Our Sponsors

VIPCoFCCGBroadridgeLink Market Services GmbHAHEADhermesDP DHLK+SSAPGeorgesonSuedzuckerWacker Chemie AGThomson ReutersEQS Group



Corporate Governance – portrayed in the individual cultural and legal framework, from the standpoint of equity capital.

VIPsight is a dynamic photo archive, sorted by nations and dates, by and for those interested in CG from all over the world.

VIPsight offers, every month:
transparent and independent current information / comments / facts and figures on corporate governance locally and internationally,

  • written by local CG experts,
  • selected and structured by the Club of Florence,
  • financed by its initiator VIP and other sponsors with a background of “Equity and Advisory” interests.

VIPsight International

Article Index

VIPsight - 3rd Edition 2018




RWE AG: Too much energy in the wood

The Higher Administrative Court Münster abolished the immediate enforcement of the forest clearance as permitted by the main operation plan 2018 – 2020 for the lignite opencast mine in Hambach. As a consequence, RWE has to await the final decision on the further forest clearance, which will be issued later in the main proceedings. Depending on the outcome, RWE may be allowed to resume the forest clearance thereafter.

As a result of the court decision, as of 2019 the EBITDA of the segment Lignite & Nuclear will be negatively affected in the range of a low three digit million Euro amount per year.


Linde AG: Getting closer to the final spurt

Linde AG confirmed that Praxair and Linde aligned on October 1st, 2018 with the staff of the U.S. Federal Trade Commission (FTC) regarding the required sales of business activities in the United States and related commitments and that such remedy package has been submitted to the FTC Commissioners for their decision.

The company added that a successful completion of the business combination is, in addition, subject to the timely receipt of the required buyer approval by the European Commission. According to a prior announcement, the outstanding regulatory approvals need to be granted prior to October 24th, 2018.


Fresenius SE & Co. KGaA: Court backs Fresenius´ exit from merger agreement with Akorn 

In the lawsuit by Akorn Inc. against Fresenius for the consummation of the April 2017 merger agreement the Court of Chancery in the U.S. state of Delaware ruled in favor of Fresenius. However, the judgement is not yet final.

Fresenius terminated the merger agreement due to Akorn´s failure to fulfill several closing conditions. An independent investigation initiated by Fresenius had revealed, among other things, material breaches of FDA data integrity requirements relating to Akorn´s operations. Akorn responded by suing in the court of Chancery in Delaware for the consummation of the agreement.

The news came as a blow to Akorn shareholders. In an initial market reaction, Akorn shares dropped by more than half despite the announcement of the intention to appeal the court decision.


Aurubis AG: European Commission expressed concerns regarding the approval of a sale of the segment Flat Rolled Products

In the course of merger control proceedings regarding the sale of the segment Flat Rolled Products of Aurubis to Wieland Werke AG, the European Commission informed Aurubis and Wieland that clearance of the transaction can probably not be achieved with the proposed remedies. The critical hurdle may be overcome with further remedies. However, Wieland is not obliged to offer these under the terms of the Sale and Purchase Agreement. Hence, Aurubis expects that the execution of the transaction is not any longer more likely than not.

Aurubis made clear that it does not share the Commission´s current assessment and that the parties agreed to continue the merger control proceedings in order to still achieve clearance of the transaction. Nonetheless, the managing board of Aurubis has identified strategic alternatives to the transaction as part of a contingency planning.





Buhlmann's Corner


Two sides of the same coin

A board of management is held responsible for everything and, in accordance with the principle of first among equals, its chair that much more so. Obviously the incumbent does not attend to the nuts and bolts of everything in person, but the totality of scope in organisational detail comes with totality of responsibility for it as a whole.

