Ceconomy eyes deal with heirs of Media Markt founder

Germany’s economy, Europe’s largest consumer electronics group, is in talks to settle a long-running dispute with a major shareholder of Media Saturn subsidiary, people close to the case said Monday.

Cekonomy’s shares would come from an outdoor capital increase, with the total part of the deal and cash valued at approximately 1 billion euros, sources said.

Ceconomy shares briefly reversed previous losses, rising as much as 4.9% after the Reuters story was published before returning to almost flat trading at 1040GMT.

Ceconomy, which was split by Metro retail conglomerate  in part to allow it to become more active in acquisitions, received a 24 percent stake in French rival Fnac Darty in 2017.

The management of the economy had struggled for years over the strategy with German billionaire Erich Kellerhals, co-founder of Media Markt, who for years used his remaining stake in Media Markt to block Ceconomy’s management plans.

A Cekonomy spokeswoman declined to comment beyond quoting a previous comment from Chief Executive Joern Werner, who said he was conducting very constructive talks with the Kellerhals family and was trying to leave their problems of the past.

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