Kuoni Surges Most in 12 Years as Revamp Spurs Takeover Talk

  • Swiss company to eliminate 350 jobs, replaces CEO, CFO
  • Plan to end limits on voting rights spurs takeover speculation

Kuoni Reisen Holding AG rose the most in 12 years after announcing a management shakeup, job cuts and a proposal to eliminate voting-rights limits that analysts said would make the Swiss tourism company easier to take over.

Chief Executive Officer Peter Meier has been replaced by Zubin Karkaria, 47, the head of Kuoni’s fastest-growing and most profitable unit, the Zurich-based company said in a statement on Thursday. Kuoni also said it will propose shareholders vote to end voting-rights restrictions next year. The shares jumped as much as 11 percent, the steepest intraday gain since July 2003.

Zubin Karkaria

Source: Kuoni Reisen Holding AG

Chairman Heinz Karrer is accelerating a plan to turn Kuoni around by focusing on services for the professional travel industry and governments and eliminating about 350 jobs at Kuoni’s GTS group travel division. The end of the restrictions on voting rights is the “key change” and would make it easier to take over Kuoni, whose shares have lost a fifth of their value this year, according to Jean-Philippe Bertschy, an analyst at Bank Vontobel AG.

“This could open the door to more shareholder activism, if not a takeover,” wrote Jon Cox, an analyst at Kepler Cheuvreux. He said “speculative interest” may support the stock though it’s “probably one to avoid for fundamental investors.”

The company reported a 79 percent plunge in nine-month profit from continuing operations.

Karkaria will continue to run VFS Global, a unit of Kuoni that he founded in 2001 and which provides travel visa services. Prisca Havranek-Kosicek, who has been group treasurer at Dutch vitamin maker Royal DSM NV, will become chief financial officer in the first quarter of 2016.

The company plans to complete the sale of its Asian tour-operating business in the fourth quarter after divesting a similar unit in Europe earlier this year. Kuoni said it plans to overhaul GTS “extensively,” leading to a one-time charge of 20 million francs ($20 million) in 2015.

Kuoni also said it formed an alliance with HNA Group, a Chinese tourism company, to develop outbound travel from that market.

The shares were up 9.3 percent at 235 francs at 11:28 a.m., giving the company a market value of 940 million francs.

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