ACTIONS CORNER

ADLER Group S.A.: Will this Bird ever fly again?

If you put it euphemistically, ADLER Group faces special challenges. Already the known corporate governance problems would be enough to overthrow the average market participant. However, the short-term securing of the company´s financing is much more important. Here, the bondholders are in the foreground. 

On November 25th, 2022, ADLER agreed with certain bondholders to effect changes to its notes. According to the agreement, ADLER would commence a consent solicitation process in respect of each series of its notes to implement the proposed changes. Under German law, a quorum for the bondholders representing at least 50% of the outstanding notes in terms of value and the approval by a majority of at least 75% of the voting bondholders to each series of notes is required for the implementation of the proposed changes. Due to the cross-conditionality of the proposed changes through a consent solicitation, if one series of notes fails to reach the 75% threshold, the proposed changes will not be effective for any other series. 

The outcome of the voting was overwhelming support in favor of the consent solicitation with all series of notes but one. In other words, the first attempt failed. Accordingly, ADLER now has to go other ways to possibly reach the goal. A successful outcome is still achievable. But this requires a show running on the very edge of what is possible. 

Brenntag SE: Nice that we talked to each other

Brenntag´s shareholders are probably not satisfied with the course of the share price in 2022. It was only in November that the share price recovered for a short time. But on the 25th this was over. On this day, Brenntag confirmed preliminary discussions with Univar Solutions regarding a potential acquisition. 

This news was not well received by Brenntag´s shareholders. While the share price came under pressure, shareholders also publicly expressed their critical attitude towards these talks, including a request for the immediate cessation of this project. It is therefore not surprising that Brenntag gave in to this pressure. After all, a takeover also costs money. The redeeming message followed at the beginning of January. The company decided that it is no longer proceeding with these discussions. 

It is always gratifying to see that companies listen to their owners. However, corporate communication that is comprehensible to the shareholders is occasionally just as important. After all, the acquisition could have been advantageous for the company´s development and shareholders. It´s a shame we didn´t find out. 

GRENKE AG: With kind Regards to Fraser Perring

Activist investors perform an important task in the German market. Nevertheless, their effects are often underestimated. In fact, one can compare their role most closely with vultures in the field of corporate governance. Their main function is to identify problems, thus contributing to a cleaner capital market.

In the recent past, GRENKE AG was one of Fraser Perrings targets. But see where these attacks led. GRENKE decided to undergo substantial changes in its corporate governance, addressing a multitude of issues uncovered on this occasion. Two years later, the company achieved a top ranking in DVFA´s Corporate Governance Scorecard. Achieving 74.14% (2020: just under 52%) of the maximal number of points, GRENKE advanced to third place among a total of 64 assessed SDAX companies.

So as not to be misunderstood here: The price for this success was high. But the effort was essential for the company´s success.