these decisions and with rampant overcapacity in the market and bookings down, I’m afraid it is probably the right one.
Meanwhile, that most solid of companies, Kuoni, has suddenly turned into a journalist’s dream.
First of all it announces that managing director Sue Biggs has stepped down but refuses to say why. This is a huge PR gaffe. Biggs is well respected and I have no inside knowledge about why she has gone, but this kind of statement just leads everyone to assume that she was less than happy with the decision.
If there is a big split, you use money to smooth it over so that the reputation of both parties remains in tact. When I left Travel Weekly after a series of disagreements over editorial policy, it was by mutual consent, although some might say it was more a case of being sacked by mutual consent.
To compound the matter, Kuoni announced it had established new divisions called Style, Smart and Spirit.
Like the London Olympics logo (although hopefully not as expensive), this is the kind of marketing nonsense that reduces journalists to tears of laughter. Of course, we are the only ones rude enough to say so, while everyone else tells the emperor how nice his new clothes are.
Kuoni is usually such a sensible, solid performer, it makes you cringe in the same way as if you were watching your Dad strut his funky stuff at the school disco.
If you are a good business (which Kuoni always has been), you simply don’t need to resort to these ludicrous labels.
Hopefully, normal service will soon be resumed and we’ll get back to receiving sensible market reports and comments from one of the UK’s best loved long haul operators.
Jeremy Skidmore
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