And so, as was the case of Rupert Stadler (AUDI) for whom the penny didn’t drop until several months after his arrest for fraud, accountability is as vital to responsibility as is a flame is to a moth, German accountables took to dancing in the street when on July 1 1994, Germany introduced D&O insurance (directors and officers). To offset the onus of responsibility, they can demand astronomically high salaries and highly respectable retirement packages which, to all intents, shifts liability to the insurance and reinsurance companies. A measure akin to this had begun to emerge in late 19th Century Prussia only to be quashed by the Minister of the Interior, vehemently opposed to the introduction of insurance of such low morality.

Today, the only detail of interest contained in legal codes and directives is the volume of minimum exemption thresholds. Management board members must abide by rules that cover “all that stuff” that asset managers must perform in order to forestall liability, consult one of the two major vote recommendation agencies and, just to be on the safe side secure the services of both directly – recommendations tend to  be the same anyway.

The only time that their real business – getting paid for freeing asset managers from liability – becomes complicated is when managers do things that the famous rules have not (yet) got round to dealing with. Why on earth should asset managers have to take on any more decision making than what their daily job of investing and disinvesting requires of them. They are the watchdogs who invigilate over the board of management and the Supervisory Board as to whether they act within the terms of the rules of the state and hence the law of the land. This being the case, problems inevitably arise when the mere  two-thirds of those entitled to vote are present at a company AGM and this is deemed sufficient, or the fact that nobody registers surprise when the number of those registered as attending a company AGM turns out to be twice the number of those actually there.

An example of responsibility is DEKA when it sues Volkswagen. If DEKA wins the case every Volkswagen shareholder pays damages to DEKA from their share portfolio.

They had only to dig deeper beforehand and then vote for and/or appoint the best of a better selection. The case took a grotesquely twisted turn when the main actor, the CFO, was promoted to chair the Supervisory Board, the slant being “best not to know”. As regards organisational performance and managerial skills, the management  board pocketed huge sums of money and lost no sleep over withholding knowledge of wrongdoing. Assuming the rumours are true, the Asset Manager sent the proxies and the liability purchased by ISS & Glass Lewis, without verifying where they ended up (requesting a receipt for votes cast perhaps?). Out of sight, out of mind.

But it was accountability itself that rubbed salt into this wound. In Germany, article 2 of the directive on shareholders’ rights amended § 129 Abs. 6 of the law on shares traded on the stock market that gives all shareholders the right to know how their votes were cast. The answer comes in the form of an observable technical function and too late to be of any use when the votes have gone abroad. Responsibility nil liability nil, Game over.

In Germany the so-called Energiewende, which, if the truth were told was nothing short of unconstitutional confiscation had been continually postponed so that the issuers– today known autility companies –  reorganize. Yes, indeed, reorganize because outside the actual companies, all the asset managers had done was promote a bit of light marketing in populist tones raising a half-hearted protest instead of defending the company as a benchmark of sustainability and reference point for co-determination.

The list of sad examples was not limited to  E.on and RWE, Volkswagen or Daimler, but included Deutsche Bank and its wobbly cultural turnaround, and lately Thyssenkrupp too. Hand in glove wih its scientist chair the board of management still needed more time to turn the company inside out, in or counter to shareholders’ interests even after the heads had stopped rolling. Right of appointment introduced in 2007 was at its most costly. Erich SIXT head of his own family stock market traded auto leasing group abolished it with no replacement.

In the end, the first market for D&O insurances was the USA, introduced contemporarily with the infamous Wall Street crash in New York on October 25 1929, Black Friday. The slump that followed brought bankruptcy to a great many banks and companies.


Verantwortung und Haftung

2 Seiten einer Münze

Jeder Vorstand trägt Gesamtverantwortung, der Vorsitzende am stärksten nach dem Grundsatz pars inter pares. Zwar fräst und dreht er nicht jede Schraube selbst, aber über das Institut der Organisations-Verantwortung ist er dran. Und im Zweifel merkt er dann – wie Rupert Stadler (AUDI) – erst weit nach seiner Verhaftung, dass die Haftung zur Verantwortung gehört, wie die Fliege zum Licht.

