Hapag-Lloyd parent TUI AG now wants to sell its container arm and is drawing up divestment papers, CEO Michael Frenzel admitted to increasing angry shareholders at the group's AGM yesterday in Hanover.
The frank policy change brings to an end the embattled CEO's "two pillar strategy," reported London's Financial Times. Mr. Frenzel's scheme of combining tourism with container transport has proven unpopular with stockholders who see their share value go down as his salary goes up.
Mr Frenzel has suffered personal attacks, led by the "Rambo of the capital markets" Guy Wyser-Pratte, an ex-US Marine, who wants his head.
"This guy has done nothing in the last 13 years but destroy the value of the company," said Mr Wyser-Pratte. "Everything he's bought he overpaid for, everything he sold has tripled in value and his salary has quadrupled."
Also critical was shareholder John Fredericksen, a mega ship owner whose fortune is reckoned at US$8 - $11 billion. He issued an angry letter to shareholders before yesterday's AGM claiming that EUR1,000 invested in TUI in 1994 when Mr Frenzel took over would now only be worth EUR970.
Mr Fredericksen wants to abandon Frenzel's "two pillar" strategy and have Hapag-Lloyd focus on its core business. "The management in Hapag-Lloyd are doing the best they can, but I think they are hindered by the effort put into the tourism and the aeroplane business," he was cited as saying in London's Financial Times.
Said Mr Frenzel: "The preparation to separate the TUI Group's shipping division is progressing according to plan. We do not rule out any of the potential options, although our clear preference is a divestment solution."
Reuters reported that Mr Frenzel said a merger would be too time consuming and a spin-off would be a long-winded option requiring "the group to be completely refinanced, a condition hardly perceived as possible at appropriate terms and conditions under current market conditions."
TUI owns a 51 percent stake in TUI Travel, Europe's biggest tourism firm, and owns Hapag-Lloyd, the world's fifth-largest container shipping firm analysts value at EUR4.6 billion (US$7.12 billion).
Singapore's Neptune Orient Lines CEO Thomas Held has expressed interest in merging his APL container line with Germany's Hapag-Lloyd. "We have to see what's the next step in Germany," he said.
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