Electra faces Scholz & Friends minority shareholder revolt

Scholz & Friends, the Electra-backed advertising and marketing communications agency, is facing legal action over the squeeze out of its minority shareholders. SdK, the German small shareholders’ association, issued a statement in which it hoped to prevent the squeeze-out of the minority shareholders and stock market delisting. It views the shareholder price of €2.20 per share as insufficient.

There is little likelihood the minority shareholders will succeed as Electra is within its legal right to squeeze out the minority shareholders. Anthony Tulloch of law firm SJ Berwin says: “They won’t be able stop the squeeze-out from happening, all they will be able to do is maybe get a higher price for their shares.”

Electra last year bought 77.3% of the issued share capital of Scholz & Friends from majority shareholder Cordiant Communications Group for approximately €1.35 per share plus a maximum earn-out of €0.09 per share.

The offer of €2.20 per share made to the minority shareholders for the remaining shares in Scholz & Friends is at a price, which reflects both the average weighted share price over a specified time period and the price paid to the majority shareholder. The transaction valued the business at an enterprise value of around €50m.