A former prime minister of Qatar has agreed to purchase a 10% stake in the El Corte Inglés department chain in a transaction that opens Spain’s biggest retailer up to foreign investment.
Sheik Hamad bin Jassim bin Jaber Al Thani will become a board member and major stockholder in the Spanish corporation after agreeing to purchase €1 billion in treasury shares from the company – a move that values the group at €10 billion.
The deal was closed on Friday by El Corte Inglés’ board of directors and the Ramón Areces Foundation, the leading shareholder in the firm with a 35% stake.
Europe and Latin America appear to be in the company’s future expansion plans
Besides serving as prime minister – a position he held from 2007 to 2013 – Hamad bin Jassim bin Jaber Al Thani also served as Qatar’s foreign minister from 1992 to 2013. The sheik has major investments in Deutsche Bank and KBL Luxembourg Bank, according to El Corte Inglés.
“The investment was made through a financial instrument that will be converted into shares within three years,” the company said in a statement. “These stocks form part of the company’s treasury shares. Through this agreement, the investor, one of the biggest in the world market, will form part of the El Corte Inglés Group with a pledge to remain a permanent member and support the strategic development of the group.”
The move is expected to help the company, which is headed by Dimas Gimeno, expand to other markets. Portugal is the only country where El Cortes Inglés presently has stores outside of Spain. Some years back, it had planned to open a store in Milan, but the deal never got off the ground.
Even though company sources would not speculate where the expansion would take place, Europe and Latin America appear to be on the radar screen.
“This agreement is the result of an ongoing process that has concluded with a satisfactory alliance that benefits both parties,” said group chairman Gimeno in a statement. “The new stockholder is going to take part in our growth and expansion in an atmosphere of cooperation.”
Once this next phase is complete, the company may decide to move forward with an IPO, something that late chairman Isidoro Álvarez had previously considered in order to strengthen the group.
The firm also needs to continue paying off the debts that had been holding it back before it reached a deal with the bank to refinance €3.7 billion.
As well as the Ramón Areces Foundation, the rest of the group’s core shareholders are made up by Gimeno and Álvarez’s two daughters, Marta and Cristina Álvarez Güil, each with a 7.5% stake, and the García Miranda family with 10%. The Areces Galán family holds another portion with top executives and other employees owning the rest.
Besides selling household goods, clothing and food, El Corte Inglés Group operates other businesses, including travel agencies, concert ticket sales and insurance agencies.