Dusseldorf Activist investor Petrus Advisers is urging Teamviewer management to pay more money to shareholders and end expensive sponsorship deals. In a letter to CEO Oliver Steil and CFO Michael Wilkens, the fund called for the sponsorship deals with Manchester United football club and the Mercedes Formula 1 team to be terminated.
The fact that the MDax group spends more than 70 million euros a year on sponsorship is “simply a sign of hubris and poor judgment,” said the letter, which was published on Wednesday. Despite the high sum – it corresponds to 1.4 times the net profit – “no relevant branding effects” can be determined.
According to media reports, Teamviewer will pay Manchester United 47.5 million pounds (54.5 million euros) annually as a shirt sponsor until 2026. The sponsor deal is one of the most expensive in European football, which analysts have often criticized. The software specialist is also expected to shell out millions for the five-year contract with the Mercedes Formula 1 racing team.
“Teamviewer is not SAP, Oracle or Mercedes,” wrote Petrus founder Klaus Umek and partner Till Hufnagel to CEO Oliver Steil and CFO Michael Wilkens. According to its own statements, the British fund has increased its stake in the German software manufacturer to almost three percent.
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A spokesman said the company is continually evaluating the need for investment in its brand and visibility of its products in light of the company’s strategy and economic outlook.
Management has already announced that it will not extend the partnership with Manchester United beyond the original term, the spokesman said. In addition, the company announced its desire to consider changing the existing contract.
Share buybacks as a “logical strategy”
The company offers a software platform for the secure networking of devices via the Internet. The most important application is the remote maintenance and control of PCs, the management also wants to digitize work processes in industry and customer service with the technology. It is important to win more and more large customers.
Petrus Advisers also called for higher payouts for shareholders. The stability of the business model in combination with the currently low share price makes further share buybacks “attractive”. “For us, another share buyback program, combined with a steadily increasing dividend, is a logical strategy.”
Teamviewer shares were trading at around EUR 11.10 on Wednesday morning, almost 13 percent less than at the beginning of the year and more than 50 percent less than when the company went public in autumn 2019, despite the recent upward trend.
More: After surprisingly positive numbers: Three factors that Teamviewer needs for a trend reversal