Ta-ta, Tui? Europe’s largest tour operator, Tui, is contemplating delisting from the London stock market and flying solo in Germany instead. Is this another hammer-blow to the UK market – on top of BHP Billiton (gone to Australia), Arm Holdings (opted to list in the US), Ferguson (an escaper to the US) and all the rest?
Well, it’s obviously not terrific news for London that a FTSE 250 firm with a dual listing could choose to simplify trading in its shares elsewhere. But let’s have a sense of perspective on this one. Outbound tourism from the UK may be Tui’s most important market, but the firm itself has felt increasingly German, corporately speaking, for a while.
The unescapable fact is that Tui has been headquartered in Germany since the grand merger of Tui Travel (which grew out of the old UK firm First Choice) and its German parent Tui AG almost a decade ago. When the Covid pandemic clobbered the travel market, it was the German state that propped up the company with emergency loans and state aid.
It is thus no surprise to hear that three-quarters of the company’s shares are now held or registered in Germany and that the weight of trading in the stock has shifted there. It is on that basis that Tui says “certain shareholders” have asked it to study whether a dual-listing model is still “optimal and advantageous”.
If the conclusion is suboptimal and disadvantageous, nobody should be surprised. Two listings means extra expense and hassle. You wouldn’t create today’s setup if starting from scratch. What’s more, said Tui, a Germany-only listing might make it easier to meet European Union rules on airline ownership – but, since it is already able to do so, that’s a secondary issue. The primary consideration is liquidity and existing ownership profile.
A 75% majority of votes is needed to delist in London, so if UK patriots exist in sufficient numbers, they can organise themselves to resist if they wish. Their task would presumably be made marginally easier by virtue of the fact that the 11% holding of Russian tycoon Alexei Mordashov remains frozen under sanctions laws.
None of which is to deny that the London stock market lacks fizz, freshness and the deep pools of liquidity of the US. Stamp duty of 0.5% on share purchases, versus zero in the US, doesn’t help. Nor does the dire performance of so many recent arrivals. Nor do the efforts of the London Stock Exchange Group to rebrand itself as LSEG and talk in an American accent about data and AI, rather than share trading, which these days is just 3% of its revenues.
But there’s still no need to force-fit Tui into the gloomy script. In recent years, Shell, Unilever (after unnecessary huffing) and the data publisher Relx all unified in London. That’s three top-10 FTSE 100 firms, so London is still capable of winning the dual-listing tussles that matter. Miner BHP, another biggie, chose a primary listing in Sydney, but it was always obviously an Australian company. Similarly, the exit of Tui would not be a disaster. The real problem is the dearth of interesting UK startups and UK money willing to back them. That puzzle, sadly, is harder to solve than the technical listing question at a package holiday operator.
