(Bloomberg) -- Mexican retailer Grupo Elektra, owned by billionaire Ricardo Salinas Pliego, kicked off a process to take the company private amid a tug of war with regulators over a prolonged trading halt in the stock.
The company has called a shareholder meeting for Dec. 27 to vote to delist shares, according to a statement Wednesday. “The market does not maximize the value of the entity,” Elektra said in the filing, noting that over 95% of shareholders have expressed interest in the company going private.
Trading in shares of Elektra has been halted since July and have in recent weeks days been caught in an awkward — and unsuccessful — attempt to resume trading. While regulators ordered the restart, the country’s stock exchange has repeatedly suspended bids as they were more that 50% below where the stock last traded, triggering circuit-breakers.
On Tuesday, Elektra had urged Mexico’s Banking and Securities Commission (CNBV) and the stock exchange to follow a court ruling ordering a halt on trading until a legal pending case is resolved.
Salinas controls nearly 80% of Elektra’s outstanding shares, according to data compiled by Bloomberg.
Shareholders will also discuss naming a new board to “reorganize the company in a strategic way,” according to the statement.
Elektra stock has been facing significant selling pressure from index-tracking funds, such as BlackRock Inc and The Vanguard Group, after it was cut from the country’s main stock gauge in August due to the trading halt.
“The decision to go private appears to benefit all parties,” said Damian Fraser, head of Miranda Partners, a financial communication consultancy in Mexico City. “Elektra can prioritize its internal strategies, while investors, including pension funds, can redirect capital toward more stable and conventional companies.”
--With assistance from Cyntia Barrera Diaz and Jose Orozco.
(Updates with chart and analyst comment.)
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