p16 City Sept11 9/9/09 19:42 Page 16
City & finance
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BA ‘joins talks’
on BMI future
Cook boosted by
BRITISH AIRWAYS is believed to be one of up to a
Arcandor sell-off
dozen airlines in talks with Lufthansa over the
future of BMI. Virgin Atlantic, Etihad and Emirates
Chris Gray.
Bartram said the troubles at Arcandor had
are also thought to have signed confidentiality THOMAS COOK’s expected sale of nearly half its depressed Cook’s share price at the same time
agreements giving them access to BMI accounts. shares formerly held by Arcandor is set to see it (spring 2009) as Tui UK’s was buoyed by specu-
BA refused to comment on speculation that outperform rival Tui in the market. lation that its German parent, Tui AG, could buy
chairman Martin Broughton and director Roger Arcandor’s 44% stake in Thomas Cook was out other shareholders (see chart below).
Maynard had flown to Frankfurt for negotiations due to be put on the stock market this week, However, Tui AG had been forced to pump
with Lufthansa bosses this week. and analysts believe the sale will rid Cook of a more money into its troubled shipping arm,
BA boss Willie Walsh is thought to be “millstone around its neck”. Hapag-Lloyd, so was now unlikely to buy more
interested in BMI to strengthen BA’s 40% share Nick Bartram of KBC Peel Hunt said the Tui UK shares, he pointed out.
of take-off and landing slots at Heathrow by problems at Arcandor, Thomas Cook’s largest The result could be Thomas Cook shares
acquiring BMI’s 12%. Virgin Atlantic has said such shareholder, had been depressing the company’s rising while Tui’s fall, said Bartram.
a deal would create a monopoly at Heathrow, share price for months. “People will be able to focus on the fundamen-
breaching competition laws. Selling the shares would end uncertainty and tals of Thomas Cook and stop talking about
Virgin is also keen on BMI. Acquiring it would was likely to be met with healthy demand from Arcandor, which has been like a millstone on the
feed domestic traffic to its long-haul services and institutional investors who saw tour operators share price,” he added.
give it a foothold in the Middle East, said Astaire as a good long-term investment, despite “Institutional investors will be taking a
Securities aviation analyst Douglas McNeill. expectations that 2010 would more difficult than long-term view. These are not highly rated stocks
He said it would be hard for any carrier to jus- 2009, said Bartram. and there is a discount on the leisure sector as a
tify acquiring a loss-making airline in a recession. Arcandor’s stake in Cook is being sold by a whole.
Bath Business Travel managing director Adam consortium of banks that gained control of “The market may feel that, looking beyond
White said such a deal would hit customer the shares when the German retailer became next year, they are good value. Cook and Tui are
choice. insolvent in June after pledging the stock as extremely well-run businesses and their earn-
Lufthansa collateral against loans. ings growth is among the best in the sector.”
was forced
to acquire
BMI this year
Thomas Cook v Tui Travel: relative share price performance
under an agreement This graph shows the share price performance of Thomas Cook relative to Tui Travel over the past two years (where “100”
with BMI’s former chair-
is the relative position of the shares on September 3, 2007). When the line is above 100 it shows Thomas Cook’s share price
outperforming that of Tui Travel since the start date; when it is below 100 the opposite is true. For the first 12 months, Cook
man, Sir Michael Bishop.
performed comparatively well, but as concerns grew about Arcandor’s financial strength, the shares performed substantially
worse than Tui Travel’s. The situation was exacerbated as the market speculated that Tui Travel might be subject to a bid by
majority shareholder Tui AG. However, the situation is now changing with the placing of Arcandor’s holding removing an
Cheapflights on
uncertainty that has been depressing Cook’s share price.
120
awards shortlist
110
ONLINE travel agency Cheapflights has been
100
shortlisted in the National Business Awards – the
90
only travel company among the finalists.
More than 160 public and private-sector
80
organisations have been invited to a gala
ceremony at the Grosvenor House Hotel in
70
London’s Park Lane on November 10.
Organiser United Business Media – owner of
60
TTG – said the number of companies entering the
03.09.07 03.12.07 03.03.08 03.06.08 03.09.08 03.12.08 03.03.09 03.06.09 03.09.09
awards was up 20% on last year. Others in line
Source: Datastream
for gongs include Diageo, E.On and Lovefilm.
16 11.09.2009
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