Tui Travel plans merger with parent group
Tui Travel is about to begin merger talks with its parent company.
Tui Travel has begun business negotiations with its own parent group, which it ultimately wants to result in savings of £83 million across the resultant enlarged company.
Parent company Tui AG already owns 56.4 per cent of the London-listed travel group and yesterday (January 16th) proposed the nil-premium, all share merger.
Reports suggest that it is Tui AG's largest shareholders Norwegian shipping magnate John Fredriksen and Russian tycoon Alexey Mordashov who are the driving force behind the plans, as they look to make savings having lost around 40 per cent on their investment in the Hanover-based firm in recent years.
Under Takeover Panel rules, the parent company now has until February 13th to table a firm offer for Tui Travel or cease negotiations.
A spokesman for the group explained that talks were still at a very early stage, but this did not stop shares in the company rising four per cent after the announcement.
Other proposed travel mergers include a takeover of Aer Lingus by rival Irish airline Ryanair, but the Irish government has expressed opposition to this.