Czech billionaire Daniel Kretinsky has confirmed that his offer to take over German retailer Metro AG for 5.8 billion euros was unsuccessful and said it is now up to management to show that the company is worth more, reports Reuters.
EP Global Commerce (EPGC), the investment vehicle owned by 53% of Czech billionaire Daniel Kretinsky and 47% of Slovakian investor Patrik Tkac (co-founder of the J&T group of companies), had announced on Monday that it would not increase the offer, after not has managed to reach an agreement with the shareholders of Metro Meridian Stiftung and Beisheim Holding, which hold a nearly 21% stake.
Kretinsky told reporters that EPGC will not increase the offer of 16 euros per share and all options are now open, adding that he is a long-term investor and wants to see how the company will grow in the future.
EPGC criticized Metro’s plan to sell the Real hypermarket chain, valued at about one billion euros, to a consortium led by the Redos real estate developer, because the price was too low.
EPGC bought Metro shares last year when the shares registered a record low last year, due to poor performance in Russia and worsening financial prospects.
Last month, Metro AG recommended to its shareholders to refuse the offer to take over from EP Global Commerce as it substantially underestimates the German retailer.
Daniel Kretinsky and Patrik Tkac argue that the € 5.8 billion offer “represents a unique opportunity for shareholders”, taking into account the difficult market conditions and the difficulties Metro faces. The bidders indicated that further changes to the Metro are needed, although they have given assurances that they will not close stores in Germany and on the core markets and will not make substantial redundancies.
However, Metro said that both the management and the Supervisory Board recommend to shareholders not to accept the offer.
“We consider the price offered by EPGC to be inadequate because it substantially underestimates Metro and, even after reviewing the conditions, I recommend to shareholders not to accept it,” said the general manager of the German retailer, Olaf Koch.
EP Global Commerce, which already owns a nearly 11% stake in Metro, offered 16 euros for each common share and 13.80 for each preferred share, representing a premium of 34.5% compared to August 2018, when Global Commerce has made his initial investment.
Kretinsky, whose fortune is estimated by Forbes at 2.3 billion euros, has made many acquisitions in Europe in recent years, especially in energy, and has taken over some of the Eastern European radio stations belonging to the French media group. Lagardere. He also owns the Sparta Prague football club.
Last year, the main shareholder of Metro, the German group Haniel, announced that it had reached an agreement to sell a 7.3% stake of Metro capital to the investment vehicle EP Investment, which has an option to take over. and the rest of Haniel’s shares in Metro at a later date.
Also, Czech billionaire Daniel Kretinsky, who also heads the Czech energy group EPH, said he is convinced that it can play a positive role in Metro’s development. After transforming EPH into one of the largest energy groups in Europe, Kretinsky has made other investments in recent years, with the most recent taking over part of the Eastern European radio station belonging to the French media group Lagardere.