Action owner hopes to strengthen its grip

Investment company 3i, which owns Action, does not want to give up its interest in the non-food discounter. On the contrary, 3i even wants to expand its interest, but without paying for it itself.

Staying or going?

Unusually for a large investment company, 3i’s love for Action is long-lasting: the investor, who holds 80 % of the shares in the Dutch chain, announced in his annual report that it wants to remain a shareholder for years to come. The company even wants to expand its interest in Action, Dutch newspaper Financieele Dagblad writes.

Previously it looked like an exit was on the cards: Eurofund V, a fund with private investors under the supervision of 3i, currently holds 35 % of the shares that 3i holds in Action. However, that fund expires in November and some of the private investors now want to redeem their shares. Consequently, 3i would either have a smaller stake in Action or it would have to intervene itself. Because investment companies often resell companies in their portfolio after five years, analysts thought this was the appropriate opportunity to sell Action.

Buy back own shares

On the contrary: 3i wants Action to buy back the shares of investors who opt out. If the discounter reduces the number of shares in circulation by buying them in, the interest of owner 3i naturally increases – without the investment group having to invest its own resources in it. Another option that is still on the table is to look for other investors who are taking over shares from investors leaving Eurofund V.

In view of the long-term plans of 3i with Action, the company also suddenly cancelled a sale as a condition for bonuses. Until last year management’s bonus depended on how much the sale of Action would yield, but that clause was omitted in 2018. Last year the chain was able to pay a total of 3.9 million euros to 300 employees. An additional 12 million euros has been reserved for future bonuses.