Germany's top two holiday firms, Preussag and C&N Touristic, locked horns yesterday in a battle for Britain's Thomson Travel, parent of Budget Travel. Preussag, Europe's largest holiday firm, surprised the market by making a takeover approach for Thomson just as the British group was on the point of agreeing a bid from arch-rival C&N, and then started aggressively buying Thomson shares.

As the battle rapidly moved into a three-cornered fight, analysts and investors puzzled over the move which, since Preussag controls another big British tour operator, Thomas Cook, would almost certainly prompt an official inquiry.