
The Coalition is a collective of concerned minority shareholders in Distribuidora Internacional De Alimentación, S.A. (DIA), led by Western Gate, voicing serious concerns about the company’s inadequate engagement with stakeholders and the resulting negative impact on its market performance.
Since LetterOne, DIA’s majority shareholder, increased its stake to 74.8% in 2019, the company’s market valuation has been in steep decline, with the stock remaining significantly undervalued. Despite DIA undergoing a major transformation in recent years—focusing on core convenience store operations and selling off non-strategic assets—there has been little effort to communicate these improvements to potential investors, analysts, or the broader market.
The Coalition of minority shareholders is perplexed as to why DIA, and its Board, chaired by a representative of LetterOne, has not proactively promoted the company’s turnaround. Repeated calls for greater engagement, most recently at the General Meeting on June 28, 2024, have been ignored, contributing to the continued undervaluation. Operationally, DIA is performing on par with its competitors, but the market does not recognize this turnaround, as reflected in its share price. The Coalition urges DIA to act in the interests of all stakeholders and more effectively promote its recovery to the wider market.
Shareholders have formally expressed concerns about governance, transparency, and the protection of all stakeholders. The current Board lacks sufficient retail experience, with only two members having any background in the sector, and none with experience in proximity food retail in Europe, DIA’s primary business model. The Coalition is advocating for the appointment of a Board member with recent, relevant sector experience to better represent minority shareholders. Additionally, the Coalition calls for better alignment between Board and shareholder interests by tying executive compensation to share price performance.
During a meeting on June 4 with DIA’s investor relations team, which included representatives from Western Gate, the idea of LetterOne reducing its stake to improve market liquidity was discussed. The Coalition fully supports this suggestion, believing that limited liquidity, due to LetterOne’s large holding, is contributing to DIA’s low market valuation.
The Coalition consists of long-term, supportive shareholders who believe in the strength of DIA’s employees and overall organization but are seriously concerned by the company’s lack of engagement with investors. The group’s goal is to improve transparency, raise awareness of DIA’s potential, and build positive momentum for its future.
The Coalition invites other minority shareholders who share this belief in DIA’s potential to join in advocating for increased transparency and value creation for all stakeholders. More information on the Coalition and its goals can be found at: www.valuingdia.com
Luís Amaral, Western Gate:
“We are frustrated that DIA’s Board of Directors has consistently rejected Western Gate’s offers to collaborate in better promoting the company’s turnaround. As a Coalition, we call for the Board to act in the interests of all stakeholders, not just the majority shareholder. The Board needs more sector-relevant expertise and closer alignment with minority shareholder interests. Their unwillingness to address these issues has damaged the company’s market perception, and it’s time for a change.”
Notes to Editors:
About Western Gate
Western Gate Private Investments Limited is the investment arm of Luís Amaral’s Family Office, focusing on private and listed companies, particularly in the retail and consumer goods sectors.
About the Coalition
Led by Western Gate, the Coalition is a group of independent shareholders without voting commitments. The Coalition seeks to address the undervaluation of DIA, calling for greater market engagement and the appointment of an independent Board member with expertise in DIA’s business model, to better represent minority shareholders.