A take-over of the First Choice tour operator - which owns the Falcon/JWT Holidays business in Ireland - is expected to emerge following an initial approach from Kuoni of Switzerland aimed at creating a £1.5 billion European holiday group.

Merger talks between First Choice and Kuoni are at "an advanced stage" and detailed terms of the get-together are due to be published shortly. Kuoni shareholders are expected to end up with 53 per cent of the merged group, with First Choice shareholders taking the minority.