DIA shareholder Mikhail Fridman ups stake to 29%, close to launching takeover bid - report (translated)
29 SEP 2018
Letterone Investment Holdings, the investment vehicle controlled by Russian private businessman Mikhail Fridman, announced yesterday (28 September) to the Spanish National Securities Market Commission (CNMV) that it has increased its stake in the capital of supermarket chain Distribuidora Internacional de Alimentacion (Grupo DIA) to 29%, Expansion reported.
The stake, which is divided into 15% in shares and 14% through financial instruments, is valued at EUR 361m at market prices and puts Letterone on the verge of having to launch a takeover bid for 100% of Dia, since Spanish regulation establishes this obligation when the 30% threshold is exceeded, the item said.
As reported, Fridman has already tested its partners to evaluate this possibility. Its main ally in this operation could be Goldman Sachs, the second largest shareholder in the supermarket chain, with a 14.53% stake. In the event of a takeover bid, it will presumably be voluntary, as Fridman's position on Dia's board - he has placed Karl-Heinz Holland, Lidl's former CEO, and Stephan Du-Charme, CEO of Russia's X5 group - makes it very likely to succeed, the Spanish-language paper said citing financial sources.
After the investment made by Letterone, Dia's shares rose 1.34% yesterday, to EUR 2 per share. The supermarket chain, which is capitalised at EUR 1.245bn, has lost 54% on the stock market since the beginning of the year and 66% since July last year, when it reached EUR 6 per share coinciding with the announcement of Fridman's entry into its shareholding.
The decline in value responds to the problems that Dia has been going through in recent months and which have resulted in a drastic reduction in its profits. The group posted earnings of EUR 6m in 1H18, 88.8% down, while net sales amounted to EUR 3.795bn, 10.3% less.