The offices of the London Stock Exchange Group Plc, right, in Paternoster Square in the City of London, UK.
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LONDON – TUI became the latest company to abandon its London share listing as shareholders overwhelmingly voted for the German travel giant to list only in Frankfurt.
Investors in the Hanover-based group voted 98.35% in favor of relocating the shares traded there London Stock Exchangefrom FTSE 250 to the Frankfurt MDAX, with the transfer expected to take place on June 24th.
TUI has a dual listing between the two cities, but said in a statement on Tuesday that the company had been approached by various investors over the past year who had questioned whether this was possible given changes in the ownership structure of the company’s shares and one “Significant shift in liquidity” is still optimal from Great Britain to Germany.”
Currently around 77% of transactions with TUI shares are processed through Germany, while Great Britain now accounts for less than a quarter.
“A large part of the liquidity, the volumes, has already been flowing from the trading line in the UK to the trading line in Frankfurt for quite some time, so we were actually approached by shareholders last summer,” TUI finance chief Mathias Kiep told official Mathias Kiep on Wednesday CNBC.
“A lot of the comments were about if we were to go to Frankfurt, firstly, that the liquidity would only be in one pool. The other point was that a lot was said: ‘Then you will be more prominent in the MDAX than you are in the FTSE today.’ 250,” and there were some comments about that too [the U.K.] The market environment could be more challenging today.
British stocks are trading at a significant discount to the rest of Europe after suffering from an investor exodus in recent years. The country’s blue chip FTSE 100 index has fallen by almost 5% over the past year, compared to a 5% increase for the pan-European market Stoxx 600.
London remains a contender
London also suffered a series of delistings and high-profile IPO snubs last year. The number of applications for listings in the Square Mile fell to their lowest level in six years in 2023, according to data obtained by investment platform XTB late last year and reported in several UK media outlets.
British semiconductor and software design company Arm, owned by Japanese investor SoftBank, notably chose to list on the New York Stock Exchange last year Nasdaqalong with a number of other technology companies, despite efforts by Prime Minister Rishi Sunak’s government to persuade the company to list in London.
“It is very disappointing to see another company exiting the main LSE market after several takeovers and delistings over the last year and companies like Arm turning to the NASDAQ for IPO,” said Melanie Wadsworth, partner at international law firm Faegre Drinker said CNBC on Tuesday.
“However, I can understand the rationale behind this proposal given that TUI’s headquarters are in Germany and only around 22% of trade passed through the UK market in 2023. I therefore hope that this decision is based on TUI-specific factors rather than pointing to a trend.
Tom Bacon, partner at global law firm BCLP, said it was understandable to some that TUI’s delisting was another example of corporate exodus from London, but agreed it was important to understand the specifics of the TUI cases to be taken into account.
“Similar to other recent examples, there are specific reasons for this decision relating to the legacy merger of TUI Travel plc and TUI AG in 2014,” Bacon said by email on Tuesday.
“By various measures, London remains the largest stock exchange in Europe and has actually performed better in terms of activity in 2023 than the other European stock exchanges such as Frankfurt, Paris and Amsterdam.”
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2024-02-14 11:41:57
www.cnbc.com
