First Choice and rival MyTravel have both instructed longstanding counsel Herbert Smith and Slaughter and May on preliminary talks for a potential tie-up worth £500m.
Herbert Smith’s and Slaughters’ instructions are a recreation of 1999, when MyTravel’s predecessor Airtours made a £852m hostile takeover bid for First Choice. Both firms acted on this.
Addleshaw Goddard, however, also a favoured firm of MyTravel, and which advised on the 1999 bid, has not been instructed. In 1999, corporate head Paul Devitt led the corporate advice, while Slaughters advised on competition issues.
On the current talks, Herbert Smith’s corporate partner David Paterson and head of competition Jonathan Scott are leading for First Choice. Both are relationship partners for First Choice, and led on the defence team in 1999.
Corporate finance partner William Underhill is leading the Slaughters team for MyTravel with competition head Malcolm Nicholson and corporate finance partner Roland Turnill. Nicholson advised on the sizeable competition aspects of the 1999 bid.
European authorities disallowed that bid on mergercontrol grounds, although the decision was overturned in 2003, causing MyTravel to seek £518m in compensation.
This time, MyTravel wants to buy First Choice’s main package holiday operation, leaving First Choice to concentrate on specialist breaks.
First Choice has confirmed it has entered into discussions on a takeover with a number of parties, with MyTravel the only bidder to have officially announced its interest so far.