FRANKFURT (Reuters) -Activist fund Enkraft has urged Germany’s ABO Energy to ensure all shareholders can benefit from a sales process started by the renewable firm, a letter to management showed, concerned smaller investors could lose out in case of a change of control.
In late September, ABO Energy said it had mandated private bank Metzler to advise it on a deal that could see the firm’s founders — whose families jointly hold 52% — cede control to an outside investor.
While German takeover law stipulates that suitors must make a full takeover bid once they cross the 30% ownership threshold those rules do not apply to the less regulated open market, in which ABO Energy is listed.
A spokesperson for ABO Energy, which is currently valued at around 315 million euros ($365 million), said management would seek to achieve a transaction that is equally fair for all shareholders.
Enkraft, which owns more than 4% of ABO Energy, said management was still obliged to treat all shareholders fairly in the sales process and give them the same opportunity to sell their stock if a bidder emerges.
In a letter dated November 5 that was seen by Reuters, Enkraft said management was required to act in the interest of all shareholders if it was “involved in preparing the acquisition, for example by providing non-public information as part of due diligence or by directly appointing an advisory bank for the benefit of a few shareholders”.
Enkraft has repeatedly criticised the firm for strategic decisions – most notably a recent change in its legal form that it said had hurt its access to capital markets.
($1 = 0.8623 euros)
(Reporting by Christoph Steitz; Editing by Susan Fenton)
