Skin damage

23 October 2003 By Hugo Dixon Follow @hugodixon

This allGerman stitchup suits Tchibo, Beiersdorf management, Allianz and other insiders. But outsiders are shortchanged. The company s decision to buy 7.4% of its own shares to help thwart a takeover by P&G is particularly reprehensible.

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Allianz has sold a 40% stake in Beiersdorf to a Hamburgbased consortium led by Tchibo for E4.4bn.

Under the deal, Tchibo will buy a 19.6% stake. Added it to its existing 30% stake, that would take it to just under 50%. Tchibo's allies will buy the rest. Allianz will keep a stake of 3.6%.

Beiersdorf will also buy back 7.4% of its own stock.

Allianz said the sale price was equivalent to E130 a share. There will be no public offer to minority shareholders.

Before Allianz made its announcement, the FT reported that Procter & Gamble might unveil its own full bid for Beiersdorf on Thursday.

News agencies had also reported that Tchibo was also talking to the Claussen family about buying some of its 10% stake in Beiersdorf. One idea would involve the Claussens taking control of Tesa, Beiersdorf's adhesives' subsidiary, instead of receiving cash for their shares, a family member told Reuters and Bloomberg. The Claussens have been closely connected to Beiersdorf for several generations.

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