Metro, Europe’s fourth-largest retail group, last week agreed to sell luxury department store Galeria Kaufhof for €2.8 billion, or $3.2 billion, to Canada’s Hudson’s Bay Company. Metro’s chief executive, Olaf Koch, talked with business weekly WirtschaftsWoche about the company’s next steps to grow its consumer electronics, wholesale and supermarket chains.
Mr. Koch, do you already regret the sale of your department store subsidiary Galeria Kaufhof to Canada’s Hudson’s Bay Company?
Why should I? On the contrary: The price is super, the buyer is solid and has a clear strategy for growth, everything is simply right.
Your shareholders apparently see things differently. After the transaction became known, the Metro shares fell by 4 percent.
The share price development on the day of the announcement was not good, especially with its background of being a very attractive transaction with a very good sale price. Three years ago, we were only offered just under €2 billion for Kaufhof. Now we have gotten more than €2.8 billion. We are doing our homework, and most analysts agree. And that will also be reflected in the shares over the medium-term. But it does not make sense to beat ourselves up now over the short-term price performance.
In the past few weeks there were headlines almost daily as to the status of the negotiations. Did that disturb the sale’s process?
The constant weather reports primarily raised a lot of issues about the future of Galeria Kaufhof among the employees, which we were first able to answer after the negotiations were finished. Discretion is important in order to be able to negotiate reasonably. The media circus overall and especially the attempts to publicly position oneself as the best choice are rather counterproductive in a process such as this.