Derby Cycle cried foul last week after Accell Group, the Dutch bicycle and fitness group, increased its stake in its large-scale German rival to about 22 percent. Accell acquired 5.7 percent of Derby last April, in what it described as a financial investment, but Derby's managers angrily described Accell's latest move as a prelude to a hostile takeover attempt.
This intent was firmly denied by Accell. Its managers said that they were impressed by Derby and strongly believed in its growth strategy. They added that Accell had no intention of forming a strategic partnership with Derby, nor would it request any representation on its board.
Accell further indicated that Derby was an attractive investment because its share price recently declined, and a substantial Derby stake was available. That apparently referred to Finatem, Derby's former owner, which retained a 10 percent stake in the bike group when it filed its initial public offering in February. Another stake of about 8 percent is in the hands of Mathias Seidler, Derby's chief executive, while the rest is spread among other managers and small shareholders.
Derby's shares were launched at a price of €12.50. They subsequently rose to nearly €21 but suddenly dipped to less than €15 in the second half of August, prompting Derby to start buying up its own shares just before Accell unveiled its own move. However, Derby's share price shot back up to more than €21 this week.
In an unusual statement, Derby's management made it clear that it regarded Accell's move as a creeping takeover attempt, and bluntly added that it had “no interest of any kind in any cooperation with the Accell Group, however it might be structured, and of whatever type it might be.”
Under German stock market regulations, the Accell Group would have to issue a full offer for Derby if it owned at least 30 percent of the company. A stake of 25 percent plus one share would give it a blocking minority.
The row unfolded just as the Eurobike show was taking place in Friedrichshafen, and a few days after Derby issued strong results for the nine months until the end of June. The German company's turnover increased by 38 percent to €198.8 million for the three quarters, while earnings before interest and tax (Ebit) jumped by 45 percent to €19.1 million. The growth was largely driven by the pickup of the electric bicycles market, as Derby's sales of such products nearly doubled to 73,000 units for the period.
Furthermore, the IPO provided the company with more resources to invest in its international business. In June it took over its own distribution in Australia; the same happened in the U.K. in July and then in Denmark in August.
Derby's managers were quick to point out that they grew faster than Accell in the last quarter. The Dutch group saw its sales rise by 9 percent to €373 million in the first half of the year, but 6 percentage points of the increase were attributed to the acquisition of the former Bianchi Turkey.