Genau deswegen haben die Haftenden vor Freude gejohlt, als nach dem 1.7.1994 die D&O Versicherung in Deutschland heimisch werden konnte. Für die Last der Verantwortung konnte man nun hohe Gehälter und dicke Pensionen kassieren und die Haftung dabei in das Netzwerk der Erst- und Rückversicherer fallen lassen. Ende des 19. Jahrhunderts war das schon einmal in Preußen erörtert worden, doch das Preußische Innenministerium wies dieses unmoralische Versicherungsprodukt damals ab.

Nun werden in den Leitlinien und Kodizes nur noch die Selbstbehalte als ganz wichtiges Detail diskutiert. An diese Regularien müssen sich Vorstände halten, denn hier ist auch „alles“ geregelt, was die anlegenden Asset Manager zur Verhinderung ihrer Haftung tuen: sie beauftragen eine der beiden globalen Abstimmungsempfehlungs-Agentur und um ganz sicher zu gehen,  kaufen sie die Deckung gleich bei beiden ein – Unterschiede bei den Empfehlungen sind sowieso eher selten. Schwierig ist deren Geschäft – dem Asset Manager die Haftung gegen Geld wegzunehmen - höchstens dann, wenn Vorstände etwas tun, was im Regelwerk (noch) nicht vorgesehen war.

Photo: VIPsight

Wieso tragen Asset Manager überhaupt Verantwortung (hier abgesehen von deren Auswahl der zu des- /investierenden Gattung)? Sie müssen die Vorstände (und Aufsichtsräte) mit den Werkzeugen der staatlichen Regelwerke (Gesetze) kontrollieren. Da bleibt es schon erstaunlich, dass mit Hauptversammlungs-Präsenzen von 2/3 aller Aktienstimmen Zufriedenheit einkehrt – oder gar mit Präsenz-Ergebnissen von über 100% nur ein Achselzucken erzeugt wird.

Verantwortung zeigt zum Beispiel die DEKA durch eine Klage gegen Volkswagen. Sollte DEKA den Streit gewinnen, zahlen alle Aktionäre des Emittenten den Schadensersatz der DEKA aus dem gesamten Aktionärsvermögen. Die hätten ja vorher aufpassen und vielleicht bessere Manager wählen und bestellen können. Da bleibt es ein Rülpser der Geschichte, wenn der Haupttäter Finanzvorstand zum Aufsichtsrat-Vorsitzenden befördert wurde.

Grafic: HV Magazin Sonderausgabe Locations 2018/19 http://gp-mag.de/hvloc1819

Am Schönsten ist dann immer noch „nichts gewusst“ zu haben. Der Vorstand hat wegen seiner Organisationsleistungen und Managementkompetenz zwar heftig kassiert, lässt sich aber von keinem Schuld begründenden Wissen am Nachtschlaf hindern. Der Asset Manager hat (wenn überhaupt) sein Stimmrecht mit der gekauften Verantwortung von ISS & GlassLewis auf die Reise gegeben, ohne nach einer Quittung zur Stimmrechtsausübung zu fragen: was man nicht weiß, macht einen nicht heiß. Und heiß steht hier für verantwortlich. Hoppla, da regelt das (deutsche) Einführungsgesetz der 2. Shareholder Rights Directive einen neuen §129 Abs. 5 AktG, wonach jeder (!) Aktionär ein Quittungsrecht gegen den Emittenten hat – obwohl das spätestens cross border technisch gar nicht funktionieren kann. Verantwortung weg, Haftung weg und Ruhe ist.

