Investor interest Advent of a New Age at Media-Saturn

A power struggle between the owners of Europe's largest electronics retailer, Media-Saturn, has caught the interest of private-equity firm Advent, which may be considering a bid.
If only she knew about the boardroom battle...

The financial investor Ranjan Sen is known to be a fan of the retail trade, as a quick glance at his investment history shows.

First, the head of German operations at Advent, one of the largest private equity firms in the world with $32 billion (€28 billion) of managed assets, was involved in the purchase and sale of the fashion discounter Takko. Then he engineered an entry and exit at the perfume company Douglas.

Now Mr. Sen has another big target in his sights: Advent is rumored to want to acquire an interest in Europe's largest electronics retailer, Media-Saturn.

The word is that Mr. Sen has already held talks with representatives of Media-Saturn's minority shareholder Erich Kellerhals, and contacted Olaf Koch, managing director of the majority shareholder Metro, one of Germany’s largest retail groups. The talks have been confirmed by several persons familiar with the situation.

A second investor is said to be in the running along with Advent. None of the participants were willing to make a public statement.

But any attempt to acquire an interest in Media-Saturn, which had sales of €21 billion last year, is unlikely to be plain sailing. A very public power struggle has left the retailer hamstrung in recent years, with Mr. Kellerhals fighting to maintain influence.

Ultimately, both Metro and Mr. Kellerhals view a parting of the ways as the only possible solution to the situation.

He only owns 22 percent of shares in Media-Saturn, but decades ago insisted on acquiring extensive veto rights. In 2011, Metro management annulled this construction by means of an advisory-board construction. Since then, the parties have fallen out, often ending up in court.

The most recent controversy: Mr. Kellerhals opposed Media-Saturn’s acquisition of the maintenance services company RTS but his attempt to stop the takeover by using a temporary restraining order failed.

The next battle line has already been drawn. The contracts of three executives at Media-Saturn are up for renewal and doing so requires the unanimous approval of the shareholders. Mr. Kellerhals is refusing to give his consent.

Quelle: dpa
Anyone seen the remote control?
(Source: dpa)

 

Ultimately, both Metro and Mr. Kellerhals view a parting of the ways as the only possible solution to the situation. But Mr. Kellerhals rejected an offer by Metro to purchase part of his shares and thereby to buy his veto rights from him. Instead he announced plans to take over Metro's share together with other investors.

There are reported to be significant variations in the value assigned to Media-Saturn. So it seems that dealing with the obstinate billionaire Mr. Kellerhals could prove to be just a sideshow for Advent.

 

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This article first appeared in the business magazine WirtschaftWoche. To contact the authors: [email protected]