TUI Travel Gains Most in Three Months on Speculation TUI Considers Buyout
TUI Travel Plc rose the most in more than three months in London trading after Financial Times Deutschland reported that majority owner TUI AG is weighing the purchase of the shares it doesn’t already own.
The stock climbed as much as 16 pence, or 8.1 percent, to 214.1 pence, the steepest intraday gain since May 27. The shares were up 7.5 percent at 212.9 pence as of 10:51 a.m. U.K. time, valuing the company at 2.38 billion pounds ($3.66 billion).
TUI Travel is on the agenda for a Sept. 9 board meeting of TUI, where directors of the German company will also discuss options for the possible sale of TUI’s stake in the Hapag-Lloyd container line, FTD said in an e-mailed article to be published tomorrow. The newspaper didn’t say how it got the information.
TUI’s supervisory board will meet next week “to discuss options for the tourism business,” spokesman Robin Zimmermann said. TUI owns about 55 percent of the Crawley, England-based travel company. A TUI Travel spokeswoman declined to comment.
“TUI would have to pay a significant premium if it were to acquire the minority,” said Nick Batram, a KBC Peel Hunt analyst in London. He estimates a bid would need to be in excess of 250 pence a share and has a “hold” rating on TUI Travel.
TUI’s management may be looking for a way to increase the stake in TUI Travel without paying much above the current share price, CA Cheuvreux analyst Jurgen Kolb said in a note today. “One option may be a share deal in which TUI brings in assets and thereby boosts its stake in TUI Travel,” Kolb wrote.
Hapag-Lloyd
“A condition for any further development of TUI’s tourism business is the sale of the remaining stake in Hapag-Lloyd,” Zimmermann said today by phone.
TUI, which in 2008 decided to sell Hapag-Lloyd to focus on the tourism business, is still seeking a buyer for its remaining 43 percent stake in Germany’s biggest container line. TUI had net debt of 2.95 billion euros as of June 30.
TUI shares rose as much as 3.2 percent in Frankfurt and were up 24 cents at 8.20 euros as of 11:51 a.m.
To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net.
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