Die so genannte (deutsche) Energiewende, die nichts anderes als eine entschädigungslose (also verfassungswidrige) Enteignung der Aktionäre darstellte, konnte über Jahre verschleppt werden, bis dann die Emittenten –die so genannten Versorgungsunternehmen - sich neu sortiert haben. „Neu  sortiert“ ist schon der zutreffende Passus, denn von außerhalb der Emittenten kam es maximal zu einem marketinggetriebenen Einsatz der Asset Managern, die dem Populismus aufs Maul geschaut, zu mäßiger Kritik aufgelaufen sind, anstatt  den nachhaltigen Unternehmenswert als Maßstab und Richtschnur für Ihre Mitbestimmung anzusetzen. Schlimme Beispiele sind nicht nur E.on und RWE oder Volkswagen und Daimler, auch die Deutsche Bank mit ihrem immer noch quietschenden Kulturwandel und jüngst Thyssenkrupp. Nachdem die Köpfe entnervt gefallen und weggerollt wurden hat es ein wenig gedauert, bis ein Vorstand Hand in Hand mit seinem wissenschaftlichen Vorsitzenden mit, den Konzern gegen oder für die Aktionäre von den Füssen auf den Kopf gestellt wurde. Das 2007 erschaffene Entsenderecht zeigt ich von seiner teuersten Seite – da freut es, wie Familien-Unternehmen (und –Unternehmer Erich) SIXT das Entsenderecht 2018 ohne Gegenleistung bei der börsennotierten Leasing-Tochter abgeschafft hat.

Im Ergebnis blieb es den USA vorbehalten, der erste Markt für D&O-Versicherungen zu werden. Die Einführung dieser Versicherung ging mit dem Börsenkrach (Schwarzer Freitag) an der New Yorker Wallstreet am 25.10.1929 einher. Die damit beginnende große Rezession führte dazu, dass Banken und Unternehmen reihenweise in Konkurs gingen. Es herrschte in der Folgezeit große Verunsicherung in Wirtschaftskreisen. 



Due lati della stessa medaglia

Un consiglio di amministrazione è responsabile di tutto, e il suo presidente ancora di più, secondo il principio del pars inter pares. Ovviamente non può fare tutto da se, ma avendo la responsabilità organizzativa è lui che deve rispondere. E ci sta che – come nel caso di Rupert Stadler (AUDI) – che si renda conto solo mesi dopo il suo arresto che l’accountability appartiene alla responsabilità come la farfallina alla luce.

Proprio per questo motivo gli accountable tedeschi hanno fatto i salti di gioia quando il 1.7.1994 in Germania è stata introdotta la l’assicurazione D&O I (Directors and Officers).  Per controbilanciare il peso della responsabilità potevano chiedere remunerazioni stellari e pensioni di tutto rispetto, spostando la garanzia sulle compagnie di assicurazione e di re-assicurazione. Un tentativo del genere s’era già visto nella Prussia della fine dell’Ottocento. Peccato allora il ministero degli interni si oppose all’introduzione di un prodotto assicurato di così bassa leva morale.

Oggi come oggi, nelle direttive e nei codici l’unico dettaglio di interesse è il volume della franchigia. I membri di un consiglio di amministrazione devono attenersi a quelle regole che coprano anche “tutta quella roba” che gli asset manager devono fare per evitare la garanzia:  chiamare una delle due grandi agenzie di “vote recommendation”, e per andare proprio sul sicuro, comprare il servizio direttamente da tutti e due – tanto, le raccomandazioni sono in genere le stessi. Il loro business – ovvero quello di farsi pagare per togliere la responsabilità all’asset manager – si complica solamente quando gli amministratori fanno delle cose (ancora) non previste dalle famose regole.

Chi glielo fa fare agli asset manager di prendersi una responsabilità (a prescindere da quella di scegliere cosa investire e disinvestire). E’ loro compito di monitorare i consigli di amministratori (e anche i board di sorveglianza) per vedere se agiscono secondo le regole dello stato, e quindi secondo la legge. Ma se è così, è difficile spiegare che ci si accontenta quando in un’assemblea generale solo due terzi dei voti sono presenti – o quando nessuno si stupisce che alla fine di un’assemblea la presenza risulta essere superiore al cento per cento.

