(Bloomberg) — After years of fighting to defend the share price of his flagship holding and a months-long trading halt, Mexican billionaire Ricardo Salinas Pliego is taking Grupo Elektra private.
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Shareholders in the appliance retailer and bank voted to delist the shares at a meeting on Friday, according to a filing. Salinas, Mexico’s fourth richest person, owns almost 80% of the shares, according to data complied by Bloomberg.
The move aims “to reorganize and strengthen the company’s extensive and diverse assets – digital and physical, national and international — and find financial tools to maximize its real value,” Elektra said in a statement.
A new board was also approved, with long-time Salinas ally Pedro Padilla set to take over as chairman and Salinas taking the post of honorary chairman. Shares traded as much as 7% higher at 360 pesos after the announcement.
Elektra shares had slumped in early December when trading resumed following a four-month halt triggered by a legal dispute with a creditor. The pause led it to be dropped from Mexico’s main stock gauge, which meant index-tracking funds had to sell the shares. It was the final stage of a 12-year battle to keep the stock on the index.
Since it resumed trading, the stock has fallen below its book value — the company’s equity value on its balance sheet divided by the number of shares — of 419 pesos apiece. By Mexican securities rules, Salinas will have to offer at least that amount, or the average of the past 30 days of trading, whichever is higher, in an eventual tender offer.
It is unclear how much a tender would cost Salinas. The company has already bought back some 6.2 million shares this month, or around 3% of its stock, according to filings with the exchange. Those purchases cost Elektra nearly 2.2 billion pesos ($108 million), according to the filings.
Motorbikes and Banks
Elektra stores are known as the dealer of the Salinas-owned Italika motorcycles, the top seller in Mexico favored by the country’s gig workers. It’s also the pick-up spot for nearly half of the over $60 billion in remittances sent back to Mexico every year through its deal with Western Union.
The company was founded in 1950 as a radio supplier and Salinas expanded its chain stores into a one of the country’s top appliance and mobile phone retailers as he also grew Mexico’s No. 9 bank, Banco Azteca, in the back of the store, helping finance customer purchases.
