Tui has announced that its board is considering plans to delist from the London Stock Exchange (LSE), should this be in the best interest for shareholders.

The travel company said it is looking to "upgrade" its secondary listing on the Frankfurt Stock Exchange, but would need 75% approval from the shareholders for the move to go ahead.

The move is set to be another hammer blow to London’s attractiveness as a base for big firms, with a number of businesses opting to list on overseas exchanges in recent years, such as UK chip designer Arm, which decided to list on Nasdaq in New York rather than the LSE in March.

Tui said that the decision to look at relocating comes as there is "notable liquidity migration from UK to Germany", following the merger of the British and German Tui businesses in 2014, and “more significantly” in the past four years.

Although the holiday firm has said that a shift to Germany could lower costs and result in "potential benefits to European Union airline ownership and control requirements", Tui’s chief executive, Sebastian Ebel, said that the announcement had “no political background”, suggesting that the potential delisting would be a result of Brexit.

The announcement came as part of Tui’s full-year results, which saw the group’s underlying EBIT increasing by 139% year-on-year to €977m (£837m), delivering in line with expectations.

The group’s Q4 revenue hit €8.5bn (£7.28bn), closing 11% higher compared to the same period in 2022, as a result of higher volumes and in particular higher prices.

Investment director at AJ Bell, Russ Mould, commented: "There is obvious logic to the move given TUI is very much a German business which even received a bailout from the country’s government during COVID. It will be interesting to see how investors vote in February – with the required 75% approval a high bar to clear.

"You can see the company’s reasoning, as it feels there is more trade struck through Frankfurt and it reports its numbers in euros for good measure. Its claim that index inclusion in the MDAX would be beneficial is harder to judge as the firm is already in the FTSE 250 and chasing passive, index-tracking flows is not necessarily a good idea, as that can work for or against you.

"Moreover, management teams should be in the business of managing the assets to best effect, and getting the best, risk-adjusted returns, not managing the share price. If they do the former properly, the latter should take care of itself over time."

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