KNDS Sues Triton Over Refusal to Deliver 18% Renk Stake

(Bloomberg) — KNDS NV has sued Triton Partners for refusing to transfer a stake in key tank supplier Renk Group AG, escalating a legal battle between the Franco-German defense company and buyout firm.

The Franco-German defense company has taken legal action against Triton in the Frankfurt district court, demanding the investment firm deliver 18.3 million Renk shares, according to a Tuesday statement that confirmed an earlier Bloomberg News report. The move took place just hours before the Tuesday midnight deadline for the share transfer.

“We will vigorously defend our legal position and regret the upheaval and uncertainty Triton is causing to Renk, KNDS and the respective employees and shareholders,” KNDS said in the statement.

KNDS also filed an interim injunction seeking to stop Triton from selling its Renk shares to others, the court confirmed in a response to Bloomberg News on Tuesday. The court dismissed the request, saying that not all closing conditions were fulfilled. It also said the order isn’t final and an appeal can be made within two weeks.

Shares in Renk climbed 0.7% as of 11:51 a.m. in Frankfurt, giving the company a market value of about €5.5 billion ($6 billion). Representatives for Triton and Renk declined to comment.

KNDS announced on Feb. 11 that it had exercised its option to buy Renk shares from Triton, lifting its holding to 25% from 6.7%. The transaction was subject to merger control and other regulatory approvals, it said at the time. It would have seen KNDS becoming the biggest investor in Renk at a price of about €20 a share, based on the weighted average price in the three months prior to the announcement.

However, Triton has been keeping its stake, arguing that KNDS failed to obtain regulatory approval in Italy, where Renk has a small unit, Bloomberg News reported last week. KNDS doesn’t agree the Italian government pre-approval was necessary as the business doesn’t involve design or manufacturing, some of the people have said, adding Italian law allows acquirers to close a deal and file for approval afterward.

Triton’s reluctance in delivering the Renk shares come after as the tank maker’s stock price surged to an all-time high at €60.1 each on May 6. Renk shares have been boosted by European government’s plans to step up security spending and a $150 million contract it landed from the US Army in March. 

Shares of Renk have jumped almost 200% this year, and the company’s performance since its €500 million IPO in February 2024 has made it one of the best private equity-backed European listings in recent memory. Triton has taken advantage of elevated stock prices for defense firms to monetize its stake in Renk, selling down over time.

–With assistance from Laura Alviž and Karin Matussek.

(Updates with court’s confirmation in fourth paragraph.)

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