TUI’s Hapag-Lloyd Exit Stalled as Hamburg Sued Talks Stop

TUI AG (TUI1), Europe’s largest tour operator, may pursue an initial public offering of its stake in Hapag-Lloyd AG after talks to merge the container-shipping business with Hamburg Sued collapsed, analysts said.

Oetker Group, which owns Hamburg Sued, asked for merger talks that began in December to be halted after the parties were unable to agree terms for a tie-up, Hapag-Lloyd said in a statement yesterday. Hamburg Sued said today that it considers talks on a combination as suspended.

“TUI could trigger an IPO,” Jochen Rothenbacher, an analyst at EquinetBank in Frankfurt with a buy recommendation on the travel company, said in a note. With the container-transport market “still difficult, TUI might wait for a recovery there.”

TUI, which owns 22 percent of Hamburg-based Hapag-Lloyd, Europe’s fourth-largest container line, is seeking an exit as it focuses on the travel industry. The merger discussions with Oetker, a family-owned German holding company with food production and banking assets, and Hamburg Sued were considered the most likely route.

Chief Executive Officer Friedrich Joussen, who took over at Hanover, Germany-based TUI last month, said on March 13 he planned to proceed with a withdrawal from Hapag-Lloyd after reviewing the business.

TUI fell 1.2 percent to 8.09 euros at the close in Frankfurt. That pared the stock’s gain this year to 3.1 percent, valuing the tour operator at 2.04 billion euros ($2.63 billion).

Merger talks were temporarily interrupted and Hamburg Sued remains convinced a combination with Hapag-Lloyd would be beneficial, the shipping company said today in a statement. Hamburg Sued also would have no objections to an IPO of the combined business, it said.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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