London again loses listing opportunity, but analysts wary of ditching UK | Private Equity Weekly

LONDON — TUI has become the latest company to abandon a London listing, with shareholders voting overwhelmingly for the German travel giant to list solely in Frankfurt.

Investors in the Hannover-based group voted 98.35% in favor of transferring some of their shares traded on the New York Stock Exchange. london stock exchangeThe conversion of the FTSE 250 index to the Frankfurt MDAX index is expected to take place on June 24.

TUI Group is dual-listed between the two cities but said in a statement on Tuesday that it had been approached by multiple investors last year in light of changes in the company’s share ownership structure and “significant changes in liquidity” , questioning whether this is still the best option. From England to Germany. “

Currently, about 77% of TUI shares’ transactions are settled through Germany, with the UK currently accounting for less than a quarter.

“A significant amount of liquidity and trading volume has been moving from the UK trading line to the Frankfurt trading line for quite some time, so we were actually approached by shareholders last summer,” TUI’s finance chief said on Wednesday. Police officer Mathias Kiep told CNBC.

“A lot of the comments were about if we go to Frankfurt, one, the liquidity will only exist in one pool. The other thing is, a lot of people say ‘then you have a more prominent position in the MDAX than you have in the FTSE today.’ 250 ”, and there were some comments that today’s market environment (in the UK) may be more challenging. “

UK stocks trade at a deep discount to the rest of Europe as investors have fled in recent years.National Blue Chip Stocks FTSE 100 Index This represents a decline of almost 5% over the past year compared with pan-European growth of 5% Stoke 600.

London remains a contender

London also suffered a number of delistings and snubbed high-profile IPOs last year.Number of listed applications per square mile Drop to six-year low in 2023According to data obtained by the investment platform XTB at the end of last year and reported by multiple British media.

Arm, a British semiconductor and software design company owned by Japanese investor SoftBank, specifically chose to list on the New York Stock Exchange last year. Nasdaqand a number of other technology companies, despite efforts by Prime Minister Rishi Sunak’s government to persuade the company to list in London.

Melanie Wadsworth, partner at international law firm Faegre Drinker, said: “Following a number of acquisitions and delistings last year, we have seen another company leave the London Stock Exchange’s main market, along with the likes of Arm It’s very disappointing to turn to Nasdaq for an IPO,” he told CNBC on Tuesday.

“However, I can understand the rationale behind this proposal, as TUI is based in Germany and only about 22% of transactions in 2023 will be through the UK market. Therefore, I hope that this decision is due to factors specific to TUI Promoting, rather than indicating a trend.”

Tom Bacon, a partner at global law firm BCLP, said it was understandable that some would see TUI’s delisting as another example of companies moving out of London, but he agreed it was difficult to consider the specific circumstances of the TUI case. important.

“Much like other recent examples, this decision has specific reasons related to the merger of TUI Travel plc and TUI AG in 2014,” Bacon said by email on Tuesday.

“London remains Europe’s largest exchange by various metrics and is actually performing better than other European exchanges such as Frankfurt, Paris and Amsterdam in terms of activity in 2023.”