Recommended cash offer to acquire CP Ships HANOVER, Germany, Aug.
21 /PRNewswire-FirstCall/ -- TUI AG announces that it has agreed to
acquire CP Ships Limited, a leading Canadian container shipping
company, in an all-cash transaction for US$2.0 billion ((euro) 1.7
billion), or US$21.50 per share. As of 30 June 2005, net debt of CP
Ships was US$316 million ((euro) 261 million). Pursuant to the
terms of a support agreement between the companies, the Board of
Directors of CP Ships has unanimously recommended that
share-holders of CP Ships accept the offer. The offer price
represents a premium of 24.9% over CP Ships' volume- weighted
average closing price of the last three months, and 9.7% over CP
Ships' closing share price on August 19, 2005, the last business
day before the offer was announced. "This transaction will enhance
growth opportunities over the longer term and will enhance value
for TUI's shareholders through CP Ships' earnings potential and the
realization of synergy potential in operations and ship networks,"
said Dr. Michael Frenzel, CEO of TUI AG. "Our enlarged shipping
business will be well positioned to take advantage of the strong
long term growth dynamics in the container shipping industry. This
is both a compelling financial and strategic opportunity for us."
The acquisition of CP Ships will accelerate the growth of
Hapag-Lloyd, TUI's container shipping business. The combined
company will be a top five player, based on capacity, in the
worldwide container shipping mar-ket and an important service
provider across the North Atlantic. It will also offer stronger
coverage in the Far Eastern, Australasian and South American trade
lanes. In addition, Hapag-Lloyd believes its significantly
increased size and presence in the world's shipping lanes will
increase its attractiveness to partners in alliances. "The
combination of Hapag-Lloyd and CP Ships will create a company with
the strength and scale to compete effectively in an industry where
consolidation is changing the landscape. Furthermore, the combined
company will offer enhanced resources and opportunities for both CP
Ships' and Hapag-Lloyd's customers and employees," said Michael
Behrendt, CEO of Hapag-Lloyd. "The Board of CP Ships undertook a
review of our business and its potential opportunities. This
transaction represents immediate and attractive value for our
shareholders and the Board has recommended it unanimously," said
Ray Miles, CEO of CP Ships Ltd. Hapag-Lloyd has developed
post-acquisition integration plans which contemplate a synergy
potential of approximately (euro) 180 million per annum by the
third full year following completion of the acquisition. TUI
expects integration costs to amount to approximately (euro) 100
million, mostly occurring during 2006. TUI expects the acquisition,
including the intended rights issue, to be earnings per share
enhancing at least post integration, which is expected for 2008.
The combined group currently operates 139 ships (with a further 17
on order) delivering capacity of approximately 400,000 TEU on over
100 routes spanning the globe. Before effects of consolidation the
combined shipping business would have had sales of approximately
(euro) 5.7 billion and EBITDA of (euro) 588 million in 2004. TUI
has supported the successful development and organic growth of
Hapag-Lloyd since its acquisition in 1997. The acquisition of CP
Ships fits both this growth strategy and TUI's strategy well, which
builds on two strong businesses in tourism and shipping and enables
the Group to take advantage of the expected market growth in both
sectors. TUI is the number one tourism business in Europe and has a
strong position in the global container shipping market. Both
markets offer excellent long-term growth opportunities - shipping
as a result of developments in the global economy and tourism as a
result of changes to lifestyle and increases in disposable income
in Western Europe and of emerging markets in Eastern Europe and
Asia. "Having seen our tourism operations start to recover in 2004
and the upward trend continuing in 2005, we view the prospects for
tourism with confidence. We have continued to develop our business,
in particular to adapt to the changing purchasing habits of our
customers and to take advantage of our strong position in the hotel
and airline sector. Through our integrated business model we are
able to achieve above-average utilization of our capacity. This has
been and will continue to be a winning formula," said Dr. Michael
Frenzel. TUI's offer to acquire CP Ships will be subject to
customary closing conditions, inter alia, its acceptance by
shareholders representing two thirds of the outstanding CP Ships
shares on a fully diluted basis and the receipt of necessary
regulatory approvals in Canada, the United States, Europe and
certain other countries where the businesses currently operate. TUI
anticipates mailing the offer to shareholders as soon as possible
and closing the transaction during the fourth quarter of this year.
Following the successful closing of its offer TUI plans to increase
its holding in CP Ships to 100 per cent. TUI has secured necessary
bank financing to fund the offer. CP Ships shareholders are advised
to read the Offer and Circular, the Directors Circular and other
offer documentation regarding the transaction to be filed with the
Canadian securities commissions and the United States Securities
and Exchange Commission as they will contain important information.
Shareholders may obtain a copy of the material (when available) at
the Canadian SEDAR web site at http://www.sedar.com/ and at the
SEC's web site at http://www.sec.gov/. Information on CP Ships Ltd.
One of the world's leading container shipping companies, CP Ships
provides international container transportation services in four
key regional markets: TransAtlantic, Australasia, Latin America and
Asia. Within these markets CP Ships operates 38 services in 22
trade lanes. At June 30, 2005, CP Ships' vessel fleet was 82 ships
and its container fleet 441,000 TEU. Volume in 2004 was 2.3 million
TEU. CP Ships also owns Montreal Gateway Terminals, which operates
one of the largest marine container terminal facilities in Canada.
