Shares in Tui Travel rose yesterday after broker UBS added Europe’s largest travel group to its merger watch list and issued a ‘buy’ recommendation with a 220p a share target price.
The move followed recent speculation that German parent company Tui AG is looking to buy out the remaining 45.5% of the business it does not already own, funded by a sale of its Hapag-Lloyd container shipping division.
While UBS admits the idea is not new, it believes the move could now happen.
Shares in Tui Travel rose 3.2p to 164.9p following publication of a note from UBS which said: “Although a potential buyout of Tui Travel has been in the public domain for some time, we see this as increasingly plausible, with Tui Travel's valuation offering considerable fundamental upside while price support should remain as we see low risk of Tui signalling disinterest.”
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