BERLIN (Reuters) – Shares in German wholesaler Metro jumped more than 4% on Monday after EP Global Commerce, an acquisition vehicle owned by Czech and Slovak investors, made a takeover offer that values the company at 5.8 billion euros (£5.18 billion).
EP Global Commerce, which already held a stake of nearly 11% in Metro, made the takeover offer late on Friday, with Metro’s biggest shareholder – investment firm Haniel – already agreeing to sell its 15.2% stake and EP exercising a call option for a stake of 5.4% held by Ceconomy .
Metro said on Sunday that the unsolicited offer substantially undervalued it, noting that the offer price was only 3% above the closing share price on Friday, and advised shareholders to hold off on taking action until management comments further.
Metro shares were up 4.5% at 16.25 euros at a 18-month high.
Bernstein analyst Bruno Monteyne said EP was paying a “rather big premium for a declining business”.
“Clearly management has to do its fiduciary duty to obtain maximum value but we can’t see a higher bid coming along,” Bernstein said, noting that EP already had a stake of more than 30% with the shares from Haniel and Ceconomy.
EP Global Commerce said on Friday that its offer price of 16 euros for each ordinary share and 13.80 euros for each preferred share represented a 34.5% premium to when EP Global Commerce first invested in Metro in August.
The firm, co-owned by Czech investor Daniel Kretinsky and Slovak partner Patrik Tkac, said the offer was “a compelling value and a unique opportunity” for shareholders given the difficult market and challenges facing Metro.
Once a sprawling retail conglomerate, Metro has in recent years been restructuring to focus on its core cash-and-carry business, selling off the Kaufhof department stores and then splitting from consumer electronics group Ceconomy.
It operates in 26 countries with 771 stores and 150,000 employees, and it is trying to offload its loss-making German hypermarkets chain Real, as well as its operations in China.
(Reporting by Emma Thomasson; Editing by Michelle Martin)