TUI shares rose as much as 7 percent to 12.44 euros in Frankfurt, the biggest intraday jump since January 2013. TUI Travel shares advanced as much as 4.5 percent to 399.90 pence in London.
Almost 80 percent of minority shareholders of the Crawley, England-based company voted in favor of the plan last night, surpassing the necessary threshold of 75 percent. Earlier yesterday, shareholders of TUI AG had given the go-ahead for the merger to proceed.
Approval was “as a gift from heaven,” Commerzbank analyst Johannes Braun said in a note to clients. “It solves the company’s holding dilemma and gives full control over TUI Travel’s sizable cash flows” while reducing the conglomerate’s discount. Braun raised his recommendation on the shares to buy from hold, raising his six-month price estimate to 15 euros from 12 euros.
Investors will receive 0.399 shares of the new TUI AG for each TUI Travel share they own in the nil-premium merger. The increase in TUI AG shares is the steepest one-day jump during Friedrich Joussen’s leadership as CEO, which began in February 2013.
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