Price Break: Ceconomy shares benefit from entry on Freenet – Freenet shares are down | message

Mobile service provider Freenet joins parent Media Markt and Saturn Ceconomy. About a capital increase, the company TecDAX secures about 9% of the operator of two major electronics retailers, as both companies announced Friday, surprisingly, after the market closed. However, the experts reacted with skepticism to news about Freenet. The meaning of the transaction and the purchase price caused frowns.

The reaction and badessment of consequences for Ceconomy are very different. On Monday, news on Monday caused prices to rise in Düsseldorf. Ceconomy gained 10.11% to 7.86 euros and climbed the top of the MDAX. On the other hand, Freenet shares slipped at the end of TecDAX and lost 4.2% to 21.74 euros. The strategic and financial benefits for Freenet are limited, writes Heike Pauls, an badyst at Commerzbank. This raises questions about the discipline of the company's capital.

Also the high purchase price called a Börsianer as unusual. Freenet pays more for the investment than the last Ceconomy value. Freenet puts 8.50 euros per share on the table, the closing price of the main business of Xetra Friday was 7.138 euros. Freenet boss Christoph Vilanek has qualified the price as appropriate but

Ceconomy wants to use the proceeds of the capital increase of about 277 million euros to strengthen his own balance sheet and continue to implement its own strategy. Pauls, an badyst at Commerzbank, also questions the strategic importance of Goldman Sachs' expert, Joshua Mill. Freenet is a large wireless service provider that does not have its own network, which leases lines from Vodafone network operators (Vodafone Group) and Deutsche Telekom and sells its own mobile phone contracts on this basis.

freenet and MediaMarktSaturn have a longstanding partnership. Freenet's subsidiary Mobilcom-Debitel has been selling its own mobile phone contracts in the electronics markets for more than 25 years. Freenet boss Vilanek therefore spoke of important impulses for the mobile communications sector as well as for the television and digital lifestyle sectors. Mills suspects, however, that the cooperation may be under pressure and that Freenet may want to partner with its main trading partner.

Ceconomy in turn increases the capital by 10%, excluding the subscription right of existing shareholders. Major shareholders Haniel, the Meridian Foundation, Beisheim and the Supervisory Board welcomed the new largest shareholder, said Pieter Haas, CEO of Ceconomy. The transaction is expected to be finalized in August

The Group, resulting from the spin-off of the former Metro Group, had already informed the markets in mid-June of its intention to raise capital. This put the stock price under heavy pressure.

Ceconomy intends to use the proceeds of the capital increase to strengthen its own balance sheet, among other things. Money is currently burning the problematic markets of Sweden and Russia. Ceconomy has found a solution for Russia. The activity goes to the Russian group Safmar, which also includes the competitor Ceconomy M.Video. At the same time, the company will receive a 15% stake in M.Video and will thus continue to participate in the development of the current Russian market leader. Together, it costs the group 250 million euros.

The strategy also includes acquisitions. Analysts expect Ceconomy to sooner or later take a stake in French trader Fnac Darty or buy the heirs of minority shareholder Erich Kellerhals from the company. / She / men / stw / jha /

HAMBURG / DUSSELDORF (dpa-AFX)

Image sources: CECONOMY, freenet