UPDATE 1-Media-Saturn founder says bids to buy back chain from Metro

Thu May 15, 2014 5:02am EDT

* Founder locked in dispute with majority owner Metro

* Metro has always said it wants to buy out Kellerhals

* Metro stake buy valued Media-Saturn at almost $10 bln

* Kellerhals critical of Media-Saturn acting CEO

* Metro shares up 2 pct (Adds details, background)

By Emma Thomasson and Matthias Inverardi

BERLIN/DUESSELDORF, May 15 (Reuters) - Erich Kellerhals, the minority owner and founder of Media-Saturn Holding GmbH, has made a new offer to buy back Europe's biggest electronics chain from German retailer Metro AG, alongside other investors, he was quoted as saying on Thursday.

"We have thoroughly calculated and worked everything out," the billionaire was quoted saying by the Sueddeutsche Zeitung daily in an interview. "Funding is not the issue, particularly since I have interested investors." He did not say who the investors were.

Metro, majority owner of the Media-Saturn chain, has been fighting for years for control with Kellerhals, who still owns a 22 percent stake. The dispute escalated in recent weeks, prompting the resignation of Media-Saturn CEO Horst Norberg.

Kellerhals, who has a personal fortune estimated at $4 billion, suggested in 2011 he wanted to buy back the chain, but Metro has always said it wanted to buy out Kellerhals, seeking complete control of the asset and freeing itself from any future arguments with its co-owner.

It repeating that offer as recently as Tuesday.

Metro lifted its holding in Media-Saturn to 78 percent last year when it bought a extra 3 percent stake from co-founder Leopold Stiefel for about 230 million euros, valuing the whole company, which accounts for about a third of Metro's sales, at more than 7 billion euros ($9.6 billion).

Shares in Metro were up 2.2 percent at 0808 GMT, giving the group - which also owns hypermarkets, wholesale and department stores, a stock market value of 9.2 billion euros.

Metro declined on Thursday to comment on Kellerhals' plans, while a spokesman for Metro's biggest shareholder, investment group Haniel, said it hoped for an improvement in the relationship between Metro and Kellerhals.

BEHIND CLOSED DOORS

Metro Chief Executive Olaf Koch was quoted on Tuesday as saying Metro remained prepared to buy Kellerhals' stake in Media-Saturn, but Kellerhals rejected that offer on Thursday, adding Metro had never made him a formal approach.

Koch said he had met Kellerhals last Friday to try to clear the air, proposing to discuss first with him future important decisions before they are formally approved.

But Kellerhals, who blamed Koch for escalating the conflict, looked unlikely to agree, saying he had sent the Metro board a proposal to solve the dispute but received no response so far.

"In public, Mr Koch acts as if he is always ready to talk and seek compromises. But behind closed doors, he does what he wants," Kellerhals said.

He was also critical of Pieter Haas, who Metro appointed last week as acting CEO of Media-Saturn after Norberg's resignation, saying the unit's former chief operating officer had quit the company last year due to a conflict.

"How can I now assume that Media-Saturn has his full loyalty if he won't even give up his board post at Metro?" Kellerhals said of Haas, who has been on the Metro board since 2013.

Kellerhals, 75, opened the first Media Markt store in Munich in 1979, entering into a partnership in 1988 with the forerunner of the Metro Group, which brought Media Markt together with its Saturn chain and drove a global expansion.

Media-Saturn, the world's second-biggest consumer electronics chain after Best Buy Co Inc, is battling online competition and saw its sales fall 4 percent in its fiscal second quarter to 4.88 billion euros, prompting Metro to cut its full-year earnings forecast for the unit last week. ($1 = 0.7294 Euros) (Additional reporting by Monica Raymunt in Frankfurt; Editing by David Holmes)

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