16th Jan 2008 07:38
X5 Retail Group N.V.16 January 2008 X5 RETAIL GROUP N.V. STARTS DUE DILIGENCE ON KARUSEL ADVISED BY GOLDMAN SACHS Amsterdam, 16 January 2008 - X5 Retail Group N.V., Russia's largest foodretailer in terms of sales (LSE ticker: "FIVE"), announced today that it hassent an Option Notice (the Notice) to the shareholders of Formata Holding B.V.(Formata) on execution of its rights under a Call Option Agreement with respectto the purchase of 100% of the shares of Formata (the Option Shares). Formataowns the Karusel hypermarket chain. The Notice is irrevocable. Nevertheless,the acquisition of the Option Shares is conditional upon the completion by X5Retail Group to its satisfaction of due diligence on Formata and on receipt byX5 Retail Group of any required regulatory, shareholder or third partyapprovals. Following receipt of the Notice by Formata's shareholders, X5 Retail Group hasbegun carrying out due diligence on Formata's legal, tax, financial, business,real estate standing, etc. Under the Call Option Agreement, Formata mustprovide all reasonable assistance to X5 Retail Group in conducting the duediligence. Completion of the Call Option, assuming the above conditions are fulfilled, musttake place by the later of (i) 1 July 2008 or (ii) three months after theprovision to X5 Retail Group of the audited consolidated IFRS accounts forFormata for the year ended 31 December 2007. The amount payable by X5 Retail Group for the exercise of the Call Option is theaggregate of: (a) the lesser of: (i) 1.1 multiplied by consolidated net sales of Formata; or (ii) 14.5 multiplied by the greater of i. EBITDA; or ii. 5% of consolidated net sales of Formata; plus (b) the value of the land and other real estate in the course of construction(where business is not carried out as at 31 December 2007), as determined by anindependent real estate valuer; less (c) the aggregate amount of Formata's net debt, in each case calculated by reference to Formata's audited consolidated IFRSaccounts for the year ended 31 December 2007. No less than 75% of the Option Price is payable in cash, while the remainingamount can be settled by newly issued X5 Retail Group shares. The financingstructure of the deal will be announced subject to X5's satisfaction with thedue diligence results. X5 Retail Group has mandated Goldman Sachs to act as its financial advisor onthe potential acquisition of Formata. For further details please contact Anna Kareva IR Director Tel.: +7 (495) 980-2729, ext. 22 162 e-mail: [email protected] Note to Editors: X5 Retail Group N.V. is Russia's largest food retailer in terms of sales. TheCompany was created as a result of a merger between Pyaterochka (soft discounterchain) and Perekrestok (supermarket chain) on 18 May 2006. As of 30 September 2007, the Group had 573 company-managed soft discount storeslocated in Moscow (256), St. Petersburg (234) and other Russian areas (83), 163company managed supermarkets across Central Russia and Ukraine, including 101stores in Moscow (Moscow region and Yaroslavl region), and 13 company managedhypermarkets. As of 30 September 2007, X5's franchisees operated 627 stores across Russia andKazakhstan. The Group's net sales for the first nine months 2007 reached USD 3,618 million,an increase of 50% year-on-year. Gross profit for the period totaled USD 946million, EBITDA amounted to USD 311 million. Forward looking statements: This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identifiedby the fact that they do not only relate to historical or current events.Forward-looking statements often use words such as" anticipate", "target", "expect", "estimate", "intend", "expected", "plan", "goal" believe", or otherwords of similar meaning. By their nature, forward-looking statements involve risk and uncertainty becausethey relate to future events and circumstances, a number of which are beyond X5Retail Group N.V.'s control. As a result, actual future results may differmaterially from the plans, goals and expectations set out in theseforward-looking statements. Any forward-looking statements made by or on behalf of X5 Retail Group N.V.speak only as at the date of this announcement. Save as required by anyapplicable laws or regulations, X5 Retail Group N.V. undertakes no obligationpublicly to release the results of any revisions to any forward-lookingstatements in this document that may occur due to any change in its expectationsor to reflect events or circumstances after the date of this document. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
X5 Retail