London’s stock market has bigger problems than Tui’s likely departure | Nils Pratley

tA-ta, Tui? Europe's largest tour operator Tui is considering withdrawing from the London stock exchange and flying only to Germany. Is this another blow to the UK market, in addition to BHP Billiton (gone to australia), Arms (opted to list in the US.), Ferguson (a fugitive to the US) and everything else?

Well, it's obviously not great news for London that a FTSE 250 company with a dual listing may choose to simplify the trading of its shares elsewhere. But let's have a perspective on this. Outbound tourism from the UK may be Tui's most important market, but the company itself has been feeling increasingly German, from a corporate point of view, for some time now.

The inescapable fact is that Tui has been based in Germany since the great merger of Tui Travel (which emerged from the former British company First Choice) and its German parent Tui AG almost a decade ago. When the Covid pandemic hit the travel market, it was the German State that propped up the company with emergency loans and state aid.

It is therefore not surprising that three quarters of the company's shares are held or registered in Germany and that the weight of share trading has shifted there. On this basis, Tui states that "some shareholders" have asked him to study whether a dual listing model is still "optimal and advantageous."

If the conclusion is suboptimal and disadvantageous, no one should be surprised. Two listings mean extra expense and hassle. You wouldn't create the current configuration if you started from scratch. What's more, Tui said, an exclusive inclusion of Germany could make it easier to comply with the European Union's rules on airline ownership, but since it already can do so, that is a secondary issue. The primary consideration is liquidity and existing ownership profile.

A 75% majority vote is needed to delist London, so if there are enough UK patriots, they can organize to resist if they wish. Your task would probably be made slightly easier by virtue of the fact that the 11% share in Russian tycoon Alexei Mordashov remains frozen under sanctions laws.

None of this denies that the London stock market lacks fizz, freshness and America's deep reserves of liquidity. The 0.5% stamp duty on share purchases, compared to zero in the US, does not help. Either the disastrous performance of so many newcomers. Nor did the London Stock Exchange Group's efforts to change its name to LSEG and speak with an American accent on data and artificial intelligence, rather than stock trading, which today accounts for just 3% of its revenue.

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But there's still no need to force Tui to fit the gloomy script. In recent years, Shell, Unilever (after unnecessary huffing and puffing) and data publisher Relx have joined forces in London. They are three of the top 10 companies in the FTSE 100, so London is still capable of winning the dual listing fights that matter. The BHP mining company, another large company, chose a main listing in Sydney, but it was obviously always an Australian company. Likewise, Tui's departure would not be a disaster. The real problem is the shortage of interesting startups in the UK and UK money willing to back them. Unfortunately, that conundrum is more difficult to solve than the technical question of listing a package tour operator.

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