Steinhoff to Settle With Old Foe Seifert After POCO Sale Pact
(Bloomberg) -- Steinhoff International Holdings NV, the global retailer struggling to survive an accounting scandal, agreed to end a bitter dispute by selling half of German furniture chain POCO to former business partner Andreas Seifert.
The impetus for the deal came from a German judge who on Wednesday urged both sides to settle for an amount that is a multiple of POCO’s earnings. Eventually they valued POCO at 532.5 million euros ($648.9 million), amid a fractious hearing that was stayed twice to allow private talks.
"We’ve been fighting so long, but finally things moved so quickly," Seifert said when leaving the courtroom.
Seifert, owner of furniture retailer XXXLutz, has battled on many fronts against his former partners, filing lawsuits in three countries as well as criminal complaints. The German cases, filed in 2015, concentrated on who owned POCO. Seifert and Steinhoff initially each held 50 percent and both claimed to have kicked out the other partner under company rules. An Amsterdam court in February ruled that Steinhoff couldn’t claim full ownership. At Wednesday’s hearing in Dortmund, Germany, the court also hinted that Steinhoff’s position has weakened.
Hole in Accounts
Steinhoff has lost more than 90 percent of its value since the company reported a hole in its accounts in December. The dispute with Seifert had contributed to its woes. A lawyer for Steinhoff said at the Dortmund hearing that the company had previously failed in its attempts to reach out to Seifert. Recent court filings were meant as a "peace proposal to Dr. Seifert," she said.
Steinhoff had argued POCO needs to be valued at 650 million euros whereas Seifert saw it at 472 million euros. The deal is preliminary and details will be finalized in the coming weeks, including sorting out antitrust concerns. The sale price includes POCO’s real estate.
While at the beginning of the hearing Seifert seemed to be reluctant to agree to talks, the framework for the deal came about after two private sessions.
"We negotiated like horse or carpet dealers and met on the middle ground," POCO founder Peter Pohlmann said. "POCO fits better with XXXLutz."
The German case is: LG Dortmund, 10 O 72/15.
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