January 21, 2020 / 7:53 AM / a month ago

Meridian, Beisheim hike Metro stake, open to buying more shares

BERLIN (Reuters) - Investors Meridian Foundation and the Beisheim Group have raised their stake in German wholesaler Metro (B4B.DE) to about 23% and are open to buying more shares, they said on Tuesday, adding they believe the firm is undervalued.

FILE PHOTO: German retailer Metro AG sign is seen on the steps of their headquarters in Duesseldorf, Germany March 02, 2018. REUTERS/Thilo Schmuelgen

Czech businessman Daniel Kretinsky and Slovak partner Patrik Tkac failed in a 5.8 billion euro ($6.4 billion) bid to take over Metro last year after Meridian and Beisheim rejected their approach.

“The current stock price does not accurately reflect Metro’s intrinsic value,” Meridian and Beisheim said in a statement on Tuesday, adding they supported Metro’s strategy to focus on becoming a pure wholesale business.

Metro has been selling off assets in recent years to focus on its European cash-and-carry business supplying hotels, restaurants and independent traders, but it is battling sluggish growth in home market Germany and a decline in Russia.

“We welcome the long-term commitment shown by our long-standing shareholders Meridian and Beisheim and see the step they have now taken as a sign that they actively support Metro’s strategy to fully focus on the wholesale business,” Metro said in a statement.

At 1020 GMT, Metro shares were down 0.1% at 13.08 euros.

Meridian and Beisheim pooled their voting rights in Metro in last August in response to the takeover attempt and said back then they wanted to increase their stake from 20.56%. Meridian now holds about 15.87% and Beisheim about 7.19%, they said.

“Based on previous experiences at annual general meetings, they have therefore reached a quorum and can expect a de facto blocking minority in the future,” they said on Tuesday.

In October, Kretinsky and Tkac’s joint investment vehicle EP Global Commerce (EPGC) said it had raised its stake in Metro to 29.99% from 17.52%, just below the threshold that would trigger a full takeover bid.

Kretinsky and Tkac said on Monday they had raised their stake in troubled French retailer Casino (CASP.PA) to 5.64% from 4.63%.

Reporting by Emma Thomasson; Editing by Michelle Martin and Mark Potter

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