A proposed MBO is the preferred future option for Budget's owners, German travel group TUI, according to senior management sources at the company.

"That would be the ideal scenario for us. We have always had great respect for how they ran their business, " said the TUI source.

When Budget management were asked by the Sunday Tribune if they had sought funding for an MBO, they said, "not yet".

"Everything is possible. It's business as usual for us, " said the company's head of marketing, Clem Walshe. "We have been through this before. Basically we're for sale and we are waiting to hear what happens. A management buyout has been discussed but all options are open, " he said.

Budget is conducting due diligence and is trying to establish a value on both its brand and its property portfolio, with 32 retail outlets. It has reported a "handful" of expressions of interest from industry players so far and meetings are being scheduled for the coming weeks.

The European Commission announced last week that it would be approving TUI's merger with Britain's First Choice group subject to the divestment of Budget Travel because the merger would create issues of dominance in the Irish travel agency industry.

No time frame has been put on the sale of Budget but TUI wishes to complete the process within six months.

TUI had written to the European Commission offering to sell Budget Travel but was hoping that it would not have to go that far.

"It was just a tactic on our behalf. We were hoping that if we offered them that much they would come back and say there is no need to go that far, " said the company's economics and finance spokesperson, Kuzey Esener.

"We are disappointed that we have to sell it. We were hoping for clearance without any conditions but we are confident that in time we can find a buyer for it, " he told the Sunday Tribune.

Sources are putting a value of Euro50m-Euro60m on Budget, with Club Travel and British Group Kuoni reported to be interested players.

"If the management don't buy it out it would be a good opportunity for a British group to get into the Irish market, " said one source.