CP Ships is listed on the Toronto and New York stock exchanges
under the symbol TEU and also in the S&P/TSX 60 Index of top
Canadian publicly listed companies. Information on TUI AG TUI is
the European market leader in tourism and, through its wholly owned
subsidiary, Hapag-Lloyd, is a leading player in the global market
for container shipping. The tour operators of TUI trade in 17
European countries. In 2004, the Group had around 18 million
customers. TUI now includes about 3,290 travel agencies, 120
aircraft, 42 incoming agencies and 285 hotels with approximately
163,000 beds in 28 countries. TUI provides its customers with
holidays from a single source - from booking in a travel agency,
flights, accommodation in the Group's own hotels and customer-care
provided by the Group's own incoming agen-cies. This vertical
integration strategy covers the whole value chain in the source
markets (sales markets) and the destinations (holiday areas) and
provides its customers with high standards of quality from start to
finish. Through its wholly owned subsidiary Hapag-Lloyd, TUI
operates one of the world's leading container shipping companies
and also operates a fleet of four cruise liners. The container
shipping operation, with 57 container ships, specialises in
complex, wide-ranging logistics services. The container ships
primarily supply the main routes between Europe and Asia, Europe
and North America and North America and Asia. Hapag-Lloyd's
container shipping operation transported 2.4 million TEU worldwide
in the 2004 financial year. The container shipping operation, with
57 container ships, specialises in complex, wide-ranging logistics
services. The container ships primarily supply the main routes
between Europe and Asia, Europe and North America and North America
and Asia. Hapag-Lloyd's container shipping operation transported
2.4 million TEU world-wide in the 2004 financial year. The cruise
ship division is the leading "premium and luxury cruise" tour
operator in German-speaking countries. The cruise liners including
the 5-star-plus "MS Europa" are at home on all the world's oceans.
For further information, visit the websites at
http://www.tui.com/www.hapag-lloyd.com. Forward looking
information: ---------------------------- This press release
contains certain forward-looking information and statements within
the meaning of applicable securities laws relating, but not
limited, to operations, anticipated or prospective financial
performance, results of operations, business prospects and
strategies of TUI and CP Ships. Forward-looking information
typically contains statements with words such as "consider",
"anticipate", "believe", "expect", "plan", "intend", "likely" or
similar words suggesting future outcomes or statements regarding an
outlook on future changes in volumes, freight rates, costs,
achievable cost savings, the estimated amounts and timing of
capital expenditures, anticipated future debt levels and incentive
fees or revenue, or other expectations, beliefs, plans, objectives,
assumptions, intentions or statements about future events or
performance. These statements are subject to known and unknown
risks, uncertainties and other factors that could cause actual
results to differ materially from those suggested by the
forward-looking statements. Although TUI believes it has a
reasonable basis for making the forecasts or projections included
herein, you are cautioned not to place undue reliance on such
forward-looking information. By its nature, the forward-looking
information involves numerous assumptions, inherent risks and
uncertainties, both general and specific that contributes to the
possibility that the predictions, forecasts and other
forward-looking statements will not occur. These factors include,
but are not limited to, changes in business strategies; general
global, political and economic and business conditions, including
the length and severity of any economic slowdown in the countries
and regions where the companies operate, including seasonality,
particularly in the United States, Canada, Latin America,
Australasia, Asia and Europe; the effects of competition and
pricing pressures; changes in freight rates; changes in operational
costs; industry over-capacity; changes in demand for container
shipping; congestion; availability and cost of chartered ships;
changes in laws and regulations, including tax, environmental,
employment, competition, anti-terrorism and trade laws;
difficulties in achieving cost savings; currency exposures and
exchange rate fluctuations, fuel price and interest rate
fluctuations; changes in access to capital markets and other
sources of financing; various events which could disrupt
operations, including war, acts of terrorism, severe weather
conditions and external labour unrest, all of which may be beyond
TUI or CP Ship's insurance coverage's; compliance with security
measures by governmental and industry trade practice groups, the
outcome of civil litigation related to CP Ship's restatement of
financial results and the impact of any resulting legal judgments,
settlements and expenses, and the companies' anticipation of and
success in managing the risks associated with the foregoing. The
above list of important factors affecting forward-looking
information is not exhaustive, and reference should be had to the
other risks discussed in filings with securities regulators. TUI
and CP Ships undertake no obligation, except as required by law, to
update publicly or otherwise revise any forward- looking
information, whether as a result of new information, future events
or otherwise, or the above list of factors affecting this
information. DATASOURCE: TUI AG CONTACT: Investor Relations
Contacts: Bjorn Beroleit, TUI AG/Hapag-Lloyd AG, t: +49 511 566
1310, m: +49 172 808 3023, ; Jeremy Lee, CP Ships Ltd., t: (514)
934-5254, m: (514) 502-3112, ; Media Contacts: Kuzey Esener, TUI
AG, t: +49 511 566 1487, ; Klaus Heims, Hapag-Lloyd AG, t: +49 40
3001 2263, m: +49 172 447 0135, , Ian Blair, Hill & Knowlton,
TUI AG/Hapag-Lloyd AG, t: (416) 413-4694, m: (416) 522-0717, ;
Elizabeth Canna, CP Ships Ltd., t: +44 (0)1293 861 921, m: +41
(0)79 691 3764,
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