TUI mulls London delisting in potential blow to capital’s stock exchange
TUI is considering delisting from the London Stock Exchange in favour of Germany, in what would be seen as a major blow to already embattled UK equity markets.
In a statement this morning, the company, which holds a dual listing on the London and Frankfurt Stock Exchange, said it would consider taking the company off London’s premier index if it proved to be “in the best interest of shareholders.”
“The Executive Board’s focus is to provide an attractive, long-term listing for TUI AG which aligns with its ownership and current liquidity and delivers benefits to all shareholders,” the statement read.
TUI said ownership of its shares and liquidity on the exchanges had evolved significantly with a “notable liquidity migration from UK to Germany.”
Should TUI depart the London Stock Exchange it would be seen as a significant blow to the already embattled bourse. Earlier this year Flutter, the gambling giant, completed a secondary listing in New York which many believe is the precursor to a full relocation.
And YouGov and Plus500, two staples of the London market, have also publicly considered an exit to sunnier shores.
While no decision has yet been made, the Board is considering submitting a delisting resolution at its AGM on 13 February 2024, with any move subject to 75 per cent shareholder approval.
The firm also noted advantages of inclusion on the Frankfurt Exchange and on its MDAX index, such as centralisation of liquidity and “potential benefitis to European Union airline ownership and control requirements,” which would enhance its equity profile.
The announcement came as TUI announced financial results for the 12 months to September. Revenues jumped to €20.7bn, up from €16.5bn, on soaring summer demand for travel. Underlying pre-tax earnings more than doubled to €977m.
The Hanover-headquartered firm swung to profitability for the first time since the pandemic in August but has faced a number of challenges this year.
Wildfires on the Greek Island of Rhodes wiped €25m off its bottom line in August and shares are down nearly 30 per cent in the year to date.
However, the stock responded well to today’s update. The shares traded eight per cent higher in early deals in London.