TUI AG decides against making TUI Travel offer
- Day after Rahul Gandhi slams PM Modi, Amit Shah condemns politics over surgical strikes
- Prohibition to stay in Bihar: SC stays Patna HC judgment setting aside liquor ban
- US says does not support declaring Pakistan a 'terrorist state'
- Talk on stage at Parrikar event: 200 killed, atom bomb vs atom bomb
- Hurricane Matthew: Haiti death toll rises to 339, deadly storm hits Florida
German travel group TUI AG has decided against an offer for the rest of its majority-owned British unit TUI Travel, saying it was not attractive at current share prices and dashing hopes of a deal to cut costs.
TUI Travel, Europe's largest tour operator, said last week it had received an approach regarding a potential nil-premium, all-share merger with the German company, which owns 56.4 percent of its shares.
TUI AG is focusing on tourism after selling a majority stake in container shipper Hapag-Lloyd, and has long been looking at a potential deal with TUI Travel to save on costs, sources close to the matter have told Reuters.
The German group said on Wednesday a share-based transaction was not attractive at current prices.
However, a person familiar with TUI AG's thinking said a merger was not completely off the cards for the future, though TUI AG first needed to become more efficient.
"The form it takes is of secondary importance. Basically, merging the two makes sense," the person said.
TUI Travel said the two companies had held detailed talks, but failed to reach an agreement, adding it was not in discussions with any other parties about being bought.
TUI Travel shares have surged 67 percent over the past six months, helped by problems at rival Thomas Cook, outperforming a 57 percent increase at TUI AG. The British-listed firm has a market value of 3.3 billion pounds ($5.2 billion) versus TUI AG's 1.9 billion euros ($2.5 billion).
At 1020 GMT, TUI AG shares were down 5.5 percent at 7.5 euros, while TUI Travel was 4.5 percent lower at 279.1 pence.
Equinet analyst Jochen Rothenbacher said a share-based deal at current rates was not in the best interests of TUI AG investors, but that another deal structure could yield benefits.
- Revealing Elena Ferrante’s identity violates her desire for privacy
- Breakdown of LoC ceasefire will make it difficult for army to control infiltration
- Academic publishers suit shows how much they benefitted from intellectual commons
- Lack of unity has prevented Sindhi nationalists from pressuring Islamabad
- India must be prepared to deal with a disease that is growing globally
- Challenge for India’s leaders is to show that strength can be blended with subtlety & deftness