Thomas Cook eyes EU court for $900 mln windfall

BRUSSELS, Sept 5 (Reuters) - Thomas Cook (TCG.L), Europe's second biggest travel company, could win half a billion pounds ($880 million) next week if a top European Union court decides that it should be compensated for Brussels wrongly barring an industry merger.

The European Court of First Instance rules on Tuesday on whether the European Commission should pay compensation for stopping the merger of Airtours with First Choice Holidays in 1999.

Airtours later became part of the MyTravel group, which itself merged with German retail group Arcandor's (AROG.DE) travel unit last year and joined Thomas Cook. Arcandor retained a 54 percent stake in the merged company.

The Luxembourg based court, the second highest in the European Union after the Court of Justice, ruled in June 2002 that Brussels was wrong to bar the merger of MyTravel, then known as Airtours, with First Choice.

Brussels did not appeal against the ruling and MyTravel is seeking 518 million pounds ($911 million) in compensation, which would be a welcome wad of cash in an industry feeling the pinch from a downturn in the economy and high jet fuel costs.

By comparison, analysts expect Thomas Cook group to make a pretax profit of 426 million euros ($609 million) this financial year.

Thomas Cook said the damages claim relates to the costs incurred in the original bid, the profits of First Choice in the period up until June 2002, and the value of the synergies which would have been produced by combining the two businesses.

A spokeswoman for Thomas Cook declined to comment on the level of damages being pursued.

"It's up to the court to decide that. It's in their hands completely," she said.

The Court of First Instance will also rule on the Commission's refusal to allow MyTravel to see documents used by Brussels competition officials in dealing with Airtours. (Reporting by Huw Jones and Matthew Scuffham in London; Editing by Jon Loades-Carter, Greg Mahlich)