EP Global Commerce (EPGC), the investment vehicle of Czech investor Daniel Kretinsky, is buying more shares in German retailer Metro from Ceconomy , the companies said on Thursday.
Ceconomy, which split from Metro last year but retained a 10% stake in the retailer, said EP Global Commerce is buying a 9% stake in two steps, 3.6% at first, with a put option for the rest, expected to be exercised in nine months.
The parties agreed not to disclose the purchase price.
Move Stokes Speculation
The move further stokes speculation that Kretinsky and Slovak investor Patrik Tkac - with whom he is buying another Metro stake from investment firm Haniel - might make a full bid for the company whose shares have fallen by a third this year.
If the Ceconomy option is exercised and the Czech and Slovak investors exercise a call option to buy the full Haniel stake, then EP would own 31.5%, above the 30% threshold that would require them to bid for the whole company.
EP Global Commerce said in a statement that the investors had flexibility to further increase their stake in Metro to reach the 30% threshold, or to stay below that level.
"This significant investment reflects their strong interest in the future development of Metro as responsible long-term oriented investors, with the goal to contribute to a positive development of Metro," the fund said.
Focus On Wholesale
Olaf Koch, Metro's chief executive since 2012, has sought to focus the once sprawling conglomerate on its core cash-and-carry business in recent years, selling its Kaufhof department stores and then splitting from Ceconomy.
Metro said last week that it also plans to sell its struggling Real hypermarket chain.
Metro's share price tumbled in April when it cut its outlook due to poor performance at its Russian operations, forcing Ceconomy to take impairments on its stake.
Kretinsky is the majority owner and CEO of power and infrastructure group EPH, which owns power plants in the Czech Republic, Slovakia, Italy, Britain and Germany.
He also owns media, including the Czech Republic's top-selling tabloid, Blesk.
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