A takeover deal between Stagecoach (SCG) and German asset manager DWS could be under pressure, after DWS’ offices were raided by the police over accusations of greenwashing.
On 9 March, Stagecoach reached an agreement with DWS on a cash bid that valued the transport company at £595mn. The offer represented a premium of around 37 per cent to the closing Stagecoach share price on 8 March, and caused shares to shoot up.
However, DWS has now announced that its chief executive, Asoka Wöhrmann, will resign immediately after the company’s annual general meeting on 9 June. This follows reports that 50 German police officers raided the offices of DWS and its majority owner Deutsche Bank as part of a probe into allegations of greenwashing.
Wöhrmann said: “The allegations made against DWS and myself in past months have become a burden for the company, as well as for my family and me. In order to protect the institution and those closest to me, I would like to clear the way for a fresh start."
DWS had specifically claimed in its annual report that a significant proportion of its $900bn in assets under management was invested according to environmental, social and governance (ESG) standards. It has since walked back this claim, dropping its ESG-aligned investments from around $500bn to $150bn.
A fund managed by DWS Infrastructure outbid National Express (NEX) for the purchase of Stagecoach earlier this year. It is unclear, however, whether the police probe will impact the agreement. One analyst said that Stagecoach and its shareholders seem to be very willing sellers, and that a public transport company might improve DWS' green credentials.
As of 20 May, DWS had secured two thirds of Stagecoach’s issued share capital towards its acceptance conditions. The deal requires the support of shareholders with 75 per cent of the company’s stock.