Uno che mostra responsabilità è ad esempio la DEKA quando fa causa alla Volkswagen. Se DEKA vince, tutti gli azionisti della Volkswagen pagano il risarcimento alla DEKA dal loro patrimonio azionistico. Bastava che controllare prima e/o votare e nominare dei manager migliori. In quel caso particolare l’ironia della storia è particolarmente grottesca se ricordiamo che l’attore principale (il CFO) è stato promosso a presidente del consiglio di sorveglianza.

Allora meglio “non aver saputo niente”. Per la performance organizzativa e la competenza manageriale CdA si è messo in tasca un monte di soldi, senza svegliarsi di notte per essere a conoscenza di fatti che potrebbero tradire una colpa. L’asset manager ha (se l’ha veramente fatto) spedito i diritti di voto insieme alla garanzia comprata da ISS & Glass Lewis, senza accertarsi dove siano finiti (chiedendo una ricevuta per l’esecuzione dei voti). L’occhio non vede, cuore non duole. E a provocare il dolore in questo caso è proprio l’accountability.  Però attenzione, in Germania legge introduttiva alla 2. Shareholder rights directive ha portato ad una modifica del § 129 Abs. 6 della legge sulle società quotate che dice che ogni (!) azionista ha nei confronti di un emittente il diritto ad una dichiarazione sull’effettiva esecuzione dei suoi voti – anche se al livello tecnico i limiti di questa regola si palesano al più tardi quando i voti sono andati all’estero.

Responsabilità zero, garanzia zero, e basta.

In Germania la cosiddetta Energiewende, che a dire la verità non era altro che un esproprio (anticostituzionale) degli azionisti, è stata per anni rimandata fino a che gli emittenti – oggi chiamati utility companies – si sono riorganizzati. Si, riorganizzati è proprio il termine giusto. Perché fuori dalle aziende stesse c’è stato al massimo qualche iniziativa di marketing promossa dagli asset manager che con un tenore di tipo populistico hanno fievolmente alzato la voce, invece di difendere il valore dell’azienda come unità di misura per la sostenibilità e riferimento per la loro co-determinazione. Tra i tristi esempi non ci sono E.on e RWE, Volkswagen o Daimler, ma anche la Deutsche Bank, il cui cambiamento culturale continua a scricchiolare, e ultimamente anche Thyssenkrupp. Quando alla fine le teste sono cadute, ci è voluto un po’ di tempo prima che un CdA sia riuscito mano nella mano col suo presidente scienziato a capovolgere il gruppo, pro o contro gli interessi degli azionisti. Il right of appointment (Entsenderecht) introdotto nel 2007 si mostra dal suo lato più oneroso – meno male che l’azienda di famiglia diretta da Erich SIXT ha deciso di eliminare senza sostituzione il diritto di appointment nella sua azienda di leasing (quotata).

Alla fine il primo mercato per le D&O insurances è stato quello degli Stati Uniti. L’introduzione  di queste polizze  è avvenuta in contemporanea con il famoso crollo della Borsa di Wall Street New Yorl il 25.10.1929, il Black Friday. La grande recessione che seguì ha fatto fallire molte banche e aziende.










Deutsche Bank AG: BaFin appoints special representative

In order to prevent money laundering and terrorist financing, BaFin ordered Deutsche Bank AG to take appropriate internal safeguards and comply with general due diligence obligations, based on section 51 (2) sentence 1 of the German Money Laundering Act (Geldwäschegesetz).

BaFin also appointed a special representative in accordance with section 45c (1) in conjunction with section 45c (2) no. 6 of the German Banking Act (Kreditwesengesetz) in order to monitor the implementation of the ordered measures. The notice became final on September 21st, 2018.

Furthermore, the management board of Deutsche Bank appointed Stephan Wilken as head of Anti-Financial-Crime and Group Anti-Money Laundering Officer, effective October 1st, 2018. Wilkens replaces an executive who is leaving for Danske Bank to become chief compliance officer and join the board of that bank. Wilken´s appointment is still subject to regulatory approval.








