Holiday giant Tui considers ditching London stock market listing

 (PA Archive)
(PA Archive)

Holidays giant Tui could be the latest firm to pack up and leave the City, revealing today that it’s considering delisting from the London Stock Exchange.

The departure would be a major blow to London, coming on the heels of a number of other high-profile snubs and exits this year.

Tui, which is also listed in Frankfurt, said a single listing there would provide “a clearer investment profile”, and allow it to become part of German mid-cap index the MDAX. The MDAX has outperformed the FTSE 250 in 2023 and over the last 15 years.

In the last four years, Tui said it has seen “a notable liquidity migration from UK to Germany”, and shareholders have recently expressed views favouring a single listing in Frankfurt.

The travel firm added that there were also “potential benefits” on EU airline ownership rules, which say carriers must be at least 51% EU owned. A quarter of Tui shares are held in the US, more than 10% in the UK and a further 9% between Norway and Switzerland.

It noted that “no decision has been taken”, but it was considering putting a motion to delist on the agenda for its 14 February AGM. The motion would require 75% shareholder approval to pass.

Tui is the latest in a long line of firms to consider ditching the City or choosing to IPO elsewhere, but most have chosen New York rather than Frankfurt.

Chip–maker Arm was the most high-profile snub. Despite lobbying from Rishi Sunak, Arm’s parent company SoftBank opted to list the shares on the Nasdaq instead of in London.

Building materials supplier CRH and betting firm Flutter revealed plans to list in New York within the space of two weeks in the spring. Packaging giant Smurfit Kappa is set to join them after merging with a US firm, while miner Glencore plans to list its coal unit in New York when it’s spun out of the wider business.

Pollster YouGov and trading platform Plus500 have also revealed they’re looking at plans to sell their shares in the US instead of London.

Analysts have noted UK stocks appear to be undervalued compared to peers elsewhere.

Victoria Scholar, head of investment at Interactive Investor, said: “This would be a major blow to the LSE which has been grappling with an exodus of companies as well as the weak performance for London-listed stocks.”

But the grass hasn’t always been greener for firms that have listed elsewhere. Many high-profile British companies that have floated in the US, such as Cazoo, Paysafe and Babylon Health, have seen their share prices crash by more than 90%.

Today, Tui also reported its profits grew to €1.15 billion (£990 million) in the three months to 30 September, as revenue climbed to €8.5 billion. It said this was mostly driven by higher prices, with customers willing to pay more for holidays even as they cut back elsewhere.

Steve Clayton, head of equity funds at Hargreaves Lansdown, said: “If you wondered why your last holiday was so expensive, and you booked with Tui, well now you know.

Tui added that the conflict in the Middle East has only led to “a temporary slight slowing of bookings”, and expects revenue and profits to increase further next year.

The shares gained 50 cents, or 8.5%, to €6.45.