Two shareholders push for break-up of Ahold
14 August 2006, AMSTERDAM — Two shareholders called on Monday for the break-up of Dutch retail giant Ahold.
14 August 2006
AMSTERDAM — Two shareholders called on Monday for the break-up of Dutch retail giant Ahold.
New-York based Paulson and Centaurus Capital, a hedge fund headquartered in London, issued a joint statement warning that "drastic strategic action" is needed to deliver value for investors, The Financial Times reported.
Together Paulson and Centaurus Capital own 6.4 percent of Ahold's shares. They want Ahold to sell off its business in the US to concentrate on being a "pure play European retailer," the FT said.
"We believe keeping Ahold's disparate retail and wholesale interests together diminishes shareholder value and limits the operating potential of the individual businesses," the groups said.
The pair estimates Ahold's value at more than EUR 9 a share in the event of a restructuring plan being implemented. At that price, Ahold would be worth close to EUR 14 billion.
Ahold's shares were 5 percent higher at EUR 7.45 in early trading in Amsterdam on Monday.
Once seen as a runaway success under former CEO Cees van der Hoeven, Ahold is still struggling, in the face of stiff competition, to recover from a EUR 1 billion accounting scandal unearthed in 2003. Former Ikea executive Anders Moberg was brought in to restructure the company. This was led to the sale of some foreign operations.
But the US, where Ahold's interests include the Stop & Shop supermarket chain, continues to be a problem. Moberg cut his annual sales forecast in half for the US market earlier this year and he is conducting a review of unprofitable units, including the Tops chain.
Ahold owns the Albert Heijn and C1000 supermarket chains in the Netherlands.
[Copyright Expatica News 2006]
Subject: Dutch news