Last Chance Saloon for Steinhoff shareholders – Liebscher says vote now against management or lose €1.5bn

Steinhoff shareholders are staring down the barrel after the company’s management is approaching the Dutch courts to force through a decision voted down at the annual general meeting.

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17 May 2023, 6:18 pm

Steinhoff shareholders are staring down the barrel after the company's management is approaching the Dutch courts to force through a decision voted down at the annual general meeting. But all is not yet lost, says German Shareholder Association lawyer Dr Marc Liebscher, whose organisation is fighting for Steinhoff's small shareholders. He is urging them to once again vote against the management proposal – and says this will ensure they capture the R30bn (€1.5bn) that they own in the business, in his opinion the true net asset value of the company. The WHOA vote closes on May 24, and should the majority of shareholders go against the management's proposal, Liebscher says his organisation will give its Wall Street-commissioned research to help the Dutch judge rule in shareholders' favour. Liebscher also spoke to Alec Hogg of BizNews about former CEO Markus Jooste's no-show in the German Court a month ago. Steinhoff shareholders can vote against the restructuring below:

WHOA RESTRUCTURING PLAN VOTE

Watch here:

Relevant timestamps from the interview:

01:12 – Dr Marc Liebscher on the response from Steinhoff shareholders following his previous BizNews interview
01:55 – Dr Liebscher on the Steinhoff restructuring plan that shareholders are opposing
02:54 – On how shareholders can vote
04:46 – On the role of the court in the fight against Steinhoff
06:24 – On Markus Jooste's court case
07:33 – On Jooste's accomplices
08:43 – On if the shareholders association wants Jooste to be extradited to Germany
10:07 – On if the Steinhoff heist is being prosecuted dutifully
12:28 – On Steinhoff's interesting business dealings ahead of the shareholders' vote
15:21 – On if Steinhoff's valuation of the company aligns with the shareholders' valuation
17:09 – On keeping the shareholders association's valuation away from querying hedge funds
18:22 – On taking the right steps to get their valuation
19:53 – On the difference in value between Steinhoff's and the shareholders association's valuations
22:56 – On what will happen if the shareholders association is successful in court
24:20 – On the shareholders' call to change Steinhoff management
25:57 – On his confidence in the vote being successful

Listen here:

Excerpts from the interview

Dr Liebscher on what the Steinhoff shareholders are voting against

They presented a restructuring plan to the creditors and shareholders. And this restructuring plan has the idea that the shareholders will not get any value out of the shares of Steinhoff and in the AGM of the shareholders we voted against this restructuring plan and what the company now is trying to do. They are trying to push through this plan, these so-called war proceedings, out of court and out of insolvency proceedings where the company [would] propose the restructuring plan and creditors and shareholders [could] vote in different groups if they accept this plan. [So if] this plan would go through [then] we would see this [being] very negative for the shareholders.

Read more: Meet Dr Marc Liebscher, the German White Knight riding to rescue of Steinhoff's retail shareholders

On the shareholders association's view on the investigation into Markus Jooste

It lies in the hands of the prosecutors, for sure. If we were asked, for instance, by you, by the press or by media, what's our position? Our position is [that] Jooste must have his day in court, in penal court. And if that is in South Africa or in Germany, that is not so much of importance. [The] importance is [that] he has his day in court. It's [the] prosecutors and the authorities [that] are really going to [get to] the bottom of the scandal. If that is done in South Africa, in Germany, we don't care. But the bottom has to be searched and that is not done. So we are very much willing and advocating for the authorities to investigate and prosecute.

Read more: Former Steinhoff directors face trial over $7.2 billion accounting scandal

On Steinhoff's "fishy" business ahead of the shareholders' vote

We're in these war proceedings and these is a very court-regulated proceeding. So Steinhoff put forward a plan and now the shareholders have to vote on the plan. But what's happened is that the facts of the plan, the underlying facts changed dramatically in the last week when Steinhoff announced it was it is about to sell its shares in Mattress Firm. Now Mattress Firm is one of the major assets of Steinhoff. It's worth between 4 to $5 billion and Steinhoff holds a 50% stake in Mattress Firm. [As of] eight days ago they will sell it to Tempur Sealy International and they will acquire Steinhoff shares for a price of around $4 billion. And this is really odd because normally you wouldn't [do this] when you are in such short-running court proceedings [during] the voting period [which] ends on the 24th [of May 2023]. You wouldn't announce on the 9th that you were about to sell your major stake in a major company because it changes the complete ground and fact that the shareholders and the creditors are supposed to vote on. So this is weird. It is not convincing. And it sheds another doubt and it smells fishy in this whole Steinhoff process.

Read more: Steinhoff's downfall: Ignoring strategic principles and the perils of asset intensity – Ted Black

On differing valuations between Steinhoff and the shareholders association

First, we have to be frank that the valuation we have can only touch on publicly available information. Steinhoff is not answering any questions [from] us. For instance, they have management projections of the different companies [that] they own [that] will develop in the coming years. We were not provided with these management projections [even though] we [have] ask several times for these management projections. So we lack very substantial information and on that ground we had to do the valuation. So this is a caveat. We have to be clear. And our valuation is coming from a growing concern. We are of the opinion that Steinhoff [should] not sell their shares in Pepco and Mattress Firm in chunks of 5 [or] 10%. We are of the opinion [that] they should sell these shares in one huge chunk, in one huge group and then the buyer acquires not a majority but a large packet of shares. And this [would] change the share price.

So our delegation comes to a rate… that the valuation of Steinhoff is about up to 15% higher than its actual debt. So the debt right now would be $10 billion. So our valuation comes to the conclusion that the valuation of Steinhoff could be up to $11.5 billion. But as I said, we lack substantial information that we are not being provided by Steinhoff and [we have] been asking for that information for four or five months. They are not willing to present this information.

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