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€5.8bn bid launched for Germany's Metro

June 23, 2019

The board of the world's eighth-largest retailer has advised shareholders to reject the offer, saying it was far too low. The German wholesaler is present in 25 countries, but has struggled in recent years.

Metro wholesale hypermarket in Berlin
Image: picture-alliance/dpa/Bildfunk/S. Kugler

A Czech billionaire and his Slovak business partner have made a €5.8 billion ($6.6 billion) takeover bid for ailing German wholesaler Metro AG, the company confirmed on Sunday.

Businessman Daniel Kretinsky's firm EP Global Commerce submitted its bid on Friday after the markets had closed.

EP, which is co-owned by Slovak Patrik Tkac, has valued each ordinary share at €16.00, giving a 3% premium on the closing share price on Friday of €15.55.

Metro, the world's eighth-largest retailer by revenues, said it would study the offer in full over the next few days, but immediately advised shareholders against selling their shares. 

Read more: Germany staves off a retail 'apocalypse' — for now

Germany’s Kaufhof and Karstadt to merge

EP given cold shoulder

The board is convinced that the offer "significantly undervalues ​​the company and does not reflect its (future) value creation plan," the wholesaler said in a statement.

Metro's shares have risen by more than a third over the past 12 months due to growing takeover speculation.

EP previously obtained nearly 11% of the wholesaler and has already secured the option to buy the holdings of other German retailers, Haniel and Ceconomy, which would amount to a further 20.6% stake.

In its takeover bid, EP said there was no radical restructuring plan for Metro or its 146,000 employees. 

Read more: Oxfam slams German supermarkets over 'unfair practices'

"There is no intention to close existing Metro stores in Germany or other core markets of the Metro Group, or to cut jobs on a large scale." EP wrote.

Czech billionaire Daniel Kretinsky
Billionaire Daniel Kretinsky has huge energy and media interests across EuropeImage: picture-alliance/dpa/M. Divizna

Kretinsky has established himself as a financial magnate in Europe in recent years, making numerous acquisitions, particularly in the energy sector.

His energy holding company EPH manages more than 50 power plants and mines in Germany and six other European Union countries.

Read more: Tchibo calls on government to regulate garment industry

Metro still struggles

Metro operates 771 wholesale stores in 25 countries and achieved global revenues of €36.5bn in its last fiscal year. It reported a net loss of €459 million in the second quarter of 2019, mostly as a result of difficulties at its hypermarket chain, Real.

Metro was once the world's fourth-largest retailer, after Walmart, Carrefour and Tesco, but years of difficulties have prompted it to offload several subsidiaries, including the department store chain Kaufhof in 2015.

Retail giant Metro Group to split in two

Electrical brands MediaMarkt and Saturn were spun off a year later into a separate company.

Metro said on Sunday that EP's bid would not affect its plan to sell Real this summer to Hamburg-based real estate investor Redos.

mm/jlw (AFP, dpa, Reuters)

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