EU CONSUMER CYCLICALS: Metro AG; Daniel Krentisky makes offer to take co private

(MEOGR 29s; NR/BBB- Neg now) 

Bad news for the 29s continues, trades well tight on retail denominations;

• Daniel K held just under 50% but wants to bid for the rest of it. It has triggered a delisting. His offer is at €5.33/share, a 36% premium to last trade. Two majors shareholders have said they will not partake in the tender and instead hold onto their stake (which totals 25%). Looks like that won't stop the delisting process and note reporting quality is likely to fall "the delisting from the regulated market will also terminate some of the comprehensive financial reporting obligations and capital market publication requirements of METRO."

Offer by Daniel K; https://newsroom.metroag.de/en/news/metro-and-epgc-sign-agreement-on-delisting-of-metro-ag?dt=20250205 

• Sales for 1Q (3m to Dec) grew LFL +7% and net of -1.5% FX headwind +5.6%
• That did not translate to margins; reported EBIT down -15%, margin contracting 50bps to 2.3%
• Cash flows even weaker; operating -€14m (vs. +€286m last year), FCF -€324m
  • It looks like some of this is due to extension in payment terms in Russia...
• Outlook unch for FY (ending Sept); sales growth of +3-7% and slight increase in adj. EBITDA from last years €1.1b.