A Czech investor with increasing influence in Germany sealed two deals in as many days that could lead to a mandatory offer for German retail giant Metro. An investment vehicle of Daniel Křetínský is in talks to buy a 9 percent Metro stake from electronics retailer Ceconomy. Another of his vehicles, which is held together with partner Patrik Tkáč, announced Friday it would buy 7.3 percent of Metro from the wealthy Haniel family.
The Friday agreement includes an option for the Haniel’s remaining 15.2 percent stake, which could give Mr. Křetínský 31.5 percent of Metro, which is best known for its cash & carry warehouses. Metro shares rose on the announcement, trading up 11.1 percent in mid-day trading at €13.22. No prices were given in any of the purchases, but the company is currently worth €4.2 billion ($4.9 billion).
If Ceconomy decided to sell to the Czech billionaire, it would be the final chapter in a restructuring of Metro that has tracked changes in consumer taste. The Haniel family, based in the western industrial city of Duisburg, has been the largest Metro shareholder for over half a century and helped build it from a regional wholesaler into an international wholesaler and retailer that runs its trademark Metro wholesale warehouses as well as Real supermarkets. The retail group also included department store chain Galeria Kaufhof until it sold the ailing brand to Canadian peer Hudson’s Bay in 2015.
Combining coal and retail
The Haniels, with around 680 family members, were ranked as Germany’s fifth-richest family last year, with €6.8 billion in assets, according to business monthly Manager Magazin. The family had expanded Metro into electronics with Saturn and MediaMarkt stores in the 1960s, but management decided in 2016 to separate the two businesses. Metro now has annual revenue of €37 billion and operates in 25 countries.
The electronics business, which also includes a handful of Internet services, has been rebranded Ceconomy and Metro got its own listing last summer. The spin out left both Metro and Ceconomy with 10 percent cross shareholdings in each other, and Haniel with 22.5 percent of Metro and 25 percent of Ceconomy.
Mr. Křetínský said in a statement Metro faced several challenges, such as Germany’s highly competitive food retailing environment and bumpy units in Russia. At the same time, he said he could help the company: “We intend to use the call option period to confirm our belief that we, as shareholders, could play a positive role for the company and support its future development in the right way.”
The statement is important because Mr. Křetínský would be required by German securities law to launch an offer to take Metro private if he acquired more than 30 percent of the company.
Mr. Křetínský, who is estimated to be worth $2.6 billion, is not an unknown investor in Germany and has already bought into at least one aging industry. One of his vehicles bought 94 percent of the lignite coal business of Swedish utility Vattenfall in 2016 to complement the earlier purchase of the eastern German Mibrag mining company. The Czech billionaire does have experience in retail: He and his business partner Mr. Tkáč also own 40 percent of Mall.cz, the Czech Republic’s No. 2 online retailer behind Alza.cz.
Andrew Bulkeley is an editor in Berlin for Handelsblatt Global. To contact the author: email@example.com