Tui AG has confirmed its intention to de-list from the London Stock Exchange (LSE). This move aligns with the company’s strategic shift towards the Frankfurt Stock Exchange.
The decision, driven by shareholder feedback and market analysis, will be voted on at the upcoming Annual General Meeting (AGM) in February 2024. If approved, the de-listing will occur in June 2024.
Strategic Shift to Frankfurt Stock Exchange
Tui AG has declared its plans to transition from the London Stock Exchange to the Frankfurt Stock Exchange, targeting the ‘Prime Standard’ market and top-tier MDAX index. This change was initially hinted at in December when the company released its annual results. The shift is influenced by a significant migration of trading activities from the UK to Germany. Approximately 77% of share transactions are now conducted directly via the German share register, leaving less than a quarter of trading in Tui shares in the form of UK depositary interests.
According to Chief Financial Officer Mathias Kiep, this strategic move is expected to enhance liquidity and simplify corporate structures. Kiep noted, “Terminating the listing in London would offer clear advantages for investors and the company, including the simplification of structures, improvement in liquidity and indexation, and benefits for the EU ownership of our airlines.”
Shareholder Feedback and Approval Process
The proposal to de-list from the LSE will be put to a shareholder vote at Tui AG’s Annual General Meeting on 13 February 2024. The company has emphasised that this decision was heavily influenced by shareholder suggestions and extensive discussions.
“We have followed the suggestions of our shareholders and have held extensive discussions,” stated Mathias Kiep. The aim is to align more closely with shareholder preferences and market dynamics by consolidating trading activities on the Frankfurt Stock Exchange.
Implications for Corporate Structure
The de-listing will also signal the end of Tui AG’s corporate ties with the UK. Dave Burling, the last remaining UK member of the executive board, will step down by the end of the year. This marks a significant shift in the company’s leadership structure.
The company expects to benefit from improved liquidity and a more unified corporate structure. The changes are also anticipated to support the EU ownership requirements for Tui’s airlines, streamlining regulatory compliance and operations.
Timeline and Next Steps
If the proposal is approved at the AGM, Tui AG aims to transition to the Prime Standard segment of the Frankfurt Stock Exchange around 8 April 2024.
The consequential inclusion in the MDAX index is targeted to coincide with the LSE de-listing in June 2024. This timeline reflects Tui AG’s strategic efforts to realign its market presence and optimise shareholder value.
Financial Performance and Market Position
The decision to de-list from the LSE comes in the wake of Tui AG’s assessment of its market positioning and shareholder distribution. The company has been actively communicating with shareholders to ensure that the transition aligns with their interests.
This move is part of a broader strategy to enhance the company’s financial performance and market competitiveness. The shift to Frankfurt is expected to offer a more robust trading environment, reflecting the company’s significant business activities in Germany.
Executive Commentary
Chief Financial Officer Mathias Kiep has reiterated the strategic advantages of the de-listing. “In the best sense of an Annual General Meeting, it remains the decision of our shareholders,” Kiep remarked, emphasising the participatory nature of the decision-making process.
The executive team has highlighted that the de-listing will streamline corporate operations, improve liquidity, and enhance market indexation, ultimately benefiting investors and aligning with the company’s long-term strategic goals.
Market Reactions
The market has shown a mixed reaction to the announcement. Some analysts have noted the potential benefits, including improved liquidity and operational efficiency, while others have raised concerns about the implications for UK-based shareholders.
Tui AG remains confident that the move will ultimately serve the best interests of the company and its investors, simplifying its corporate structure and focusing trading activities on the Frankfurt Stock Exchange.
The confirmation of Tui AG’s plan to de-list from the London Stock Exchange marks a significant strategic shift for the company. This move, driven by shareholder feedback and market conditions, aims to enhance liquidity and streamline corporate operations.
With the transition to the Frankfurt Stock Exchange, Tui AG seeks to better align its market presence with its business activities. The de-listing, pending shareholder approval, is set to take place in June 2024, signalling a new phase in the company’s evolution.