AUDI AG: Fall cleaning I

On October 2nd, 2018, the supervisory boards of Volkswagen AG and AUDI AG finally consented to the conclusion of an agreement with Rupert Stadler on the termination of his offices as a member of the managing board of Volkswagen AG and chairman of the managing board of AUDI AG, as well as his service agreements. According to the press release, Mr. Stadler is leaving the companies with immediate effect and will no loner work for the Volkswagen Group. He is supposedly doing so because, due to his ongoing pretrial detention, he is unable to fulfil his duties as a member of the managing board and wishes to concentrate on his defence. The contractual execution depends on the course and outcome of the criminal proceedings.


Leifheit AG: Supervisory board recalls CEO Thomas Radtke with immediate effect

The homepage still displays a prominent feature of the former CEO, stating “There is still plenty of potential in the Leifheit and Soehnle brands. We want to exploit this potential.” Not with him anymore, though. On October 15th, 2018, the company issued a profit-warning and informed that the supervisory board recalled the former CEO Thomas Radtke as member of the board, releasing him from his duties with immediate effect. The original appointment of Mr. Radtke ran until the end of 2019.

According to the release, the term of Mr. Radtke is linked to the strategy “Leifheit 2020”. Despite a successful start in the initial phase of the implementation, more recently the success “failed to appear”. Hence, the supervisory board had “to accept loss of confidence of investors and business partners.”

Apart from the announcement of changes on the management board, the release also contains a detailed explanation of the amendments to the strategy and the consequences of the measures taken, including a profit-warning, which in part is due to expenses incurred in the context of the recall of Mr. Radtke.

An unfortunate development, but a fair and detailed information of shareholders.


Grammer AG: Ningbo Jifeng lost Grammer´s board members

Following the successful acquisition of an 84-percent stake by its Chinese majority shareholder Ningbo Jifeng, the members of the executive board of Grammer AG announced that they plan to utilize their contractual change-of-control rights and resign as members of the board. As an explanation for this move, the announcement stated that the unexpectedly high acceptance rate of the takeover offer of Ningbo Jifeng resulted in a more clearly than expected shift in the shareholder structure of Grammer AG. 

In particular the CEO Hartmut Müller has been central in the managements strategy to implement the group´s growth strategy, including the establishment of the strategic partnership with Ningbo Jifeng at a time when the company was the target of an unwelcome approach by another strategic shareholder. The change-of-control-clause exercised now by the members of the executive board was introduced in this phase.

The news release clarified that the terms of the business combination agreement with Ningbo Jifeng are still in force. The agreement contains extensive commitments for the preservation of the Group´s national and international sites. In addition, the news release stated that the majority shareholder supports the continuation of the company´s growth and innovation strategy as well as its financing and dividend policies. Furthermore, it indicated that the supervisory board expects to fill the board positions swiftly. 






Capital News


AUDI AG: Fall cleaning II

The Munich II public prosecutor issued an administrative order against AUDI AG in its capacity as affected party (Betroffene) pursuant to sections 30 para. 1, 130 para. 1 of the German Act on Regulatory Offences (Ordnungswidrigkeitengesetz - OWiG) in the context of deviations from regulatory requirements in certain V6 and V8 diesel aggregates and diesel vehicles manufactured or distributed by AUDI AG. The administrative order provides for a fine of EUR 800 million in total, consisting of the maximum penalty as legally provided for of EUR 5 million for negligent regulatory offences and the disgorgement of economic benefits (Abschöpfung wirtschaftlicher Vorteile) in the amount of EUR 795 million. As a result of the administrative order imposing the fine, the active regulatory offence proceedings conducted by the Munich II public prosecutor against AUDI AG will be finally terminated.

AUDI AG accepted the fine and it will not lodge an appeal against it. By doing so, Audi AG admits its responsibility for the deviations from regulatory requirements.


Thyssenkrupp AG: Split into two companies planned

The supervisory board of thyssenkrupp AG unanimously agreed to the managing director´s plan to divide the group into two separate companies via a spin-off.

