March 3, 2020 / 5:10 PM / in a month

Sysco contacted Germany's Metro over potential takeover: sources

DUESSELDORF/FRANKFURT (Reuters) - U.S. food distributor Sysco (SYY.N) has contacted Metro (B4B.DE) about a potential takeover of the German wholesaler, two people close to the matter told Reuters on Tuesday.

FILE PHOTO: A Sysco sign is shown outside one of their distribution centers in Poway, California, U.S. February 6, 2017. REUTERS/Mike Blake

Once a sprawling retail conglomerate, Metro has restructured in recent years to focus on its European cash-and-carry business, selling off the Kaufhof department stores and then splitting from consumer electronics group Ceconomy (CECG.DE).

Last month Metro agreed to sell its struggling Real hypermarkets business to a consortium of property investors to focus on supplying hotels, restaurants and independent traders.

Sysco, a distributor of food and other products to restaurants, nursery homes and colleges, held talks with Metro late last year, the sources said, with one of them adding that talks had continued this year.

The source said that Metro’s transformation into a wholesale group has put it on Sysco’s radar as a potential foothold in Europe.

The U.S. company’s interest was further stoked by last year’s failed 5.8 billion euro ($6.4 billion) takeover bid by Czech businessman Daniel Kretinsky and Slovak partner Patrik Tkac, the source added.

The current state of negotiations was not immediately clear.

The Meridian Foundation and the Beisheim Group, the two Metro shareholders that rejected Kretinsky and Tkac’s bid, raised their stake in Metro to about 23% in January and signaled they could buy more shares.

Metro and Sysco declined to comment, as did Metro shareholder EP Global Commerce, the investment vehicle of investors Kretinsky and Tkac. Metro’s website says EP Global Commerce holds close to a 30% stake.

Shares in Metro were up 19% at 12.42 euros by the close, recouping losses over the past two weeks. EP Global Commerce had offered 16 euros per share under its aborted takeover attempt.

Sysco shares were down 1.8% at 1822 GMT.

The Sysco approach for Metro was first reported by Bloomberg News.

Writing by Ludwig Burger; Editing by David Goodman

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