Mordashov backs TUI's new strategy
TUI AG investor Alexei Mordashov backs the German company's new strategy to split up its tourism and container shipping businesses, he said on Tuesday. "We are totally convinced that the initiated examination of strategic options for the shipping business will lead to a solution in the best interest of shareholders," said the Russian steel tycoon, who owns about 5 percent of TUI's shares through private investment vehicle S-Group Capital Management. A week ago, TUI Chief Executive Michael Frenzel dropped his two-pillar strategy of tourism and shipping, giving way to shareholder pressure, and said he would consider options to separate the company's Hapag-Lloyd container shipping business. In future, he said, TUI would focus on its tourism unit -- TUI owns 51 percent of TUI Travel Plc . TUI is now examining options which include a sale, spin-off or merger of Hapag-Lloyd -- the world's fifth-biggest container shipping group -- amid rising speculation about interested parties and possible scenarios.
On Thursday, a group of German business people, mainly Hamburg-based, said it may enlist financial investors as allies to help buy Hapag-Lloyd. The group represents the so-called Hamburg solution, designed to keep Hapag-Lloyd in the German port, warding off foreign investors to protect jobs. Media reports said earlier the city of Hamburg favoured plans to merge Hapag-Lloyd with peer Hamburg Sued, owned by the Oetker family. Another option would be to merge Hapag-Lloyd with another international competitor. Morgan Stanley said on Thursday it saw advantages of a merger with Singapore-based shipper Neptune Orient Lines , saying a larger combined carrier could see economies of scale such as route planning flexibility. Analysts value Hapag-Lloyd, with around 140 container ships, at between 4.2 billion euros ($6.48 billion) and 4.6 billion euros. NOL has 120 container ships and an enterprise value of around $3.3 billion. TUI values Hapag-Lloyd on its books at 3.5 billion euros. Industry experts said Chinese shipping groups were unlikely to get involved.
Chinese operators already have a long list of new ships coming on stream in the next few years, the market is weak and it would be hard for them to raise funding via equity. China's largest shipping conglomerate, China Ocean Shipping (Group) Co (COSCO), plans to seek a listing of its tanker fleet or inject it into its listed flagship, China COSCO Holdings Co Ltd , it said this month.
On Thursday, a group of German business people, mainly Hamburg-based, said it may enlist financial investors as allies to help buy Hapag-Lloyd. The group represents the so-called Hamburg solution, designed to keep Hapag-Lloyd in the German port, warding off foreign investors to protect jobs. Media reports said earlier the city of Hamburg favoured plans to merge Hapag-Lloyd with peer Hamburg Sued, owned by the Oetker family. Another option would be to merge Hapag-Lloyd with another international competitor. Morgan Stanley said on Thursday it saw advantages of a merger with Singapore-based shipper Neptune Orient Lines , saying a larger combined carrier could see economies of scale such as route planning flexibility. Analysts value Hapag-Lloyd, with around 140 container ships, at between 4.2 billion euros ($6.48 billion) and 4.6 billion euros. NOL has 120 container ships and an enterprise value of around $3.3 billion. TUI values Hapag-Lloyd on its books at 3.5 billion euros. Industry experts said Chinese shipping groups were unlikely to get involved.
Chinese operators already have a long list of new ships coming on stream in the next few years, the market is weak and it would be hard for them to raise funding via equity. China's largest shipping conglomerate, China Ocean Shipping (Group) Co (COSCO), plans to seek a listing of its tanker fleet or inject it into its listed flagship, China COSCO Holdings Co Ltd , it said this month.