NEW YORK — It looks like Tchibo, the German coffee and retail chain, is ready to start making moves to increase its 30 percent stake in Beiersdorf.
This story first appeared in the October 15, 2003 issue of WWD. Subscribe Today.
Tchibo has reportedly assembled a consortium comprising Tchibo Holding, Tchibo family member Joachim Herz and the state-owned HSH Nordbank to acquire part or all of Allianz’s 44 percent stake in Beiersdorf.
Industry sources close to Tchibo said the company would be meeting with Allianz today to discuss the deal. Last week, Tchibo’s new management reiterated its interest in becoming a majority shareholder in the maker of Nivea, but talks in the past have faltered over price. Sources say Tchibo is prepared to offer the average share price over the last 12 months, or $1.25, or 107 euros at current exchange rates, a share.
Spokesmen for Tchibo were unavailable and Allianz declined to comment. A spokesman for HSH Nordbank also would not confirm its participation in the Tchibo consortium. “We cannot officially confirm any of the reports, nor do we have information that [negotiations] have started.”
Procter & Gamble also remains in the race for Beiersdorf, according to German financial press reports, though chairman, president and chief executive officer A.G. Lafley went on record in the German news magazine, Spiegel, this month, saying P&G would not take part in a hostile takeover. The supervisory board of Beiersdorf have made it clear they would not welcome a takeover by P&G or any international conglomerate, with members such as Jurgen Krause and other Beiersdorf employees meeting regularly to plan strategies to keep Beiersdorf in local hands. German newspaper reports, however, speculate P&G will be making an offer for Allianz’s Beiersdorf stake this week.
With its current 30 percent, Tchibo presents a blocking minority for any party interested in taking full control of Beiersdorf. “Who would be interested in buying this 44 percent if they had resistance from Tchibo, the employees and the supervisory board, which could block any profit transfer agreement and any change of management?” one German analyst commented.
Michael Winkler, analyst for West LB in Düsseldorf, agreed: “I stick to what I’ve always said, which is that Tchibo is in the best position to get hold of part or all of the Allianz stake. They probably only want 20 percent, but the price and amount of shares is the main issue.
“I don’t believe P&G will take the risk and pay a premium to then enter into a two- to three-year conflict with an uncertain outcome,” he continued. P&G could conceivably offer Allianz a higher share price, under the condition that Tchibo agrees to sell its 30 percent, he suggested. “But in the last two years, Tchibo hasn’t moved its position one centimeter, and there’s nothing to suggest that they’re willing to sell now,” Winkler noted.
As for Tchibo being short of the necessary funds to finance the Allianz shares, after shelling out $4.7 billion, or 4 billion euros, to buy out Gunter Herz, former ceo of Tchibo, and his sister this year, Winkler said, “They [Tchibo] will find plenty of people willing to finance this deal.”
Henkel To Take Charges
DUSSELDORF — The Henkel Group said in a statement that, as part of its ongoing restructuring program, it “has identified further optimization potential.” This will result in an increase in the firm’s reorganization charges for this year from $44.3 million, or 40 million euros at current exchange rates, to about $145.6 million, or 125 million euros.
“This figure is above Henkel’s annual expenditure on normal restructuring in prior years,” the company continued. “The one-time expenses in the amount of 85 million euros [$94.1 million] will be incurred in the third quarter of 2003 and will be largely offset by the gain from the sale in the stake in Wella. Both items level out almost completely with regard to the effects on operating profit.”
As reported in June, Henkel tendered its 6.9 percent stake in Wella, which included 5 percent of the voting shares and 10.4 percent of the preferred shares.
Henkel said it expects the announced restructuring initiative to improve its profitability by around 40 million euros a year starting in 2004.
Burt’s New Flavor
NEW YORK — International Flavors and Fragrances has appointed a new board member: Burton M. Tansky, president and chief executive officer of retailer Neiman Marcus Group. “Burton Tansky’s merchandising expertise and understanding of consumers will be invaluable to IFF as we continue to develop innovative products that satisfy the ever-changing tastes of consumers,” stated Richard A. Goldstein, IFF’s chairman and chief executive officer.