TUI, the German travel giant, has made the decision to delist its shares from the London Stock Exchange’s FTSE 250 and list solely in Frankfurt’s MDAX. The vote by TUI’s investors was overwhelming, with 98.35% in favor of the move. The transfer is expected to take place on June 24. TUI currently has a dual listing between London and Frankfurt, but due to changes in the ownership structure of its shares and a significant shift in liquidity from the U.K. to Germany, the company was approached by various investors questioning the benefits of the dual listing.
The move to delist shares from London comes as a result of a marked shift in liquidity from the U.K. market to the German market. Currently, around 77% of transactions in TUI shares are settled via Germany, while the U.K. accounts for less than a quarter. Shareholders and investors have expressed concerns about the liquidity being split between two markets, leading to the proposal of listing solely in Frankfurt. CFO Mathias Kiep explained that moving the liquidity to one pool and being more prominent in the MDAX were some of the reasons behind the decision.
The decision to move away from London is also influenced by the challenging market environment in the U.K. Stocks in the U.K., including the FTSE 100 index, have been trading at a considerable discount compared to the rest of Europe. Over the past year, the FTSE 100 index has fallen by almost 5%, while the pan-European Stoxx 600 has seen a 5% increase. The investor flight in recent years and the decline in applications to list in London have added to the concerns.
London has experienced a number of de-listings and high-profile IPO snubs in the past year, which has raised concerns about the attractiveness of the market. According to data obtained by investment platform XTB, the number of applications to list in the Square Mile fell to a six-year low in 2023. The decision by British semiconductor and software design firm Arm, owned by Japanese investor SoftBank, to list on New York’s Nasdaq instead of London has been seen as a notable example of this trend.
While some may view TUI’s delisting as another example of companies shifting away from London, it’s important to consider the specific reasons behind TUI’s decision. The move is related to the legacy merger of TUI Travel plc and TUI AG in 2014. The fact that TUI’s headquarters are in Germany and that only approximately 22% of its trading in 2023 took place via the U.K. market are contributing factors to this decision. It is hoped that this move is specific to TUI and does not indicate a larger trend.
TUI’s decision to delist its shares from the London Stock Exchange and list solely in Frankfurt reflects the company’s response to the significant shift in liquidity from the U.K. to Germany. The move is also influenced by the challenging market environment in the U.K. and the recent trend of de-listings and IPO snubs in London. While this decision may raise concerns about the attractiveness of the London market, it is important to consider the specific factors that led to TUI’s delisting.
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