No thanks to the fuck-up of a certain German bank--Deutsche--but no matter. Onward!
From: TUI Investor Relations
Sent: Thursday, June 18, 2009 12:06 PM
Subject: TUI: Open letter to our Shareholders
It will probably have not passed your notice that on Tuesday, 16th June the TUI share price dropped by more than 18% from 6.13 Euro to around 5.02 Euro. At almost 8 million shares, the number of shares traded on this day was well above the average. This development can be attributed to an analyst report on TUI by Deutsche Bank. On this day they published a research update setting a price target for the TUI share of 1.90 Euro and subsequently a sell recommendation.
Following a review of this valuation by TUI, it became apparent that the update contained technical mistakes in the sum of the parts valuation. This concerned in particular the valuation of the shareholder loan to TUI Travel and the pensions, the effects of which totalled approx. 4 Euros per share. TUI discussed this with the analyst at Deutsche Bank. Deutsche Bank corrected the technical errors in their valuation and released a corrected version to the original report on Wednesday afternoon. The revised target price is now 4.40 Euro (2.50 Euro higher than before). The sell recommendation remains unchanged. On analysis, whilst the bank has corrected the mistakes, they have now also adjusted some of their original assumptions to the detriment of the TUI valuation. For example the report now includes a conglomerate discount of 20%. On the basis of the assumptions published on Tuesday and only taking into account the correction of the mistakes, the calculated TUI valuation would be around 6 Euros per share. This was virtually the share price level before the report was published and would probably not have justified a sell recommendation.
Berlin, Hanover, June 2009
The Executive Board
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