Unexpected departure of chief executive Jan de Kreij sees shares in
Rodamco Continental Europe plunge and analysts question strategy
Shares in Rodamco Continental Europe have dropped by 15% in the wake of Jan de Kreij’s shock departure as chief executive.
Shares are now trading at around €34.15, down from the €39.15 on 14 March when it was announced that de Kreij was stepping down “as a result of differing views” with the board. In the interim, he will be replaced by Robert van Oordt, a member of the supervisory board of RoProperty.
Rodamco CE are not elaborating on the reasons for de Kreij’s departure but it is understood to be partly concerning the relationship between the company and its asset manager RoProperty, the company owned by the four Rodamco global divisions and Robeco.
RoProperty undertakes the asset management but with de Kreij keen to keep the in-house management when it acquired the Piren portfolio, the company will be losing out on management fees. The same management problem was expected to arise for its acquisition of Amvest.
Analysts reacted strongly to the news. ABN Amro immediately downgraded the company from buy to overvalued, adding: “In our view RCE can at this moment ill afford to lose the man who was leading RCE’s push to become one of Europe’s leading retail real estate operators.”
Merrill Lynch later followed suit, downgrading its rating to neutral. “The Amvest acquisition, if for paper, will significantly reduce gearing and increase the firepower for further acquisitions.
“This would not be a problem if shareholders had confidence in the acquisition strategy going forward, but the departure of Mr de Kreij, and his replacement by a temporary CEO, must throw doubt on this,” said the analysts’ note.
Willem Ledeboer, executive director of Rodamco CE, confirmed that the deal with Amvest was proceeding as planned.
Jeppe de Boer, analyst at ABN Amro, said the dropping share price could affect the deal. “Sellers of Amvest receive Rodamco shares so the deal is becoming less attractive.”
Rodamco CE also confirmed that it had been successful in acquiring Piren, the Swedish shopping centre company. Rodamco CE has 98.5% of the votes and shares in the company and will compulsory purchase the remainder.
