UPDATE 2-Sweden's Kinnevik to distribute $6.6 billion Zalando stake to shareholders

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STOCKHOLM, Feb 17 (Reuters) – Kinnevik plans to distribute its stake worth 55 billion crowns ($6.63 billion) in German online fashion group Zalando to shareholders, the Swedish investment firm said on Wednesday.

Kinnevik, which has investments ranging from online food retailers to digital healthcare and payment services, said the distribution would be made to its shareholders through an automatic share redemption programme.

Kinnevik’s stake of 54 million shares represents 21% of total shares outstanding in Zalando.

Shares in the German online fashion giant fell 6.2% in Wednesday’s early trade, while Kinnevik dropped 3.0%.

Kinnevik’s shares have surged more than 200% from lows in March, with many of its holdings seeing rapid growth in the midst of the pandemic, helped by the portfolio’s focus on digital businesses.

The proposal to distribute Zalando will be submitted at Kinnevik’s annual shareholder meeting on April 29, and is expected to be finalised during the second quarter.

“The investment in Zalando has been instrumental in establishing Kinnevik as the leading listed European growth investor in tech-enabled businesses,” Kinnevik Chief Executive Georgi Ganev said in a statement.

The Swedish firm said shareholders representing an aggregate 30% of shares and 50% of votes had expressed support for the distribution and confirmed their intention to back the proposal at the shareholder meeting.

Zalando Co-Chief Executive Rubin Ritter said: “Especially in the early days of Zalando, Kinnevik’s decisive support and willingness to invest and take big risks to follow a long-term conviction has made a significant difference.”

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