The extraordinary general meeting of the distribution giant Ceconomy approved by a large majority a simplification of the shareholding. This decision aims to give more momentum to the group.
At an extraordinary general meeting, the electronics retailer Ceconomy has set the course for the complete takeover of the Media-Saturn-Holding (MSH) subsidiary. Ceconomy shareholders and preferred shareholders of the company on Tuesday approved the planned simplification of the shareholding structure with more than 98% of the capital present, as reported by a spokesperson for the company.
Full takeover of MediaMarktSaturn by Ceconomy by October
“After today’s decisions, we are very confident that we can complete the Convergenta transaction by the end of September 2022 at the latest,” Ceconomy boss Karsten Wildberger said. “For us, the associated simplification of shareholding is nothing less than a structural liberation.”
With the completion of the transaction, Ceconomy will become the sole shareholder of Germany’s largest electronics chain, MediaMarktSaturn. In return, the former minority shareholder of MediaMarktSaturn, Convergenta, will become a reference shareholder of Ceconomy. “The shareholder dispute that plagued Ceconomy and MediaMarktSaturn for nearly ten years and cost a lot of money is a thing of the past,” Wildberger said.
The family holding of a MediaMarkt co-founder tips the balance
The extraordinary general meeting became necessary after the first attempt to simplify the group’s structure was blocked last year due to shareholder complaints. In fact, the 22% minority stake that Late MediaMarkt co-founder Erich Kellerhals’ family Convergenta holding in MSH is expected to revert to Ceconomy by the end of last summer (DIGITAL TELEVISION reported).
“We are accelerating our decision-making processes and becoming faster and more powerful overall,” Wildberger emphasized on the benefits of the planned new corporate structure. The future shareholding structure also makes it possible to use tax loss carryforwards, reduce administrative costs and further improve corporate governance.
Convergenta is to become a reference shareholder of Ceconomy with around 26% in the future, and Kellerhals Holding can increase its stake to almost 30% through convertible bonds.
Russia’s participation causes Ceconomy headaches
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 reviewing various options,” said CEO Wildberger. Ceconomy owns 15% of the publicly traded electronics retailer. “Access to the shares and the exercise of our rights thereunder are significantly restricted.”
Due to the war, the participation has lost value, which requires depreciation. CFO Florian Wieser estimated the current residual book value of the 15% stake in M.video at around 43 million euros. More 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 activities themselves are not directly affected by the war in Ukraine. “We are not represented in Ukraine and have not been operational in Russia since 2018.” However, he pointed to macroeconomic consequences such as rising energy prices and rising inflation. In addition, the crisis in Eastern Europe is causing uncertainty among consumers, which Ceconomy also feels.
“However, the situation is very dynamic, it changes almost every week. That’s why it’s hard to draw a clear trend.”
Source of images:
- df-mediamarkt-saturn1 : MediamarktSaturn Retail Group