02.04.2017
AURELIUS Equity Opportunities SE & Co. KGaA DE000A0JK2A8
DGAP-News: Detailed statement by AURELIUS Equity Opportunities SE & Co. KGaA in response to Gotham's assertions
DGAP-News: AURELIUS Equity Opportunities SE & Co. KGaA / Key word(s):
Statement
Detailed statement by AURELIUS Equity Opportunities SE & Co. KGaA in
response to Gotham's assertions
02.04.2017 / 20:41
The issuer is solely responsible for the content of this announcement.
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Detailed statement by AURELIUS Equity Opportunities SE & Co. KGaA in
response to Gotham's assertions
Grünwald, 2 April 2017
A. Preamble
In a paper published today, we will show in detail that the assertions made
by Gotham Research LLC ("Gotham") in its report ("Gotham Report") published
last week are substantially incorrect.
At the time the Gotham Report was published, Gotham held a significant short
position in AURELIUS Equity Opportunity SE & Co. KGaA ("AURELIUS"). Gotham
therefore had a vested interest in damaging the reputation of AURELIUS in
order to depress its share price and make significant speculative gains to
the detriment of all shareholders. Indeed, Gotham has since closed much of
its short position and taken profits.
AURELIUS' financial statements are accurate. The company's governance
structure and principles are sound. AURELIUS is a very healthy, stable and
growing company, and has been since its foundation more than ten years ago.
AURELIUS has a very solid balance sheet: as of December 31, 2016, AURELIUS
has a strong capital base of 416.4m EUR in cash, equity of 486.5m EUR
(equity ratio of 27%) and total assets of 1.8bn EUR. With a total of more
than 21,000 employees, AURELIUS generated consolidated total revenues of
2.9bn EUR in financial year 2016. Furthermore, over the last five years
AURELIUS has paid out 256.0m EUR via dividends and share buy-backs to its
shareholders.
In its analysis, Gotham makes many fundamental intellectual mistakes: it
compares apples with oranges, it confuses timelines, and it uses incomplete
research to reach conclusions which are invariably inaccurate.
BaFin has initiated an investigation to assess whether market manipulation
has occurred in connection with Gotham's actions. AURELIUS fully supports
BaFin's investigation and is currently evaluating all avenues to pursue
legal action, including action under criminal law.
B. Executive Summary
Gotham's report lists a number of assertions, all of which AURELIUS will
disprove in this paper. We summarize our specific response to assertions on
page 4 of Gotham's document here:
1) 100% of reported earnings and subsidiaries' earnings can easily be
reconciled by taking into consideration the differences between IFRS and
local GAAP reporting. Gotham fails to do so.
2) AURELIUS' accounts show all contingent liabilities. Gotham's calculation
of contingent liabilities double-counts and misqualifies.
3) Negative goodwill, or bargain purchase, is an inherent, and legal, part
of AURELIUS business model. IFRS 3 regulates how bargain purchase income has
to be accounted for. AURELIUS meets all relevant reporting requirements in
this regard.
4) AURELIUS has acquired 77 businesses since 2006, only four of which
(5.19%) went into insolvency while being part of AURELIUS-Group. This is a
very small number considering AURELIUS' strategy of acquiring distressed
assets. Gotham's calculation is far-fetched.
5) AURELIUS' NAV is fully justifiable and plausible. A simple calculation
shows that the company's implied NAV/EBITDA multiple is 8.9x, in line with
the range for non-listed small and mid-sized companies in Europe of 7-10x.
Gotham's NAV derivation makes no sense.
6) There is a good reason why AURELIUS has not received an unqualified audit
opinion: its non-disclosure of individual asset acquisition prices. Such
disclosure would leave the company at a disadvantage to its competitors.
Gotham's charge reveals a lack of understanding of our industry.
7) AURELIUS does have an independent CFO: Steffen Schiefer has been in
office as a member of the extended management board since 2012.
8) Collectively, the AURELIUS Board members continue to own a significant
share in the company. Its interests are fully aligned with those of
shareholders.
9) AURELIUS is not involved in more civil litigation than any other company
of comparable size. It is not involved in any criminal litigation.
Further unfounded assertions made by Gotham in its report are also disproved
in this response.
C. Corrective Statement
For the full statement please click here:
http://aureliusinvest.de/statement_aurelius_gotham.pdf
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02.04.2017 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Financial/Corporate News and Press Releases.
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Language: English
Company: AURELIUS Equity Opportunities SE & Co. KGaA
Ludwig-Ganghofer-Straße 6
82031 Grünwald
Germany
Phone: +49 (0)89 544 799-0
Fax: +49 (0)89 544 799-55
E-mail: [email protected]
Internet: www.aureliusinvest.de
ISIN: DE000A0JK2A8
WKN: A0JK2A
Listed: Regulated Unofficial Market in Berlin, Munich, Stuttgart,
Tradegate Exchange; Open Market in Frankfurt
End of News DGAP News Service
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