TUI to drop Hapag-Lloyd merger plan, shipping profits rise 121%
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TUI Chief Executive Michael Frenzel’s plan to merge container shipping subsidiary Hapag-Lloyd within the holding company is close to being shelved due to shareholder unrest, according to Reuters.
The report said Norwegian billionaire John Fredriksen, who owns 5 percent of TUI, is opposed to the merger plan and is close to getting enough allies to reach the 25.1 percent of shareholders needed to block the proposal.
“The plans are 100 percent dead,” one source told Reuters, while another said TUI’s board 'will not allow it to come to a contentious vote at the annual shareholders’ meeting.” TUI declined to comment.
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The March issue of American Shipper (pages 66-68) includes an interview with U.S. investor Guy Wyser-Pratte, who bought 1 percent of TUI in September, and wants to see Hapag-Lloyd broken up to maximize the group's value.
TUI shares gained more than 6 percent last month on the back of continuing speculation that Hapag-Lloyd and Neptune Orient Lines, majority owned by Singapore state investor Temasek Holdings, are on the brink of merging.
Meanwhile, TUI today reported preliminary annual results for its shipping division, comprising container and cruise operations, showing earnings (underlying EBITA) rose 121 percent to 197 million euros ($288 million) despite a 1 percent dip in revenue of 6.2 billion euros ($9.05 billion).
TUI will publish detailed information on the 2007 financial year on March 18.
