{"id":7332,"date":"2019-06-24T15:36:52","date_gmt":"2019-06-24T14:36:52","guid":{"rendered":"https:\/\/praguebusinessjournal.com\/?p=7332"},"modified":"2019-06-24T15:36:52","modified_gmt":"2019-06-24T14:36:52","slug":"kretinskys-takeover-bid-rejected-by-metro-ag","status":"publish","type":"post","link":"https:\/\/praguebusinessjournal.com\/kretinskys-takeover-bid-rejected-by-metro-ag\/","title":{"rendered":"Kretinsky’s Takeover Bid Rejected By Metro AG"},"content":{"rendered":"
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Stores are closing across Europe as consumers shift to e-commerce and discounters barge in. Yet a pair of investors is making an audacious\u00a0takeover bid<\/a>\u00a0for Metro AG, valuing the German chain that sells food and other staples from no-frills warehouses at $6.6 billion.<\/p>\n

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The proposal from Czech billionaire Daniel Kretinsky and his Slovak investment partner Patrik Tkac goes against the grain, but they see an opportunity in Metro\u2019s wholesale business model. The offer lifted Metro\u2019s shares as much as 4.8% early Monday in Frankfurt, the most since January.<\/p>\n

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Metro management rejected the bid as too low. The investors haven\u2019t explained how they plan to turn around a company whose business once included everything from electronics to department stores but now focuses on cash-and-carry outlets in Germany and eastern Europe.<\/p>\n

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European bricks-and-mortar merchants are struggling to contend with the rise of\u00a0Amazon.com Inc.<\/a>\u00a0and cut-price chains Lidl and Aldi. In the U.K., department-store operator House of Fraser was rescued out of insolvency while rival\u00a0Debenhams<\/a>\u00a0was taken over by creditors. The parent of debt-burdened French grocer Casino has sought court protection from lenders, while rival\u00a0Carrefour SA<\/a>\u00a0is restructuring — announcing a\u00a0deal<\/a>\u00a0over the weekend to sell a majority stake in its China business.<\/p>\n

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As ordinary investors grow wary of the sector, wealthy individuals are moving in. Kretinsky and Tkac would join the likes of Mike Ashley, the billionaire U.K. entrepreneur whose\u00a0Sports Direct International Plc<\/a>\u00a0took over House of Fraser, and Russia\u2019s Mikhail Fridman, who\u2019s moving to take control of Spanish grocer DIA.<\/p>\n

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The 16-euro bid for each ordinary share of Metro -\u2013 a meager 3% premium over Friday\u2019s close in Frankfurt — doesn\u2019t reflect its value creation plan, the Dusseldorf-based company said in a statement. The shares have jumped about 40% in the past 12 months, gaining since Kretinsky and Tkac bought a stake in the wholesaler in August 2018.<\/p>\n

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Kretinsky, who has a net worth of at least $3 billion, according to the Bloomberg Billionaires Index, has no shortage of ambition. After building a portfolio that includes energy and media assets alongside the Sparta Prague soccer team, he acquired a stake in French daily Le Monde last year.<\/p>\n

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A debt-fueled acquisition spree turned Kretinsky\u2019s EPH from a small Czech utility into one of the biggest power companies in central Europe. It values its assets in the Czech Republic, Slovakia, Germany, Italy, the U.K., Hungary and Poland at about 13 billion euros ($14.8 billion), according to the latest available data from 2017.<\/p>\n

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Kretinsky\u2019s EP Global Commerce VI holding company, through which he\u2019s bidding for Metro, declined to comment on the company\u2019s rebuff.<\/p>\n

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The Czech investor already has a 10.9% stake, according to data compiled by Bloomberg, meaning the outlay to swallow up the rest of Metro would be about 5.2 billion euros. Ceconomy AG, the electronics retailer that separated from Metro about two years ago, said Monday that it has sold its 9% stake to EP.\u00a0Haniel Finance Deutschland GmbH<\/a>, a 15% holder, has agreed to back the bid, which would give the bidders about one-third of the equity.<\/p>\n

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Kretinsky\u00a0sees Metro<\/a>\u00a0as a defensive investment to balance riskier, more volatile bets in energy, Haniel Chief Executive Officer Stephan Gemkow said last year, after Kretinsky acquired a stake in Metro. The company\u2019s low valuation attracted him, Gemkow said.<\/p>\n

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The bidders said the company needs to make changes to keep competing in a changing landscape. If his bid succeeds, Kretinsky will have to complete the sale of its struggling Real retail banner to focus more on the wholesale business. Metro, which is also trying to sell its Chinese unit, operates in 36 countries and employs more than 150,000 people worldwide.<\/p>\n

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\u201cMetro will now pursue actions to demonstrate that accepting this offer is not in its shareholders\u2019 best interest,\u201d Jefferies analysts James Grzinic and Frederick Wild said in a note. The company could \u201cdebate the potential to extract strategic value in other geographies.\u201d<\/p>\n

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The bid will be subject to a minimum acceptance threshold, probably in the range of 60% to 75% of Metro\u2019s share capital, two people familiar with the matter said.\u00a0BNP Paribas SA<\/a>,\u00a0Credit Suisse Group AG<\/a> and Societe Generale SA are acting as debt underwriters.<\/p>\n

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Via Bloomberg<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Stores are closing across Europe as consumers shift to e-commerce and discounters barge in. Yet a pair of investors is making an audacious\u00a0takeover bid\u00a0for Metro AG, valuing the German chain that sells food and other staples from no-frills warehouses at $6.6 billion.   The proposal from Czech billionaire Daniel Kretinsky and his Slovak investment partner … Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":7334,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[18],"tags":[541],"jetpack_publicize_connections":[],"yoast_head":"\nKretinsky's Takeover Bid Rejected By Metro AG - Prague Business Journal<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/praguebusinessjournal.com\/kretinskys-takeover-bid-rejected-by-metro-ag\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Kretinsky's Takeover Bid Rejected By Metro AG - Prague Business Journal\" \/>\n<meta property=\"og:description\" content=\"Stores are closing across Europe as consumers shift to e-commerce and discounters barge in. 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