EP Global Commerce, an acquisition vehicle owned by Czech and Slovak investors, has made on Friday a takeover offer for German retailer Metro that values the company at €5.8 billion ($6.60 billion).
EP Global Commerce already holds a stake of nearly 11 percent in Metro. The offer price of 16 euros for each ordinary share and 13.80 euros for each preferred share represents a 34.5 percent premium to when EP Global Commerce made its initial investment in August. It made the full takeover offer after it agreed with investment firm Haniel to buy its 15.2 percent stake.
It also said it would exercise a call option for a stake of 5.4 percent held by an affiliate of Ceconomy.
The firm, co-owned by Czech investor Daniel Kretinsky and Slovak partner Patrik Tkac, said the offer was a “a compelling value and a unique opportunity” for shareholders given the difficult market and challenges facing Metro.
Metro replied in a statement that it would study the offer, but advised its shareholders not to sell to the bidders for now.
Once a sprawling retail conglomerate with activities stretching from electronics to department stores, Metro has in recent years been offloading assets in a bid to focus on its food business under chief executive Olaf Koch. It operates 760 cash-and-carry stores, and 150,000 employees in 26 countries, but it is trying to offload its loss-making Real hypermarkets chain, as well as its operations in China.
In 2015, Metro sold department store chain Kaufhof to Canadian retailer Hudson’s Bay, and two years later, it hived off its consumer electronics retailer MediaSaturn into independently listed company Ceconomy.
In early May, the retailer entered exclusive talks over the sale of its supermarket chain Real with a consortium of buyers led by Hamburg-based property group Redos, which would pay €500 million in cash for the supermarket’s real estate assets and see them take on about €500 million in debt from Metro.
The Czech and Slovak bidders signaled that further changes were needed at Metro, though they said they would not close stores in Germany and its core markets, or cut jobs substantially.
“Metro needs to regain the capability to swiftly react,” they said, adding that otherwise, it “would be exposed to significant risks due to stagnant or declining results.”
Metro generated €36.5 billion in global revenue last fiscal year, a 1.6 percent drop compared with the previous year, but pre-tax profits fell 10.9 percent to €578 million.
The deal would mark the latest foray into western Europe by Kretinsky, who is also chairman of football club AC Sparta Prague. He bought last year a stake in the French daily Le Monde via his Czech Media Invest vehicle. He is best known in European dealmaking circles for his purchases of energy assets in Germany, Italy, and the UK via EPH, a group he founded in 2009.
Source: Reuters and The Financial Times
