In latest snub to London, travel firm TUI flies to Frankfurt

TUI AG

14/02/2024 05:30

By Danilo Masoni and Naomi Rovnick
       MILAN/LONDON, Feb 14 (Reuters) - TUI  TUI1n.DE  has
become the latest company to ditch the London stock market,
which is struggling to retain big companies and attract new
share offerings, after shareholders of Europe's biggest travel
agent voted to move its listing to Frankfurt.
    The go-ahead at Tuesday's annual general meeting to focus on
a Frankfurt listing comes two weeks after London-listed gambling
firm Flutter  FLTRF.L  said it would propose moving its primary
listing to New York at its shareholder meeting in May.
    TUI also reported far better-than-expected quarterly results
as it swung to a profit on the back of robust travel demand.
    Other big firms have also left London in recent years, or
are considering leaving, under pressure from investors seeking
to boost the value of their shareholdings following
Brexit-related complications that have squeezed UK market
valuations.
    "We see a lot of dissatisfaction among management of UK
companies that are continuing to grow and where their share
prices just don't reflect that," said David Stevenson, who
manages portfolios of small- and mid-cap UK companies at Amati
Global Investors in Edinburgh.
    "It's tough love for many companies (listed in London). Some
grumble about it, some vote with their feet, and it's not a
healthy environment at all," he said. 
    According to LSEG data, UK stocks are currently 35% cheaper
than their global peers, almost the widest gap in more than
three decades. Before Britain's vote to leave the European Union
in 2016, the UK market commanded a slight premium. 
    The UK market for initial public offerings has also been
slow in the last year. British chip maker ARM Holdings  ARM.O 
opted to list in New York and since its September flotation its
shares have trebled. British commodities broker Marex Group also
plans to list in New York rather than London.
    Against this backdrop, UK regulators have begun tweaking
EU-designed rules to try to boost London's global
competitiveness, including listing rules and what insurers can
invest in. But financial leaders have called for faster
progress.     
    TUI has said its delisting from the London Stock Exchange is
expected in June. That would pave the way for an upgrade of its
Frankfurt listing to the Prime Standard market segment and
inclusion in the mid-cap MDAX  .MDAX  index. Its shares were
highly volatile on Tuesday but ended little changed in Frankfurt
and London, keeping their one-year declines at over one third.
Over 98% in the shareholder vote backed the London delisting.
    A growing number of UK-listed companies are favouring a U.S.
listing, where valuations can be higher. 
    Building materials company CRH  CRH.N  moved its primary
listing from London to New York in September, and the year
before plumber Ferguson  FERG.L  left the FTSE 100  .FTSE .
    The London market has shrunk in recent years. The FTSE
All-Shares  .FTAS  index has a market capitalisation of $2.8
trillion, down almost 20% from June 2015, the year before the
Brexit referendum, according to LSEG data. 
    Paris, Europe's largest stock market by value, is worth
around $3.4 trillion and has grown by nearly 50% in that time. 

 (Reporting by Danilo Masoni in Milan and Naomi Rovnick in
London Additional reporting by Joanna  Plucińska
Editing by Amanda Cooper and Mark Potter)
 ((Danilo.Masoni@TR.com; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net))