Tui considers delisting from London

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Europe’s largest tour operator Tui is considering delisting from the London Stock Exchange in the latest blow to the UK market.

The company, which has a dual listing in London and Frankfurt, said on Wednesday that it had recently been approached by some shareholders to “discuss and understand” whether its current listing structure is “optimal and advantageous”.

Tui said that over the past four years a large part of the volume of trading in its shares had migrated from London to Frankfurt. The company has been dual listed since it was formed out of a 2014 merger of British tour operator Tui Travel and its German parent Tui AG.

Potential benefits of moving to a single listing in Germany would include a more prominent position on Frankfurt’s MDAX50 index, cost savings, providing a clearer investment profile and “potential benefits to European Union airline ownership and control requirements”, the group said.

Ivor Jones, an analyst at Peel Hunt, said Tui’s potential listing change would “feed into the ongoing debate about the fall of liquidity in London . . . and the net withdrawal of investment in UK equities”.

The UK capital has suffered from a steady flow of companies opting to list elsewhere or switch their primary listing to other markets, particularly the US, in search of high valuations and deeper pools of capital.

Dublin-based packaging company group Smurfit Kappa is switching its primary listing to the US and Dublin-based gambling giant Flutter is expected to follow suit after announcing that it will launch a secondary listing in the US early next year. Earlier this year, UK polling company YouGov said it was weighing a US listing, in a further blow to London equity markets.

Tui, which has a market capitalisation of €3bn, stressed that no decision had yet been made, and that a motion on the delisting could be presented to its annual general meeting in February next year. The motion would require 75 per cent of shareholder approval to pass.

Richard Clarke, an analyst at Bernstein, said the dual listing was “a quirk of history”. “If you were creating Tui from scratch, there’s no way you would list it on two exchanges,” said Clarke.

Adding to evidence that the post-pandemic travel boom is continuing, despite stubborn inflation and high interest rates, Tui posted underlying earnings before interest, taxes, depreciation and amortisation of €977mn for the year to the end of September, adding that it expects ebitda to grow by 25 per cent next year.