Fri. Apr 19th, 2019

The board of Dia accepts Fridman's bid due to the lack of alternatives

The board of Dia accepts Fridman's bid due to the lack of alternatives


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Dia shareholders have no choice but to accept the takeover of Russian tycoon Mikhail Fridman, which controls more than 29% of the capital. That is the recommendation of the board of directors of the supermarket chain for "the high risks" that would imply that the offer did not prosper, but also because they have no other alternative. The council supports the operation and has approved unanimously the report on the takeover bid presented by LetterOne, a company of Fridman, which sets a price for 67 cents per share. The financial advisors highlight the delicate situation of Dia to be in technical bankruptcy and the risk of dissolution or competition if the tender does not go ahead.

For their part, the Rothschild analysts explain that, given the situation of Dia, the takeover "may represent an opportunity for shareholders seeking immediate liquidity or who do not wish to incur the risk of an possible scenario of refinancing, recapitalization or insolvency ».

Given the intention of LetterOne to renew the board of directors, counselors Julián Díaz González, María Luisa Garaña, Richard Golding, Angela Spindler, Mariano Martín and Antonio Urcelay have advanced that if the bid goes ahead they will accept to sell their participation in Dia and resign. This would mean the departure of all council members, except Jaime García-Legaz, who does not have titles in property, and Borja de la Cierva, CEO of the company, who would remain at the front "waiting for the decisions" of the new council.

The National Securities Market Commission (CNMV) gave the green light a few weeks ago to the operation. Specifically, under the OPA, which values ​​Dia in a total of 417 million euros, LetterOne would disburse more than 29% million for 71% of the supermarket chain that it does not yet control. On March 20, the shareholders' meeting of Dia supported the capital increase of the company of Fridman for 500 million euros, but before, the Russian investor demands that its share in the company pass from 29% to at least the 64.5%.

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