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Corporate Governance – portrayed in the individual cultural and legal framework, from the standpoint of equity capital.

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VIPsight International

Article Index



VIPsight - April 2011



Quandt pledges BMW shares

Photo: www.brauchitsch.comAs emerged just last month, BMW heir Stefan Quandt in 2009 pledged his 17.4 percent stake in BMW, Stefan Quandt GmbH & Co. KG für Automobilwerte, to keep his loss-making investment firm Delton alive through a loan of 200 million euros. In 2002, the Delton holding company still held five participations. Since, the portfolio has shrunk to two companies, homeopathic-medicines supplier Heel and logistics firm Logwin. Together with his mother and sister, Stefan Quandt holds 46.7 percent of carmaker BMW. His sister, Sabine Klatten, is far more successful with her holding company Skion: it is involved in carbon specialists SGL Carbon and wind-turbine manufacturer Nordex.


Commerzbank plans capital increase

Already at the presentation of the financial statement for 2010 in February, Commerzbank CEO Martin Blessing had announced its intention to pay back at least ten percent of the federal government’s silent partnership by 2011. The Frankfurt bank had received a total of 18.2 billion euros in support from the federal government in the wake of the financial crisis, 16.4 billion euros of it as a silent contribution. Now the institution reportedly plans a capital increase, to be initiated at the shareholders' meeting on 18 May. The corporate action could be carried out by the end of the second quarter, in the course of which, according to Financial Times Deutschland, five to seven billion euros that could be invested in the repayment of the federal aid are to be raised. Thanks to book profits as a result of the repurchase of its own bonds in January, the bank was able to end the first quarter with a billion-euro profit. Meanwhile, Commerzbank has announced that Deutsche Schiffsbank, a leading global provider of ship finance, will be merged into Commerzbank. Commerzbank currently holds 92 percent of the Hamburg institution, in which the credit portfolios of Deutsche Schiffsbank, Dresdner Bank and Commerzbank have been combined. Discussions with the co-owner UniCredit are in hand.


Schaeffler dares partial exit

At the end of March, the Schaeffler family firm managed a partial retreat. The Bavarian roller-bearing manufacturer, which in 2009 still wanted to take over the Hanover automotive supplier Continental, got rid of 29.7 million Continental shares, thus raising 1.8 billion euros. Goldman Sachs had placed the papers on 28 March at €60. With this money the family empire lowered the debts of the family holding by €2.8 billion to €4.6 billion, thus improving the terms for other ongoing bank loans. As a result of the partial withdrawal, the free float at Continental rose from 24.9 percent to 39.7 percent. Chances are good that the currently MDAX-listed tire maker will again be included in the DAX. Through the transaction, the Schaeffler stake in Conti declined from 75.1 to 60 percent. The actual merger of both companies planned for 2011 is still on ice.


Telekom sells U.S. business

By 2012 at the latest, Deutsche Telekom’s U.S. commitment will end, according to the schedule for the sale of its U.S. business recently agreed with AT&T. Germany's largest telecommunications provider will receive 39 billion U.S. dollars for T-Mobile USA, 25 billion U.S. dollars of it in cash and 14 billion dollars in shares of the buyer AT&T. The Bonn-based company will thereafter hold eight percent of the U.S. provider and get a seat on the AT&T Board. Deutsche Telekom shareholders will benefit through a share buyback programme of up to five billion euros and a guaranteed minimum dividend in the years 2010 to 2012 of 70 cents, or 3.4 billion euros annually. Around thirteen billion euros will flow into reducing debt. Deutsche Telekom had bought the mobile operator Voicestream in 2000 for €39 billion and later renamed it T-Mobile USA. Both the U.S. Department of Justice and the regulator (FCC) must yet approve the deal.


Quarrels at Douglas

Since drugstore chain Müller came into retail group Douglas at 10.06 percent, the Hagen company is buzzing with rumours. As Financial Times Deutschland reported, Ernst Schröder, chief financial officer at Douglas major shareholder Oetker, had criticized Douglas CEO Henning Kreke at a supervisory-board meeting at the end of February for his defence strategy against Müller as weak on enforcement. Henning Kreke himself had commented on the Müller participation with the words, “Müller doesn’t fit between Oetker and Kreke.” Now, Henning Kreke’s father, supervisory board chair Jörn Kreke, has signalled co-owner Oetker he wants to get more actively involved in daily business again in future. Oetker holds a 25.81 percent stake in Douglas, and Henning and Jörn Kreke a further 12.14 percent.


