Guenter and Daniela Herz, the German billionaire siblings who amassed a fortune with coffee and sneakers, are back investing at home as they weigh a bid for one of the country’s most popular makers of pots and pans.
The pair are competing with bidders that include buyout firms KKR & Co. (KKR), CVC Capital Partners Ltd. and Bain Capital LLC for WMF Wuerttembergische Metallwarenfabrik AG (WMF), according to people familiar with the plan. WMF, whose lineup includes wholesale coffee machines, cutlery and kitchen utensils, is being sold by Swiss private-equity firm Capvis Equity Partners AG, which owns 52 percent.
“WMF is a strong brand and they make an enormous margin with professional coffee machines for hotels and businesses,” said Klaus Kraenzle, an analyst at Silvia Quandt & Cie, who doesn’t rate the company. “WMF would fit the Herz family well should a brand philosophy be part of their strategy.”
A purchase by the Herz siblings, whose combined fortune of $4.8 billion originated with German coffee and retailing chain Tchibo GmbH, would return the pair to owning a well-known brand name in Germany after they sold their stake in sporting shoemaker Puma SE for a profit of more than half a billion euros in 2007. Attempts to buy a stake in clothing retailer Esprit Holding Ltd. (330) were unsuccessful.
A sale of the Capvis stake in WMF will probably value the German company at more than 500 million euros ($659 billion), said people familiar with the matter, who declined to be identified because talks are private.
Buying WMF would be the siblings’ most visible return to the domestic investment scene after their Puma exit. Their only purchase since has been a 40 percent stake in restaurant chain Vapiano SE last year.
Guenter and Daniela Herz were bought out of Tchibo in 2003 by the rest of their family for about 4 billion euros. The pair bought Germanischer Lloyd AG, a certifier of ships based in Hamburg, in 2006. Their holdings are run out of Hamburg by the Mayfair Vermoegensverwaltungs AG.
The five Herz siblings inherited the fortune of Tchibo founder Max Herz before breaking up over different views on the strategy for the family firm. Guenter, the oldest brother, who led the company after his father’s death in 1965, joined his sister Daniela.
The remaining siblings, Michael and Wolfgang and Joachim, who died in 2008 in a motorboat accident, built the other axis of the clan with the patriarch’s wife, Ingeburg, and their holdings include a majority of Beiersdorf AG (BEI), the maker of Nivea skin cream, as well as Tchibo.
Guenter and Daniela Herz parted ways with Tchibo in 2003, and the two invested in Puma in 2005. They reaped proceeds of more than half a billion euros two years later selling their stake to French retailer PPR (PP) SA.
The remaining pair, Wolfgang and Michael, have also put some of their money into coveted German brands, buying a stake in luxury fashion house Escada AG. The foray failed after Escada filed for bankruptcy in 2009, and the company is now owned by Megha Mittal, the daughter-in-law of steel magnate Lakshmi.
WMF, based in Geislingen, said last month that Capvis may seek an exit via a sale of its stake on the stock exchange or to a third party. Fiba Beteiligungs & Anlage GmbH holds 37 percent, and 11 percent is freely traded. Capvis gained a holding in WMF in 2006, buying shares held by Deutsche Bank AG, Munich Re and insurer Wuerttembergische Lebensversicherung AG. (WLV)
The household goods company was founded in 1853, and WMF had revenue of about 980 million euros last year and earned 44 million euros. When Capvis bought its stake, WMF had sales of about 732 million euros. WMF employs about 6,000 people, who make products including 299-euro all-steel kitchen knives and Premium One cooking pots for 184 euros.
Zurich-based Capvis has hired Commerzbank AG, Macquarie Group Ltd. (MQG) and Lilja & Co. to manage the sale. Bids are due in early May. Joerg Hass, a spokesman for WMF, declined to comment on bidders, as did a spokesman for Mayfair.
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