Investor shuffle for Hapag-Lloyd

TUI has been trying to sell off it's remaining holdings of Hapag-Lloyd.
Bloomberg News has the inside scoop of what might be reported within a couple of days.

The city-state of Hamburg may become the largest shareholder of shipping company Hapag-Lloyd AG, Frankfurter Allgemeine Zeitung reported, without citing a source for the information.

Hamburg may pay 420 million euros ($555 million) to TUI AG (TUI1) to boost its stake in Hapag-Lloyd to more than 37 percent from 23.6 percent, the newspaper said in an advance copy of an article in tomorrow’s edition.

Billionaire shipping magnate Klaus-Michael Kuehne is ready to pay TUI 160 million euros to increase his 24.6 percent stake while insurers Hanse-Merkur and Signal Iduna plan to pay 13 million euros and 7 million euros respectively for shares in the shipping company held by TUI, the newspaper said.

The plans are part of an agreement with TUI that may be completed on Feb. 14, FAZ said. TUI’s stake in Hapag-Lloyd will probably shrink to around 20 percent from 38.4 percent, the newspaper said.

Daniel Stricker, a spokesman for Hamburg’s financial authority, and Robin Zimmermann, a spokesman for TUI AG (TUI1), both said separately that TUI and Hamburg-based Albert Ballin’s investment group, which comprises Hamburg’s state government, Kuehne, Signal Iduna, Hanse-Merkur, M.M. Warburg & Co. and HSH Nordbank AG, are in “advanced talks.”

Details reported on the stakes are “pure speculation,” said Stricker, who also said he can’t exclude that TUI may make an announcement on a possible agreement on Feb. 15 at its annual shareholder meeting.

TUI to sell remaining interest in Hapag-Lloyd

Back when TUI did the deal with a group of investors to buy part of Hapag-Lloyd,
part of the deal was an option for Albert Ballin (the investor group), to
buy the remaining interest of TUI in Jan. 2012.

Albert Ballin probably has second thoughts about this.

I don't know the terms, but guess they will probably have to buy the rest
of the shares at the previously agreed price.

From Bloomberg News

TUI AG (TUI1) plans to sell its remaining stake in the Hapag-Lloyd AG container-shipping business in January and expand further in Russia and China as the German tour operator redefines its business model.

“We looked for ways to exit Hapag-Lloyd such as finding a new investor or doing an initial public offering, but without having the chance to succeed we’re back to our right to tender our stake,” Chief Financial Officer Horst Baier said yesterday in an interview in Frankfurt. “Assuming we get all the approvals, we’ll execute our option on Jan. 2.”

TUI sold a majority stake in Hapag-Lloyd, Germany’s biggest container line, to Hamburg-based investment group Albert Ballin GmbH in March 2009. The travel company still owns 38.4 percent and has the option to sell a stake to Ballin on Jan. 2.

With an exit from shipping, Hannover-based TUI will be better suited to optimize its tourism business with expansion in Russia as well as China and India, the CFO said. In China, TUI plans to boost its trade in sending tourists to Europe.

“We are currently No. 5 in Russia and plan on becoming No. 2 in the next two-to-three years,” Baier said. “In Asia, we are at the very beginning of our journey, but plan to expand in China and India.”

Baier said the company is “pushing” online offerings and already has about 70 percent of destinations online in Scandinavia, while the percentage is “weaker” in Germany. The company also wants to expand market share in the German-speaking market for cruises, the CFO said.

“It’s frustrating to see how Europe’s debt crisis has affected the real economy and investor sentiment, however we had other years where we had some insecurity and where things cooled down,” Baier said. “We should wait a little bit more to see the outcome of the crisis.”

TUI is scheduled to report yearly earnings on Dec. 14.

The shares dropped 3 percent to 3.89 euros at the close of trading in Frankfurt today, the lowest since Oct. 5. They have fallen 63 percent this year.

