TRAVEL giant Airtours has revealed that the bidding battle for its smaller rival First Choice Holidays had wiped £2.8million off its profits.

Airtours, which employs more than 1,200 at its Helmshore and Accrington sites, launched a hostile £950million takeover bid for First Choice earlier this year after the package holiday group had agreed to a link up with Swiss company Kuoni.

However Airtours was forced to withdraw its offer in June after the European Commission launched a competition inquiry into the deal.

But it still stands a chance of making a new bid for First Choice following Kuoni's withdrawal from the bidding war last month after its offer attracted support from shareholders representing just 30 per cent of First Choice. Releasing its third quarter profits results, Airtours said that the bidding battle had so far cost it £2.8million. As a result, profits before tax for the three months to June 30 had dipped to £20.5million, down from £24.6million at the same time last year.

Excluding the bidding costs, tax and goodwill amortisation, Airtour's profits for the period were still down, falling to £23.6million from £24.6million.

Turnover, including the group's share from joint ventures, rose by £152.1million to £970million.

Chairman David Crossland said trading conditions in the UK and Canada had been difficult during the quarter.

Airtours' Canadian businesses had produced an "unsatisfactory" performance and the group was now planning to launch a strategic review of its entire North American operations, he said.

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