EADS slows Daimler phase-out

German carmaker Daimler wants to run down its 15 percent stake in the aviation and aerospace group EADS to 7.5 percent, and is probably talking about it with the German government. The condition is that the fragile French-German balance within the group should be maintained. In March, EADS CEO Louis Gallois hinted, according to Financial Times Deutschland, that there would be no proposal for an acquisition programme of shares of major shareholders at the next AGM. This is a clear rejection by Gallois of any internal compromise solution. Regarding employees too, said Gallois, we need a solution that is sustainable and not just for a few years. The Frenchman prefers to invest the liquid assets of twelve billion euros in acquisitions, including in the U.S., so as to be more independent of the fluctuating Airbus results. The Daimler stake of 7.5 percent is currently worth around 1.23 billion euros. Parallel to the current disputes, the exposure portal Wikileaks reported that in 2005-2009 the U.S. government had regular information about the disputes within EADS. Inter alia, former British partner BAE was called schizophrenic after it left, and co-CEO Noel Forgeard described as an over-ambitious madman. This information leak is controversial also because the U.S. government and therefore competitor Boeing was supplied with valuable background information.


Gigaset in the TECDAX

With effect from 21 March, semiconductor industry supplier SüssMicrotec replaces automation specialists Manz Automation in the technology index TecDAX. Solar provider Conergy also falls out of the index. It is succeeded by Gigaset, the investment company in the telecommunications area. Gigaset emerged from the former Arques Industries, and made the jump to the TecDAX by categorizing as a technology company. In the MDAX and DAX, there were no changes.


MAN blocked

Commercial-vehicle manufacturer MAN had already postponed publication of its own annual report from the beginning to the end of March. Now, the general meeting has been reset from 8 April to 27 June, thus exhausting the legal leeway altogether. The background is still the conflict between the Munich lorrymaker and the Abu Dhabi state fund IPIC (International Petroleum Investment Company). The Arabs had acquired 70 percent of MAN subsidiary Ferrostaal in 2009 for €450 million. Since 2010, both parties have been negotiating the acquiring of the remaining 30 percent. The negotiations have been blocked through the involvement of Ferrostaal in the MAN bribery affair. The industrial-services provider is threatened with compensation payments of €200 million. IPIC does not want to be made liable for this and is now demanding compensation from MAN for the threat of fines, and a discount for the remaining shares. Meanwhile, the Fund has even filed an arbitration claim for reversal of the already acquired shares. MAN is now considering an arbitration defence. The explosive nature of the quarrel is enhanced by the fact that automaker Volkswagen wants to merge the two commercial vehicle manufacturers MAN and Scania as soon as possible. VW has 30 percent of MAN and 70 percent of Scania. The condition for the merger is, however, agreement between MAN and IPIC. Originally, the schedule was that Scania would submit a takeover bid to MAN in April, or at latest in May.

Hapag Lloyd postpones IPO

On 15 April, the world's fifth-largest shipping company Hapag Lloyd is to go public. After the earthquake in Japan and the war against Gaddafi the stock plans have been postponed to late May. The former parent, tourism group TUI, got rid of a share package of 11.3 percent in advance and sold it for 315 million euros to the logistics company Kuehne + Nagel, part of the Hapag-Lloyd consortium Albert Ballin, which will in future hold 25 percent of Hapag. TUI has been looking for quite some time for ways out of the shipping business, so as to focus on the tourism business. In addition to an exit via an IPO, the Hanover people are also considering selling their stake, currently 38.4 percent. In the medium term TUI wants to hold only up to ten percent of the shipping-company subsidiary.


VW annoys BMW

Volkswagen came into SGL Cin late February as the second-largest shareholder at 8.18 percent. BMW co-owner Susanne Klatten holds 22 percent through Skion, and was more than peeved at the advance by Piëch. She indicated she would if necessary expand her share to over 25 percent and thus secure a blocking minority. VW initially suggested the group did not aspire to a Supervisory Board seat. The company itself has welcomed the commitment by Wolfsburg. In a joint venture with BMW, SGL Carbon has since 2009 been developing carbon fibres for electric cars.


Is Tognum getting more expensive?

The planned incorporation of Tognum could be more expensive for Daimler and Rolls-Royce than expected. The automaker and the British turbine manufacturer are offering shareholders of the diesel-engine manufacturer a purchase price of €24 per share, so that the bid volume would according to the two companies amount to about 3.2 billion euros. But the bid does not meet the expectations of the Tognum management involved. Based on the weighted average share price during the past three months, the calculated surcharge according to the Börsenzeitung is about 22 percent. The offer must also be approved by the Federal Financial Supervisory Authority (BaFin) before it is officially announced.