Financial Services

UPDATE 1-Haniel could sell its 25 pct Ceconomy stake if good offer

(Adds comment from Metro, Ceconomy declines comment)

DUISBERG, Germany, Sept 4 (Reuters) – German investment group Haniel could sell its 25 percent stake in consumer electronics retailer Ceconomy if the right offer came along, its chief executive Stephan Gemkow said.

Ceconomy split from the Metro retail group last year and separately listed. Haniel owned stakes in both companies but their share prices have sagged since then, dashing Haniel’s hopes that the separation would help boost their performance.

Last month Haniel said it had agreed to sell at least part of its stake in Metro to a Czech-Slovak investor, raising speculation it might also sell its stake in Ceconomy.

“Ceconomy is a financial investment,” Gemkow told journalists. “If somebody was interested and offered a price that you could not resist, I would be active with any of our investments,” he added.

Ceconomy declined to comment.


Haniel’s announcement last month that it had agreed to sell a 7.3 percent stake in Metro to a vehicle of an investor group led by Czech billionaire Daniel Kretinsky for an undisclosed sum, plus a call option for Haniel’s remaining 15.2 percent stake, has also led to speculation about Metro’s future direction.

Gemkow said, in response to a question on Kretinsky’s intentions, that he expected Kretinsky to be a long-term investor in Metro and might also want to take the company private.

“He is a highly professional and serious negotiating partner with a sharp mind and absolutely reliable,” Gemkow said. “Kretinsky can invest capital in Metro – you can shift things here. Haniel was not prepared to invest further into Metro.”

A spokesman for Kretinsky-led EP Global Commerce said it was too early to say if it would remain a minority shareholder in Metro or seek to take it private.

“We welcome every new investor to Metro and are looking forward to getting to know the new stake owner and their ideas,” a Metro spokesman said, reiterating the company’s statement when Haniel’s stake sale was announced.

Ceconomy last week said that it might also sell its stake in Metro to Kretinsky, stoking speculation that the billionaire could make a full bid for the company and take it private.

Metro’s share price tumbled in April when it cut its outlook due to poor performance at its Russian operations, forcing Ceconomy to take impairments on its stake.

Metro, which runs almost 300 stores in eastern Europe, said this month it hoped its shrinking business in Russia had turned a corner despite a quarterly drop in profit and sales.

Kretinsky had no rival during the negotiations with Haniel for its stake in Metro, Gemkow said.

Sources have told Reuters that Chinese conglomerate Fosun International Ltd is in talks with Ceconomy over a possible bid for its stake in Metro. Fosun has declined to comment.

Haniel is Metro’s largest shareholder with 22.5 percent. Ceconomy owns around 10 percent.

Gemkow said there had been tentative talks with Fosun years ago but they had not been in touch while Haniel negotiated with Kretinsky. (Reporting by Matthias Inverardi, writing by Emma Thomasson, editing by Tom Sims and Susan Fenton)


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