Fredriksen, TUI's largest shareholder at 15 percent stake, is against the divestment and prefers a spinoff of Hapag Lloyd. He also called on TUI CEO Michael Frenzel to resign because the latter supports the sale.
The Norwegian businessman cited a volatile global market, which indicates TUI will not be able to get a good deal. TUI has put a $6 billion to $7 billion price tag for Hapag Lloyd, however, offers were only at about $5 billion as the shipping market was badly hit by declining freight rates and increasing bunker prices, according to reports.
Last week, Fredriksen wrote members of TUI's supervisory board alleging that Frenzel plans to sell off Hapag-Lloyd without obtaining shareholder approval. He plans to take legal action if TUI fails to schedule an extraordinary general meeting to discuss the divestment with investors.
The supervisory board warned against a spin off: "A spinoff would destroy value and would thus not be in the interest of shareholders,'' the board said in an e-mailed statement carried by Bloomberg.
TUI plans to divest Hapag-Lloyd through a sale to an investor, a merger with a competitor or a spin-off from TUI. Management has been on the lookout for a buyer through a sale.
TUI gave a mid-August deadline for preliminary non-binding bids. "A final evaluation of the different separation options -- trade sale, merger or spinoff -- will only be possible once binding bids will have been submitted by this autumn," TUI added.
TUI would need to repurchase over $3.2 billion of bonds for a spin off, which is "impossible" without the infusion of fresh capital. The move also requires a 75 percent shareholder approval during its annual general meeting. [14/7/08]
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