The German electronics retailer Ceconomy has made good progress with the complete takeover of the subsidiary Media-Saturn-Holding (MSH). At an extraordinary general meeting held online on Tuesday, common shareholders approved all proposed resolutions, including the corporate actions required for the transaction. The preferred shareholders are to vote separately in the followingnoon.
The step had become necessary following the project had stalled last year due to shareholder complaints. Actually, the minority share of 22 percent that the family holding Convergenta of the late MediaMarkt co-founder Erich Kellerhals holds in MSH should go to Ceconomy by the end of last summer.
Multiple shareholder lawsuits
This was already approved by the ordinary general meeting last year. But there were several shareholder lawsuits once morest it. According to Ceconomy, the lawsuits themselves have not yet been finally decided. However, the Düsseldorf Higher Regional Court took the view that, in addition to this approving resolution of the general meeting, in which preference shareholders with voting rights also took part, separate resolutions by ordinary and preference shareholders were also required. The company is now complying.
After years of disputes with the Kellerhals family, Ceconomy wants to take over the minority stake in a complex transaction. With the takeover and the reorganization of the shareholder structure, the group wants to simplify the complicated network of the company. CEO Karsten Wildberger campaigned once more for the project in front of the shareholders: “The transaction creates value in every respect.”
“Check Options”
“The shareholder dispute that weighed on Ceconomy and MediaMarktSaturn for almost ten years and cost a lot of money is history. With the completion of the transaction, we are standardizing our shareholder structure,” he said. Convergenta is then to become an anchor shareholder in Ceconomy with around 26 percent in the future, and Kellerhals Holding can increase its stake to almost 30 percent through convertible bonds.
Meanwhile, Ceconomy is also feeling the effects of Russia’s attack on Ukraine. The company is looking for solutions for its Russian holding M.video. “We are currently examining various options,” said CEO Wildberger. Ceconomy holds 15 percent of the listed electronics retailer. “Access to the Shares and the exercise of our rights thereunder is significantly restricted.”
Business not directly affected
Because of the war, the investment has lost value, which makes write-downs necessary. CFO Florian Wieser put the current estimated residual book value of the 15 percent stake in M.video at around 43 million euros. Most recently, according to his statements, the stake was still on the books at the end of December with around 138 million.
According to Wildberger, Ceconomy’s business itself is not directly affected by the Ukraine war. “We are not represented in Ukraine and have not been operational in Russia since 2018.” However, he pointed to the macroeconomic consequences such as higher energy prices and rising inflation. In addition, the crisis in Eastern Europe is causing uncertainty among consumers, which Ceconomy is also feeling. “However, the situation is very dynamic, it changes almost every week. That’s why it’s difficult to derive a clear trend from it.”
