Ahold CEO John Rishton has dismissed analyst concerns that the Dutch grocer could become a takeover target, saying it intends to remain independent. In media comments, he said, “We haven’t spent all this time, trouble and effort to strengthen our business and recover and get ourselves into a very strong position, to become a takeover target”.
Analysts had said that Ahold was running the risk of becoming too attractive for rivals, due to its low share valuation and its high cash reserves. The group’s stock price has risen by just 4.3% this year, giving it a current market capitalization of E10.8bn. That compares poorly with rivals such as Delhaize (share price up 17% this year) and Tesco (shares up 18%).
Ahold also today announced plans to cut costs by another E350m over the next three years, having already saved E500m since 2007, but he remarked, “Having too much cash isn’t a problem, frankly”. Rishton said the group will use the money to open new stores, buy outlets from rivals and make takeovers. He also said he has “no problem” in returning cash to shareholders, noting, “We returned E4.0bn to our investors in 2007 and 2008. So, that’s clear evidence that if we think it’s the right thing to do, we’ll do it.”
Namnews - Thursday 19th November 2009
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