According to the plan, the industrial goods (“thyssenkrupp Industrials”) and the materials (“thyssenkrupp Materials”) businesses shall be managed as independent, listed companies with direct access to the capital markets each. thyssenkrupp Industrials operates as a pure capital goods business and will consist of three units (elevator business, automotive supplier business and core plant construction). The remaining activities of the group will be concentrated at thyssenkrupp Materials, comprising the steel and stainless steel production including the 50 percent holding in the future steel joint venture, materials trading and steel-related processing.

The two new entities will be of comparable size. Based on pro forma data for fiscal 2016/17, thyssenkrupp Industrials would generate sales of around 16 bn Euro, while thyssenkrupp Materials would have sales of approximately 18 bn Euro.

The split has to be decided at an AGM, which could take place approximately 12 – 18 months from now.


BMW AG: Substantial investments planned in China

BMW announced the intention to raise its holding in the joint venture with its Chinese partner Brilliance China Automotive Holdings, BMW Brilliance Automotive from 50 percent to 75 percent. Both partners signed a corresponding agreement, which still is subject to the approval of the relevant authorities and the consent of Brilliance China Automotive Holdings.

At the same time, the joint venture announced an investment of more than three billion Euro in new and existing plant structures over the coming years, thus increasing the production capacity to 650.000 units from the early 2020s.

The importance of China is indicated by sales of around 560.000 BMW-cars in 2017. Two thirds of all BMW vehicles sold in China last year were produced at the joint venture.

In light of the American-Chinese trade war, it is interesting to note that this is the first ever such move by a global car maker as China begins to relax ownership rules for its market. The relevance of this step for the shareholders of Brilliance China Automotive Holdings was underpinned by an approximately 30 percent share price decline following the announcement of the initiative.


STADA Arzneimittel AG: Time to say goodbye

Nidda Healthcare, a company controlled by Bain Capital and Cinven Partners, published an offer document for the public delisting tender offer for all shares of STADA Arzneimittel AG. The four-week acceptance period will end on November 8th, 2018.

Nidda Healthcare offers a cash consideration of 81.73 Euro per STADA share. This price equals the weighted average domestic stock exchange price of STADA shares during the last six months prior to the announcement of the decision to make a public delisting tender offer. The cash consideration represents a premium of approximately 23.5 percent on the offer price of 66.25 Euro per STADA share during the takeover offer in 2017, and a premium of 10 percent on the cash compensation of 74.40 Euro offered to minority shareholders in the context of the domination and profit and loss transfer agreement.


CECONOMY AG: Profit warning alarms shareholders

In a capital market news release dated October 8th, 2018 CECONOMY warned that based on preliminary figures the 2017/18 EBITDA is expected in the region of 630m Euro, well below last years´ 714m Euro (before special items), while the EBIT would amount to approximately 400m Euro (prior year: 494m Euro before special items). These numbers are well below the data published just three weeks earlier in another prior profit warning published on September 18th, 2018.

CECONOMY did not provide concrete background information about the reasons for the substantial deviation from the first profit warning except for a hint that it is attributable to MediaMarktSaturn Retail Group. But this does not explain why such an amount could evaporate from the earnings expectations within such a short period of time. The lack of appropriate information resulted in speculations that the company may have miscalculated rebates it expected from suppliers, resulting in a sharp decline of the share price.

In an extraordinary meeting held on October 13th, 2018, the supervisory board and the CEP Peter Haas decided to part ways “by mutual consent” with immediate effect. Based on an understanding with the supervisory board, the CFO Mark Freese shall remain in office until the appointment of his successor and an “amicable revocation” of his employment contract has been found. The chairman of the supervisory board, Jürgen Fitschen, added in a statement, that “we are firmly convinced that this is the only way for CECONOMY to restore the trust that has been lost on the capital market.”

Unfortunately, even with the third statement in a row CECONOMY missed the chance to inform shareholders about what really happened and why the CEO left the company with immediate effect, although no replacement seems to be in sight. Full financial disclosure for the past fiscal year 2017/18 shall be published on December 19th, 2018.