Press releases

EPGC offers compelling value for shareholders of Metro AG

24. 7. 2019

EP Global Commerce (EPGC) will thoroughly evaluate the reasoned opinion from Metro AG on its voluntary takeover offer. EPGC positively acknowledges the general openness of Metro management regarding the benefits of a takeover as well as their willingness to continue the dialogue with all shareholders. Although EPGC appreciates the effort of the management to reposition the company perception and take measures to support future growth, EPGC continues to be convinced that the offer price to METRO shareholders is very attractive since it already reflects and assumes a significantly improved operational and financial performance through a successful transformation of METRO. The offer price represents an attractive premium of 34.5 percent on the unaffected share price level of METRO’s ordinary shares. The attractiveness of the offer price is further underlined by the implied enterprise value of the transaction compared to the free cash flow from recurring operations of METRO, where the implied levels of such free cash flow are more than 4 times higher than the free cash flow from recurring operations currently generated by METRO.

EPGC views the capital structure for the offer as very solid that supports a sustained growth strategy for METRO including the company´s own strategy and planned transactions. The Bidder will have an equity of up to EUR 2.5bn to finance the offer. In the most likely case of 70% acceptances in the offer and post completion of the envisaged divestments the combined net debt to EBITDA of METRO and Bidder, given the timing and free cash flows generated in the meantime, will be only slightly above 2.5x shortly after the offer settlement, which is also EPGC´s long term target of leverage of METRO and Bidder. Hence the capital structure is tailored made to the company and is optimized to support METRO’s future growth. In addition, EPGC reemphasizes its readiness to support future growth of METRO by reduced dividends in longer run.

EPGC strongly believes that METRO would benefit from a clear shareholder and governance structure enabling it to better address the challenges resulting from digitalization, consolidation and increasing customer demands. The company and the management need a clear mandate to focus on long term growth, not on short term results, which can be achieved only with the simplified shareholder structure with one major shareholder and with a domination and profit and loss transfer agreement in place. Daniel Křetínský and Patrik Tkáč are long term oriented strategic investors and are strongly committed to support a successful long-term growth strategy for METRO.