TUI AG plans to sell its stake in Hapag-Lloyd before buying the rest of TUI Travel
TUI AG wants to sell its stake in shipping group Hapag-Lloyd before beefing up its tourism business, a person close to the matter said, denying a report it could soon buy the rest of TUI Travel .
"The company is still far from that," the person, who asked not to be identified, told Reuters on Wednesday.
German daily Financial Times Deutschland had reported, citing no sources, that TUI AG's supervisory board will discuss next week whether to buy the remaining 42.5 percent of Europe's biggest tour operator, either in cash or in shares.
Shares of TUI Travel jumped 5.9 percent to 213.1 pence by 0930 GMT. TUI Travel's stock has lost more than 20 percent of its value so far this year, pummelled by fallout from the global economic crisis and government budget-cutting measures.
TUI AG shares rose 2.3 percent to 8.139 euros.
The source said that TUI will focus first on selling its stake in container shipping company Hapag-Lloyd before tackling other major projects.
TUI had until a few years ago two main businesses, tourism and shipping. Then, in 2007, it merged its travel operations with Britain's First Choice and floated a minority stake in the new business on the London Stock Exchange.
A year later it agreed to sell a majority of Hapag-Lloyd, the world's fifth-largest container shipping company, to the Albert Ballin consortium of investors and focus on tourism.
But the financial crisis derailed the deal. TUI ended up keeping a larger than planned 43 percent stake in Hapag-Lloyd, which it aims to divest at some point.
A spokesman for TUI AG confirmed that the German company's supervisory board is due to meet next week.
He said the board had already asked management in October 2008 to examine options to expand the tourism business.
"TUI AG's desire for TUI Travel is clearly well known. The key to unlocking that is Hapag-Lloyd," said Nick Batram, analyst at KBC Peel Hunt Leisure.
TUI Chief Executive Michael Frenzel this year indicated that funds from the sale of the Hapag-Lloyd stake could be put into the tourism business.
The source said options for Hapag-Lloyd include a sale to a private equity company or a strategic investor -- such as one or several members of the Albert Ballin consortium -- or an initial public offering.
No decision has been made yet, the person said.
"The company is still far from that," the person, who asked not to be identified, told Reuters on Wednesday.
German daily Financial Times Deutschland had reported, citing no sources, that TUI AG's supervisory board will discuss next week whether to buy the remaining 42.5 percent of Europe's biggest tour operator, either in cash or in shares.
Shares of TUI Travel jumped 5.9 percent to 213.1 pence by 0930 GMT. TUI Travel's stock has lost more than 20 percent of its value so far this year, pummelled by fallout from the global economic crisis and government budget-cutting measures.
TUI AG shares rose 2.3 percent to 8.139 euros.
The source said that TUI will focus first on selling its stake in container shipping company Hapag-Lloyd before tackling other major projects.
TUI had until a few years ago two main businesses, tourism and shipping. Then, in 2007, it merged its travel operations with Britain's First Choice and floated a minority stake in the new business on the London Stock Exchange.
A year later it agreed to sell a majority of Hapag-Lloyd, the world's fifth-largest container shipping company, to the Albert Ballin consortium of investors and focus on tourism.
But the financial crisis derailed the deal. TUI ended up keeping a larger than planned 43 percent stake in Hapag-Lloyd, which it aims to divest at some point.
A spokesman for TUI AG confirmed that the German company's supervisory board is due to meet next week.
He said the board had already asked management in October 2008 to examine options to expand the tourism business.
"TUI AG's desire for TUI Travel is clearly well known. The key to unlocking that is Hapag-Lloyd," said Nick Batram, analyst at KBC Peel Hunt Leisure.
TUI Chief Executive Michael Frenzel this year indicated that funds from the sale of the Hapag-Lloyd stake could be put into the tourism business.
The source said options for Hapag-Lloyd include a sale to a private equity company or a strategic investor -- such as one or several members of the Albert Ballin consortium -- or an initial public offering.
No decision has been made yet, the person said.
