Courting Metro

Today it will be hot in Luxembourg as the Metro Board meets and discusses a possible sale of the company (see yesterday’s post). The initial plan of raising an extra €50m from shareholders will probably be put on ice if the offer is considered as being interesting enough.

Largest shareholder Kinnevik (44.1% of shares and 39.2% of votes according to the 2007 annual report) would be the most likely candidate to come up with extra funds, but this shareholder also announced the bid for Metro.

According to The Guardian, the price of the Stockholm-listed company’s A class shares jumped more than 60% after the news broke, the overall value of the company is now around 380m kr (€34m).

Danish media website MediaWatch has been speculating about possible buyers. Mentioned were Schibsted, Bonnier, News International and Springer. A spokesperson from Schibsted declined to comment.

I think Bonnier (an arch enemy of Metro & Kinnevik) is not very likely while News International is not active in most of Metro’s markets which would make it also not likely. Springer, the long-time adversary of free newspapers don’t has any experience with the free model. My guess from these four would be Schibsted as they are already partners in Sweden, have knowledge about the model – in France they could merge while in some other markets both companies are active.

The alternative would be an independent financial party – splitting up the company and selling profitable assets would be the strategy then.

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