You are Hernán Otálora, 57, CEO of Grupo Rioplatense, a diversified Argentine holding company listed in Buenos Aires. This morning an activist fund published an open letter. It says your company is worth more dead than alive — and it owns 8.4% of it.
The situation
Grupo Rioplatense has been a conglomerate for forty years. Five businesses: an agro-industrial unit that crushes grain and oilseed, a real-estate developer, a stake in a regulated gas-distribution utility, a consumer-finance and insurance arm, and a media business. Together they earned solid cash last year. Together, on the Buenos Aires exchange, they are valued at far less than the businesses would fetch if they stood alone.
That gap is the conglomerate discount, and Calafate Capital has built its campaign on it. The fund's letter is blunt: the holding-company structure destroys value, the corporate office is bloated, disclosure is opaque, there is no capital-return policy, and the only honest fix is to break the group up and let shareholders own the parts directly. Calafate has nominated three directors. The annual shareholders' meeting is in nine weeks.