The offices of London Stock Exchange Group Plc, right, in Paternoster Square within the City of London, UK.
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LONDON — TUI became the newest company to ditch its share listing in London, as shareholders voted overwhelmingly for the German travel giant to list solely in Frankfurt.
The Hannover-headquartered group’s investors voted 98.35% in favor of moving the portion of its shares traded on the London Stock Exchange‘s FTSE 250 to Frankfurt’s MDAX, with the transfer expected to occur on June 24.
TUI has a dual listing between the 2 cities, but said in an announcement Tuesday that the corporate was approached by various investors last 12 months questioning whether this was still optimal, given changes within the ownership structure of the corporate’s shares and a “marked shift in liquidity from the U.K. to Germany.”
Around 77% of transactions in TUI shares are currently settled via Germany, with the U.K. now accounting for lower than 1 / 4.
“Lots of the liquidity, the volumes, already for quite a while went from the trading line within the U.K. to the trading line in Frankfurt, so on the back of this, we were actually approached last summer by shareholders,” TUI Chief Financial Officer Mathias Kiep told CNBC on Wednesday.
“Lots of comments were about if we were to go to Frankfurt, one, liquidity could be in a single pool only. The opposite point was that so much said ‘you then are more outstanding within the MDAX than where you might be today within the FTSE 250,’ and there have been also some comments that [the U.K.] could possibly be a tougher market environment today.”
U.K. stocks are trading at a substantial discount to the remainder of Europe, having suffered an investor flight lately. The country’s blue chip FTSE 100 index is down almost 5% over the past 12 months, in comparison with a 5% increase for the pan-European Stoxx 600.
London still a contender
London has also suffered a lot of de-listings and high-profile IPO snubs over the past 12 months. The variety of applications to list within the Square Mile fell to a six-year low in 2023, based on data obtained by investment platform XTB late last 12 months and reported in several U.K. media outlets.
British semiconductor and software design firm Arm, owned by Japanese investor SoftBank, notably opted last 12 months to list on Latest York’s Nasdaq, together with a lot of other tech firms, despite efforts from Prime Minister Rishi Sunak’s government to steer the corporate to list in London.
“It is vitally disappointing to see one other company leave the Primary Market of the LSE, following multiple takeovers and de-listings last 12 months, and with firms akin to Arm turning to NASDAQ for IPO,” Melanie Wadsworth, partner at international law firm Faegre Drinker, told CNBC on Tuesday.
“Nonetheless, I can understand the rationale behind this proposal, provided that TUI’s headquarters is in Germany and only roughly 22% of its trading in 2023 took place via the U.K. market. I might due to this fact hope this decision is driven by aspects specific to TUI, relatively than being indicative of a trend.”
Tom Bacon, partner at global law firm BCLP, said it was comprehensible for some to point to the TUI de-listing as one other example of firms moving away from London, but agreed that it was essential to think about the specifics of TUI’s case.
“Very like other recent examples, there are specific reasons for this decision related to the legacy merger of TUI Travel plc and TUI AG in 2014,” Bacon said via email Tuesday.
“On various metrics, London stays the biggest exchange in Europe and has actually faired higher in 2023 when it comes to activity than the opposite European exchanges like Frankfurt, Paris and Amsterdam.”
