Daimler has confirmed in a new regulatory filing that Abu Dhabi’s sovereign wealth fund Aabar Investments sold its remaining 3.07% stake in the German OEM on 5 October. The stake of 32.75 million shares was valued at around €1.25bn (US$1.61bn).
However, Aabar continues to have theoretical access to voting rights equivalent to 12.75% of Daimler’s equity through financial instruments, including cash-settled call options.
Daimler shares have recently traded at €38.15 each, nearly twice the €20.27 price that Abu Dhabi paid for the shares in a capital increase that excluded existing shareholders in March 2009. That deal positioned Aabar as the largest investor in Daimler after the sovereign wealth fund bought a roughly 9.1% holding (96.4 million shares) for €1.95bn, much of which was then loaned out to finance the purchase.
Although widely anticipated, Aabar’s move could once again renew pressure on Daimler’s Chief Executive Officer, Dieter Zetsche, to consider a restructuring of Daimler’s businesses in order to focus more resources on Mercedes-Benz Cars and therefore to enhance shareholder value. A spin-off of Daimler Trucks has long been mooted as the likely focus of such a restructuring. The absence of a major family shareholding – as those at Volkswagen and BMW – is also likely to mean the resurfacing of rumours that Daimler could become an acquisition target, although Daimler’s Chief Financial Officer Bodo Uebber stated emphatically in April 2012 that the company was not a takeover candidate.
Reuters quotes a Daimler spokesperson as saying: “Aabar realigned its investment in Daimler and we of course respect that. We continue to be very pleased with our current shareholder structure.” The spokesperson also noted the recent increase in the Kuwait Investment Authority’s stake to 7.6% of Daimler’s equity, from a previous 6.9%.
The Financial Times (FT) also quotes a spokesperson as saying: “We already had voting rights notification regarding Aabar at the beginning of February. They gave an update to us regarding heir voting rights, and we made the regulatory filing today.”
In late December 2011, German media sources, citing unnamed company contacts, speculated that Daimler was seeking a Chinese investor that could take a 5-10% stake in the company. The report suggested Uebber had hired an investment bank to arrange a potential deal. China Investment Corp, the country’s sovereign wealth fund, was considered the front runner for any investment. The move was speculated to be aimed at improving relations with China’s government, and at stabilising the company’s shareholding structure, preventing the potential for a hostile takeover.
Following the disposal of the Aabar stake, as of 11 October 2012, Daimler had just one major individual investor – Kuwait Investment Authority (Kuwait) with 7.6%. Renault and Nissan held minor stakes of 1.54% each, with the majority of the equity still in the ownership of institutional investors (68.8%) and private investors (20.5%). Although Chinese investors are not identified separately, just 3.9% of the equity was listed as being held by investors outside Europe (including Germany), the US and Kuwait.
Daimler is scheduled to report Q3 financial results on 25 October.
