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AMSTERDAM -- On the heels of Ahold's flat second-quarter sales growth overall and particularly disappointing results for its American divisions, Centaurus Capital, Ltd., based in London and New York's Paulson & Co., shareholders of Royal Ahold here, issued a statement calling for the retail conglomerate to sell its U.S. businesses and "become a pure-play European player," noting that Ahold "needs drastic strategic action to deliver shareholder value." The two hedge funds own a combined 6.4 percent stake in Ahold.
In the statement, the companies said they believed that "keeping Ahold's disparate retail and wholesale interests together diminishes shareholder value and limits the operating potential of the individual businesses." They added that their analysis was backed by "numerous analysts," whom they didn't name, and their financial adviser, ING Corporate Finance. According to Paulson and Centaurus, a restructured Ahold could be worth over 9 euros, or US $11, per share. That price is about 26 percent higher than the company's share price on Aug. 11.
The companies further said they "will seek to enter into a constructive dialogue with Ahold and exchange views with other stakeholders in the company" on the subject of selling off the U.S. divisions.
According to earlier published reports, Centaurus and Paulsen were at the head of a group of private-equity and trade investors preparing an 11 billion-euro bid for Ahold, but Marco Overmeer, a trader at SNS Securities NV in Amsterdam, told Bloomberg: "These hedge funds want to press the management to create value. I don't think they will try to buy the company. They are just making noise, and I think they are right to do so. Management will have to react.''
Paulson & Co. director and founder John Paulson told Reuters yesterday that he was aware of parties interested in buying Ahold's U.S. operations, although he declined to identify them.