March 4, 2019 / 11:49 AM / 2 months ago

Russian fund accuses takeover target DIA of misleading investors

FILE PHOTO: People walk outside a DIA supermarket in central Madrid February 23, 2015. REUTERS/Juan Medina

MADRID (Reuters) - Russian tycoon Mikhail Fridman’s investment fund on Monday accused Spanish supermarket chain DIA of misleading investors over its recapitalization plan, the latest broadside in a tussle over the future of the struggling retailer.

Fridman’s LetterOne (L1) has launched a bid for the just over 70 percent of the Spanish company it does not already own, and is proposing a capital increase to rival one put forward by DIA’s board.

L1 said that a statement DIA made on Sunday saying the fund’s plan did not provide effective solutions to the firm’s woes was “misleading and aims to cast doubt on the viability of L1 Retail’s recapitalization plan”.

DIA declined to comment.

L1 said in a statement that it had asked DIA, which has steadily lost market share against fierce competition in Spain, for more information about its proposed 600 million euro ($680.5 million) share issue, arguing that DIA had left shareholders in the dark about how it planned to carry it out.

L1 said shareholders lacked the necessary information to decide whether to back the plan.

It also said that DIA had failed to provide adequate information about accounting irregularities related to a past asset writedown, which emerged when the company unveiled an annual loss in February.

DIA’s shareholders are due to meet on March 19 and 20 to vote on the competing rescue plans.

Reporting by Isla Binnie and Andres Gonzalez; editing by Andrei Khalip and Emelia Sithole-Matarise

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