Support Highlights Need for Urgent Action to Address Liquidity Issues and Undervaluation
Western Gate has expressed its support for the recently announced financing agreement and reverse stock split by Grupo DIA, viewing these measures as essential components of a broader strategy to address the company’s undervaluation and restore critical market liquidity.
In recent years, Western Gate has consistently urged Grupo DIA’s Board to implement substantial changes to highlight the company’s operational progress, enhance its market standing, and generate positive momentum. Despite some progress, Western Gate remains concerned about DIA’s limited engagement with the market, which has negatively impacted its valuation.
Yesterday’s announcement is seen as a constructive initial step. Western Gate looks forward to the upcoming Investor Day in March 2025, where it anticipates further clarity on the company’s plans to drive transformative change, including ensuring better representation for minority shareholders.
A United Call for Action
Western Gate is part of a Coalition of over 50 Grupo DIA shareholders, united in their concerns over the company’s undervaluation and lack of transparency. The Coalition is campaigning for:
Enhanced corporate governance: Advocacy for a more independent Board with relevant industry experience to represent all shareholders, including minorities.
Improved investor relations: A clear strategy to enhance share price performance and market perception.
Accountability of leadership: Linking executive compensation to share price performance to align leadership incentives with shareholder interests.
Positive Momentum for Transformation
The Coalition emphasizes that the Board must capitalise on DIA’s current operational improvements by building an effective investor relations strategy, which will ultimately bolster the company’s financial position and market value.
Luis Amaral, representing Western Gate, commented:
“We welcome yesterday’s announcement as a significant first step but stress that it is only the beginning of the changes needed at Grupo DIA. This milestone highlights the importance of unlocking value, addressing the company’s severe undervaluation, and driving the transformational efforts necessary to secure its future success.”
