Kirsti Paakkanen sells her remaining Marimekko holding
CEO Mika Ihamuotila shocked that Paakkanen did not offer the shares to him
A significant change took place on Thursday in the ownership arrangements of the Finnish textile and clothing design company Marimekko, when Kirsti Paakkanen, the former CEO of the company, sold her remaining holding in Marimekko.
Among the buyers were at least the employment pension insurance companies Varma and Ilmarinen as well as one undisclosed foreign buyer.
A relieved Paakkanen reports that she is satisfied with the transaction.
”I am very content and even happy that I managed to sell my Marimekko shares. This is what I had initially planned”, Paakkanen says.
In the deal made on Thursday, Workidea - the investment company controlled by Kirsti Paakkanen - sold its 10% stake in Marimekko Corporation, while the Kirsti Paakkanen Fund sold another 0.7%holding. Paakkanen received a total of EUR 7.7 million for the transaction.
The selling price of the shares was EUR 9 per share, which was slightly below the market value in Helsinki prior to the transaction on Thursday.
Paakkanen continues to express criricism against Mika Ihamuotila, the main owner and present CEO of Marimekko.
”Nobody has ever betrayed my confidence as Mika Ihamuotila did. The man I trusted and about whom I spoke nicely let me down”, Paakkanen says, referring to Ihamuotila’s recent decision not to buy the remaining stake in Marimekko of Kirsti Paakkanen’s investment company Workidea.
According to Ihamuotila, it was explicitly agreed upon in the autumn of 2007 that he had the right - but not the obligation - to purchase the remaining shares at a certain strike price before the option expires.
Just before the transaction made in the autumn of 2007, the value of the Marimekko share was floating between EUR 14 and 15. Ihamuotila bought a 10% holding in Marimekko from Paakkanen at EUR 12 per share.
Today, Ihamuotila admits that he made a mistake when he could not predict the upcoming collapse of the stock market at the time of the acquisition.
The financial crisis has resulted in a squeeze on credit, and Ihamuotila could not buy the shares at the strike price by the time the option expired.
According to the information gathered by Helsingin Sanomat, the strike price was EUR 10.35 per share.
”All the time I have acted according to our agreement, and I am extremely sorry that I was unable to exercise the option. I realised only in December that I would not be able to get the financing needed to buy Paakkanen’s shares”, Ihamuotila claims.
Ihamuotila also says that he asked Paakkanen to give him more time to arrange the financing and to reduce the strike price somewhat closer to the current share value. Paakkanen would not accept such an arrangement, Ihamuotila reports.
Furthermore, Ihamuotila is astounded that Paakkanen did not give him a possibility to buy her remaining holding at the share price of EUR 9.
”It is unbelievable that he is now expressing interest in the purchase of my shares, as so far he has only been complaining about his shortage of funds and credit problems”, Paakkanen retorts.
Most disagreements between the two owners were related to the company’s marketing and the layout of stores.
Ihamuotila claims that Paakkanen also played a game of her own, as early in the current week she even hinted that she could acquire a majority holding in Marimekko.
”I just wanted to scare him a little”, Pakkanen claims.
Nevertheless, Ihamuotila wishes to thank Paakkanen for all the determined work she had done for Marimekko.
”I believe that Kirsti will one day come to our Herttoniemi HQ to meet me and all Marimekko employees as a friend”, says Ihamuotila with some emotion.
Previously in HS International Edition:
Paakkanen “shocked” at state of Marimekko (5.1.2009)
Creases in the Marimekko frock (23.12.2008)
Kirsti Paakkanen to surrender ownership of Marimekko (31.10.2007)