Fosun Is Said to Be in Talks to Buy Ceconomy Stake in Metro

(Bloomberg) -- China’s Fosun International Ltd. is in talks to buy a 426 million-euro ($500 million) holding in beleaguered German wholesaler Metro AG from Ceconomy AG, according to people with knowledge of the matter. Metro’s shares jumped.

Other suitors, including private equity firms, may also emerge for the asset, the people said, declining to be identified as the deliberations are in early stages. The talks regarding the 9 percent stake are preliminary and may not result in a deal, the people said. Representatives for Ceconomy, Metro and Fosun declined to comment.

Fosun’s interest may lead to a bidding war with two little-known Eastern European investors who have been building up a stake in Metro in recent months. Czech billionaire Daniel Kretinsky and his Slovak investment partner Patrik Tkac this month agreed to buy 7.3 percent of the company from Franz Haniel & Cie. and have the option of acquiring Haniel’s remaining 15 percent stake.

Shares of Metro rose 3.2 percent to 13.60 euros at 12:19 p.m. in Frankfurt on Thursday. Ceconomy shares fell 0.4 percent after earlier gaining as much as 2.1 percent.

Kretinsky is also in talks to buy most of Ceconomy’s stake in Metro, the German electronics retailer said Monday.

Under Pressure

For more on Fosun’s serial acquisitions, read this.

Haniel, a holding company which has been invested in the food wholesaler for five decades, saw its Metro holding lose a fifth of its value in the past year amid a rout in the shares that saw the market value plummet to about 4.74 billion euros. Metro’s new owners face challenges including finding a buyer for an ailing big-box chain in Germany and controlling costs for the business in Russia, whose economy is contending with high inflation and waning consumption.

Meanwhile, Ceconomy, Europe’s largest consumer-electronics retailer, is under pressure amid a plunging share price, a costly exit from its Russian operations and its ongoing conflict with the heirs of Media-Saturn Holding GmbH’s founder Erich Kellerhals.

Fosun, the flagship of the drugs-to-insurance conglomerate that Chinese billionaire Guo Guangchang leads, is on a global asset-buying binge. The Shanghai-based company has reviewed almost 25 possible investments a day, on average, since August 2017, totaling about 9,000, it disclosed to investors this week.

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