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Germany's Ceconomy shrugs off challenge to Fnac Darty stake
August 31, 2017 / 6:59 AM / 3 months ago

Germany's Ceconomy shrugs off challenge to Fnac Darty stake

BERLIN (Reuters) - German consumer electronics retailer Ceconomy rejected on Thursday criticism by a minority shareholder of its purchase last month of a stake in French music and book retailer Fnac Darty.

Erich Kellerhals, the founder of Ceconomy’s Media-Saturn store chain who still has a 22 percent stake, has challenged Ceconomy over its Fnac Darty purchase. He has long fought the Ceconomy’s management and efforts to end the row have failed.

Investors are concerned Kellerhals could seek to thwart Ceconomy’s desire to drive consolidation in the European consumer electronics market, which is seen as ripe for a shake-out due to intense competition from online players like Amazon.

Ceconomy, which has just split off from German retail conglomerate Metro in part to allow it to become more active in acquisitions, announced last month it had signed a deal to buy a 24.33 percent stake in Fnac Darty.

Kellerhals says Ceconomy, Europe’s largest consumer electronics retailer, cannot increase its stake in Fnac Darty above 25 percent due to past agreements between Metro and his Convergenta holding company.

Shares in Ceconomy, which on Thursday reported quarterly sales grew 1.1 percent to 4.74 billion euros ($5.64 billion), were up 0.3 percent by 0722 GMT, while the Fnac Darty stock slipped 0.4 percent.

The WirtschaftsWoche weekly said Kellerhals has reported Ceconomy to Germany’s financial regulator BaFin for alleged market manipulation for suggesting that it could take a bigger stake in Fnac Darty, thereby boosting the Ceconomy share price.

In a conference call with journalists, Ceconomy Chief Executive Pieter Haas said he was unaware that a complaint had been filed to BaFin but said he would welcome the opportunity to clear up the issue.

He rejected Kellerhals’ position that Ceconomy would not be allowed to increase its stake, but said the company was comfortable for now with the shares it bought last month.

He said the latest dispute with Kellerhals showed the need to resolve matters although talks were put on hold due to the split from Metro last month.

Reporting by Emma Thomasson; Editing by Maria Sheahan and Edmund Blair

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