Ahold: No Comment On Tesco Takeover Talk
AMSTERDAM - Royal Ahold NV declined Thursday to comment on market rumors that U.K. supermarket chain Tesco PLC is looking at the possibility of taking it over.
Ahold's interim chairman Henny de Ruiter last month rebuffed suggestions that the company could be taken over following the disclosure of accounting irregularities at its U.S. Foodservice division, according to a Dow Jones newswire report.
"I don't believe a takeover is the only means of rescuing Ahold," de Ruiter said in a television interview.
Since the Feb. 24 disclosure and the collapse in Ahold's share price, reports have speculated that Tesco could make a move on Ahold.
But Ahold, like many Dutch companies, can protect itself against a hostile takeover by issuing shares to a friendly entity. As set out in its annual report, Ahold has granted an option to Stichting Ahold Continuiteit, or Ahold Continuity Foundation, to buy cumulative preferred shares up to the total value of all outstanding shares of its capital stock.
This is provided for in Ahold's filing 20F with the Securities and Exchange Commission, according to Dow Jones, which says, "The option agreement and the cumulative preferred share have certain anti-takeover effects. The issuance of all authorized cumulative preferred shares will cause substantial dilution of the effective voting power of any shareholder, including a shareholder that attempts to acquire us, and could have the effect of delaying, deferring and preventing a change in our control."
Ahold's interim chairman Henny de Ruiter last month rebuffed suggestions that the company could be taken over following the disclosure of accounting irregularities at its U.S. Foodservice division, according to a Dow Jones newswire report.
"I don't believe a takeover is the only means of rescuing Ahold," de Ruiter said in a television interview.
Since the Feb. 24 disclosure and the collapse in Ahold's share price, reports have speculated that Tesco could make a move on Ahold.
But Ahold, like many Dutch companies, can protect itself against a hostile takeover by issuing shares to a friendly entity. As set out in its annual report, Ahold has granted an option to Stichting Ahold Continuiteit, or Ahold Continuity Foundation, to buy cumulative preferred shares up to the total value of all outstanding shares of its capital stock.
This is provided for in Ahold's filing 20F with the Securities and Exchange Commission, according to Dow Jones, which says, "The option agreement and the cumulative preferred share have certain anti-takeover effects. The issuance of all authorized cumulative preferred shares will cause substantial dilution of the effective voting power of any shareholder, including a shareholder that attempts to acquire us, and could have the effect of delaying, deferring and preventing a change in our control."