TUI AG will not bid for TUI Travel
German shareholder TUI AG has announced it does not intend to buy TUI Travel as previously suggested.
It made the statement in accordance with the UK City Code of Takeovers and Mergers (the Code) which states it cannot now change its mind and make a takeover bid within six months.
However, the rules do not stop TUI Travel making a so-called ‘reverse merger’ by buying TUI AG which had been suggested by Reuters but dismissed by the company.
A TUI Travel spokesman confirmed: "There is no restriction on us."
TUI AG, which holds a 56% share in TUI Travel, said the decision was based on a judgment that it was not in the interest of TUI shareholders for a ‘share-based transaction’ at current exchange ratios.
It added: "TUI AG will continue fully to exercise its role as majority shareholder in order to leverage the value potential and benefits within the TUI Group for the benefit of all shareholders and other stakeholders of TUI AG."
Both TUI AG and TUI Travel suffered a share slump following the announcement.
TUI Travel said: "Following the announcement on 16 January 2013 which confirmed very early stage talks regarding a potential combination of the two companies, both sides promptly engaged in detailed discussions but failed to reach agreement.
"The Independent Directors of TUI Travel confirm that the parties are no longer in discussions.
"TUI Travel can confirm it is not in discussions with any other party regarding a potential offer for TUI Travel."
Last week, the Independent Directors of TUI Travel issued a statement to the London Stock Exchange following press speculation that TUI AG were looking at ways to combine the German company with its UK business to save over €500 million, see previous story.
Diane
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