DUESSELDORF German retailer Metro AG (MEOG.DE) said it wants to hold on to Europe's biggest electronics chain Media-Saturn despite a fight for control with Erich Kellerhals, the founder and minority owner.
"Media-Saturn has great potential to grow. On the board, we are all of the opinion that we should not part with it," Metro Chief Executive Olaf Koch told journalists at an event late on Wednesday.
Metro is majority owner of Media-Saturn, the world's second-biggest consumer electronics chain after Best Buy Co Inc (BBY.N). It has been fighting for control for years with Kellerhals, who still owns a 22 percent stake and who said in May he wanted to buy back the business.
Metro lifted its holding in Media-Saturn to 78 percent last year when it bought an extra 3 percent stake from co-founder Leopold Stiefel for about 230 million euros. That valued the whole company, which accounts for about a third of Metro's sales, at more than 7 billion euros ($9.55 billion).
Industry sources told Reuters last month that Metro and Kellerhals had discussed a possible sale but had not reached agreement as the company's founder seemed more interesting in persuading Metro to spin off the business than buy it himself.
Koch said he was obliged to consider any concrete offer from Kellerhals but dismissed the idea of spinning off Media-Saturn.
"You can't just split off the company and leave it in other hands without the proper conditions. That would be wrong both strategically and for liability and responsibility reasons," he said.
Koch said he wanted to find a constructive solution to the conflict with Kellerhals, including settling a dispute over the company's acting CEO, Pieter Haas, who Metro appointed in May after the previous boss quit due to the long-running dispute.
Kellerhals is challenging the appointment of Haas in the courts, but Koch said he saw little chance for him succeeding, adding he hoped the two sides could still agree on a permanent replacement.
Kellerhals 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 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. ($1 = 0.7331 euros)
(Reporting by Nikola Rotscheroth; Writing by Emma Thomasson; Editing by Susan Fenton)