|
HAMBURG,
home to TUI AG’s Hapag-Lloyd shipping line, may buy a
stake in the freight operator to secure jobs and
expertise in the port city as potential buyers entertain
making bids, a German official said Monday.
The
city’s incoming ruling coalition of Christian Democrats
and the Green Party discussed buying part of Hapag,
according to Peter Kleinort, a spokesman for the economy
ministry of Hamburg, which constitutes one of Germany’s
16 federal states and has 140,000 citizens depending on
the port for their living. TUI shares rose in Frankfurt
trading after his comments.
“There
is a readiness to take a stake if necessary” to keep
Hapag locally based, Kleinort said in an interview.
WestLB analysts have said Hapag could fetch €5.4 billion
($8.6 billion) for Hanover, Germany-based TUI in an
auction.
TUI,
created through mergers between marine and tourism
assets, gave in to investor pressure last month and said
Hapag would likely be sold after months of reported
interest from
Temasek,
Singapore’s
state wealth fund. Der Spiegel has said TUI wouldn’t
promise Temasek control. Germany may join the US, whose
lawmakers forced Dubai’s DP World to sell terminals in
2006, in blocking a foreign attempt to control port
assets.
TUI’s
shares gained as much as 2.8 percent in
Frankfurt and closed up 36 cents, or 2 percent, to €18.31.
“Hamburg
could afford to pay a high price for a stake in Hapag,”
Martina Noss, an analyst at Norddeutsche Landesbank in
Hanover who rates TUI “hold,” said by phone. “TUI won’t
sell Hapag for a welfare price just to keep the company
German.”
Singapore interest
Hamburg’s
new government takes power May 7, the same day as TUI’s
annual general meeting. “We’ve made no decision as the
new government cannot do so until it formally takes
office,” Kleinort said Monday. “At the same time, TUI is
reviewing its options so we don’t need to make a
decision as yet.”
Hamburg
gets taxes of €883 million a year from the port, the Web
site of the facility’s governing authority says.
Temasek’s Neptune Orient Lines Ltd. is willing to pay $7
billion for Hapag-Lloyd and believes it has more cash
for a bid than any rival shipping company, Dow Jones
reported this week, citing an unidentified person
familiar with the matter.
A
message left on the office phone of
Neptune spokesman Paul Barrett after
Singapore office hours wasn’t returned.
Power
struggle
Some
investors doubt chief executive officer Michael Frenzel
is committed to auctioning Hapag to the highest bidder.
Norwegian shipping billionaire John Fredriksen demanded
TUI speed up selling Hapag a week ago, and doubled his
stake to 11.75 percent. He wants board members replaced
and said he had “serious doubts” about a “timely,
value-maximizing” deal. A message left at his London
office wasn’t immediately returned.
“What I
suspect they’re doing is making some kind of deal with
local politicians in Hamburg to sell this thing at a
below-market price,” Guy Wyser-Pratte, a New York-based
activist investor with 1 percent of TUI, said in an
interview this week. He supports Fredriksen’s demands.
“In a free and open auction, this would’t happen.”
TUI,
which has said a sale of the unit was more likely than a
spinoff, will consider Fredriksen’s proposal to change
directors at the May 7 meeting. The Sueddeutsche Zeitung
newspaper, citing unidentified German officials, today
said Hapag would be kept from falling into foreign
hands. Deutsche Bahn AG, the state-owned railway,
rejected a Financial Times Deutschland report two days
ago that said it would buy Hapag.
“We
don’t comment on rumors about potential buyers for Hapag,”
Robin Zimmermann, a TUI spokesman, said in an interview.
“We are open to all incoming bids for Hapag. Our aim is
to create maximum value for the shareholders.” He
declined to comment on Wyser-Pratte’s remarks.
Mordashov
Mayor
Frenzel has an ally in Russian steel billionaire Alexei
Mordashov, who has built a 10-percent stake and supports
the CEO as well as the current board. He’s said he plans
joint ventures to build TUI’s tourism business, Europe’s
largest, in Russia.
TUI said
on April 21 it’s at least a month away from talking to
buyers, with the disposal proceeding “as planned.” TUI
also said its shareholder base split into “two camps,”
with long-term investors most interested in tourism and
a “short-term focused” group wanting profit from the
Hapag sale.
Christian Democrat Mayor Ole von Beust won a third term
in the city in February. He’s focused economic policy on
expanding the nation’s biggest port as traffic grows to
accommodate an export boom. He also hasn’t shied from
taking stakes in local companies to retain jobs, a
policy unpopular with the federal government, led by
party colleague Chancellor Angela Merkel.
Von
Beust’s administration bought stakes in cosmetics maker
Beiersdorf AG in 2003 and in European Aeronautic,
Defence & Space Co. last year to secure influence in the
companies.
Federal
Transport Ministry spokesman Sven Ulbrich said at a
regularly scheduled press conference in
Berlin
on Monday that Merkel’s government doesn’t want to
interfere in TUI’s decision.
“We’ve
always made that clear. We’ve also said that we’re
interested that the economic standing of
Hamburg
doesn’t suffer nor that of its harbor,’” Ulbrich said.
He denied that the government is looking for potential
investors in Hapag. (Bloomberg) |
