15th Sep 2014 06:55
LONDON (Alliance News) - TUI Travel PLC and German parent TUI AG said Monday they have reached a deal on their previously proposed merger, which will see TUI Travel shareholders own a 46% stake in a combined group that will have a fully-diluted equity value of around GBP5.2 billion.
Travel operator TUI Travel, which owns Thomson and First Choice, has been in the process of merging with its German parent TUI AG, after TUI AG said it June that it planned to buy the minority of UK-based holiday operator TUI Travel that it does not already own.
"Taking into consideration TUI AG's existing stake in TUI Travel, the merger is expected to result in existing TUI Travel shareholders owning 46% of the combined group and existing TUI AG shareholders owning 54% of the combined group, on a fully-diluted basis," the companies said in a joint statement Monday.
Under the merger, TUI Travel shareholders with receive 0.399 new TUI AG shares for each share they hold.
TUI Travel shareholders, including TUI AG, will receive a second interim dividend of 20.5 pence per TUI Travel share, to include 10.5 pence per TUI Travel Share in lieu of a final dividend for the financial year 2013/14.
"By simplifying the structure and combining the two businesses substantial synergies and cost savings will be realised. In addition, the potential to deliver material commercial benefits will be unlocked. Peter Long's position as, firstly joint chief executive with continued responsibility for the former TUI Travel businesses, and then in 2016 as chairman of the supervisory board should also serve to give TUI Travel shareholders confidence in the long-term prospects for the group," said Deputy Chairman Michael Hodgkinson in the statement.
In their statement, the companies said Alexey Mordashov, TUI AG's largest shareholder, has confirmed his support for the merger.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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