Travel giant forges closer ties in Spain

1st December 2004, Comments 0 comments

1 December 2004 , HANOVER - Europe's biggest tourist group TUI headed towards closer links with Spain's hotel industry on Wednesday after its main shareholder Westdeutsche Landesbank (WestLB) closed a deal to sell its 31.3 percent TUI stake. In the transaction, estimated at upwards of EUR one billion, the stake first goes to Deutsche Bank, which in turn will sell the shares to Spanish interests as well as to international institutional investors. The deal ended months of speculation about, Hanover-based TU

1 December 2004 

HANOVER - Europe's biggest tourist group TUI headed towards closer links with Spain's hotel industry on Wednesday after its main shareholder Westdeutsche Landesbank (WestLB) closed a deal to sell its 31.3 percent TUI stake.

In the transaction, estimated at upwards of EUR one billion, the stake first goes to Deutsche Bank, which in turn will sell the shares to Spanish interests as well as to international institutional investors.

The deal ended months of speculation about, Hanover-based TUI, with annual revenues of more than EUR 15 billion, becoming the target of a takeover after WestLB announced its aim to sell the huge stake in focusing more on its core business.

Deutsche Bank is to sell a 17.3 percent stake in TUI to a consortium led by Spanish hotel chain RIU, with 10 percent going to RIU itself.

The other more than 7 percent is to go to the hotel chain Grupo de Empresas Matutes and Bank Caja de Ahorros del Mediteraneo.

"We are strengthening our partnership with RIU in the lucrative hotel business," TUI chief executive Michael Frenzel said in Hanover. "We want to expand on this."

At the same time, TUI has gained in Grup de Empresas Matutes a new strategic partner with which TUI has had "outstanding" cooperation over the years in the market in England, he said.

The remaining 14 percent TUI stake bought by Deutsche Bank is to be sold to American and European institutional investors.

Frenzel said the deal should now mean that the "uncertainties" on the market regarding TUI had now been resolved and the company can now put its complete focus again on its operations.

Last summer, media reports hinted that TUI was in danger of a possible takeover by Spanish hotel interests after WestLB, the central bank of the state of North Rhine-Westfalia, had announced its aim to sell the 31.3 percent stake.

The reports said the Spanish hotel companies were keen on TUI chiefly as a means of assuring strong bookings by German travellers to their hotels.

In early September, Frenzel dismissed the talk about a takeover and predicted that TUI would have a "reasonable" ownership structure after WestLB sold its stake.

For its part, TUI hold a 50 percent stake in the RIU Hotel Holding company. But officials pointed out that the RIU buy-in at TUI came via a family-owned business in which TUI has no interest and so the deal does not in any way involve a share buyback scheme.

According to TUI's own account, private shareholders hold around 15 percent of the company, with the other 85 percent held by institutional investors. Of that, the WestLB stake had been the largest single holding.

In Dusseldorf, WestLB chief executive Thomas Fischer said the bank had achieved its goal of seeing to it that the stake would land in "responsible hands" by the end of the year.

DPA

Subject: German news

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