The sale of a €1bn stake in El Corte Inglés to a prominent Qatari investor has sparked a public dispute between top shareholders at the Spanish department store chain, amid complaints that the deal undervalues the group and includes several contentious conditions.
Ceslar, a family-owned investment vehicle that owns close to 10 per cent of El Corte Inglés, issued a statement on Wednesday denouncing the sale as a “manoeuvre to sideline traditional investors and secure the power of current management”. Ceslar was one of two large shareholders that refused to support the deal at a July board meeting, but both were ultimately outvoted.
El Corte Inglés announced last month that it was selling a 10 per cent stake in the group to Sheikh Hamad bin Jassim bin Jabr al-Thani, a former Qatari prime minister and high-profile dealmaker. His investment was made in the form of a “convertible instrument” that will convert into shares after three years. The shares will be taken from treasury stock held by El Corte Inglés.
According to Ceslar, the group has committed to pay Sheikh Hamad an annual interest of at least 5.25 per cent, which could rise to as much as 7.5 per cent if certain growth targets are not met. “[We] regret that this contract involves interest payments far above the market rate, and with a series of penalties that always favour the Qatari investor and that in any case lack any justification,” the investor said.
Ceslar also criticised the payment of what it said was an “elevated commission, worth millions of euros” to an unspecified company involved in the transaction.
El Corte Inglés did not immediately respond to a request for comment.
When the deal was announced, the group said in a statement that the Qatari investment was “very satisfying for both sides”. It added: “The new shareholder will accompany us in our growth and expansion, in a spirit of co-operation.”
For Sheikh Hamad, who is also a former head of the Qatar Investment Authority, the deal with the Spanish retailer was the latest in a string of recent acquisitions. Last year he bought Heritage Oil, an independent producer with a focus on Africa, for £924m and invested €1.75bn in Deutsche Bank.
The El Corte Inglés transaction was formally approved by the board in July, but can only proceed once the group amends its statutes. The board is expected to vote on the change later this month — offering Ceslar another opportunity to register its protest.
El Corte Inglés is one of the best-known Spanish companies, thanks to its eponymous chain of department stores that often dominate high streets in major cities across the country. The group also owns supermarkets and hypermarkets, travel agents, opticians and mobile phone stores.