Elliott Stake Complicates Rocket Internet’s Plan to Delist

(Bloomberg) -- Elliott Management Corp. has taken a 15.1% stake in Germany’s Rocket Internet SE in a potential challenge to the startup factory’s plan to delist its shares.

Rocket’s founding Samwer brothers decided in September to take the company private after recent investments failed to match earlier successes such as Zalando, now one of Europe’s largest fashion retailers, and Lazada, a Southeast Asia-focused consumer electronics company.

The investment by New York-based activist investor Elliott emerged when Rocket updated shareholder information on its website. A holding company controlled by Rocket Chief Executive Officer Oliver Samwer and his brothers owns just under half of the company.

A spokesperson for Elliott declined to comment on its reason for taking the stake. A representative for Rocket didn’t respond to a request for comment.

Elliott has a track record of building stakes in listed businesses to challenge management. This month it was part of a consortium of hedge fund investors who forced French-Israeli billionaire Patrick Drahi to pay minority shareholders a higher price to take his telecom and media company Altice Europe NV private.

Rocket shares rose 5.7% to 21.12 euros as of 5:20 p.m. on Tuesday, giving it a market value of 2.9 billion euros ($3.6 billion).

Rocket offered 18.57 euros each for its shares, for a market value of about 2.5 billion euros. However, the company had 1.9 billion euros of net cash on its balance sheet as of April 30, and valued its current portfolio of over 200 private companies at about 1 billion euros as of March 31.

Rocket was frequently valued at more than $10 billion in the months after its 2014 IPO.

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