Who will own Hapag-Lloyd?

TUI would really like to sell the rest of their stake in Hapag-Lloyd.

Problem is, once again the economy is not favorable, and their talks
with investors have gone nowhere.

I suspect that in Jan. 2012 the Albert Ballin consortium will end up with the rest of TUI's shares.

From The Journal Of Commerce

Report quotes majority shareholder saying clarity on ownership structure needed

Hapag-Lloyd is ruling out an initial public offering in the next 12 to 15 months, according to the German ocean carrier’s majority shareholder.

“As long as we don’t have clarity about the final ownership structure, an IPO is not going to come. I don’t see it in the next 12-15 months,” Karl Gernandt, CEO of Kuehne Holding, told the Financial Times. Kuehne is member of the Albert Ballin consortium that controls 61.6 percent of container ship operator.

German tourism group TUI holds the remaining 38 percent stake in Hapag-Lloyd, which it wants eventually to divest. It sold an 11.3 percent stake to the Albert Ballin investors in May.

Gernandt, chairman of Kuehne+Nagel, the Swiss global logistics group, said talks with Oman and Chinese investors about acquiring TUI’s remaining stake have fallen through. But there have been talks with several US private equity companies.

“Our discussions with potential investors are very difficult as there have been different interests … TUI wants to sell and some investors presented their ideas, but unfortunately it was not possible to realize a deal.”

TUI likely will exit Hapag-Llloyd through a private deal rather than an IPO, Gernandt said. TUI says it has three options for its stake: a trade sale, share floatation or exercising a put option to sell it to the Albert Ballin consortium in January 2012.

Hapag-Llody scrapped plans for an initial public offering in 2004, saying it coudn't get "fair value" for Germany's biggest container shipping line.

The honeymoon is over at Hapag-Lloyd

Back in Feb. 2009 this is what I said about the sale of Hapag-Lloyd

The parent company TUI is bound and determined to get rid of Hapag-Lloyd, even if they have to pull off a shot-gun wedding.

Well, it appears the honeymoon was short lived, which would be expected given the nature of this marriage.

THE new majority owner of German container line Hapag-Lloyd, the Albert Ballin consortium, has entered into a massive internal row over the purchase price and the extent of cuts necessary to survive the financial crisis.

The argument is being fought out in public interviews and statements.

Klaus-Michael Kühne, the second largest shareholder of Albert Ballin, openly criticised the other members for not having reacted to his call for cuts at Hapag-Lloyd. Mr Kühne said that the purchase price for Hapag-Lloyd had been too high and that chances to renegotiate a lower price with Tui had not been taken up.

click here for Lloyds List article

TUI determined to sell Hapag-Lloyd

On Jan. 15, 2009 I made a post stating the sale of Hapag-Lloyd was in jeopardy.

The parent company TUI is bound and determined to get rid of Hapag-Lloyd, even if they have to pull off a shot-gun wedding.

TUI likely will acquire a bigger stake in Hapag-Lloyd than it originally planned in order to finalize the sale of the world’s fifth-largest ocean carrier.

The German tourism group bought back a 33.3 percent stake in Hapag-Lloyd after agreeing to sell the carrier to the Hamburg-based Albert Ballin investor group for 4.45 billion euros ($5.7 billion) in October.

TUI spokesman, said the price would not be renegotiated.

TUI continues to talk with the Albert Ballin consortium about the size and conditions of a loan it has offered to Hapag-Lloyd after the sale to ensure the carrier’s liquidity during the downturn in the container market. After the deal closes, Hapag-Lloyd will hold loans totaling around 2 billion euros ($2.6 billion), including 1.3 billion euros transferred from TUI.

TUI is prepared to lend Hapag-Lloyd an additional 1billion euros, according to reports in Germany.

Despite the latest hitches, TUI said it is confident the deal will close before the release of its full-year earnings on March 25.

click here for complete article in Journal of Commerce