PRESS RELEASE
RELATING TO THE FILING OF
THE DRAFT RESPONSE
OFFER DOCUMENT PREPARED BY
Christian Dior
IN RESPONSE
TO
THE SIMPLIFIED MIXED OFFER
together with secondary
CASH SIMPLIFIED OFFER and
EXCHANGE SIMPLIFIED OFFER
within the overall limit of 66.11% in cash and 33.89% in Hermès
International shares (2016 ex-dividend)
INITIATED
BY
Semyrhamis
(a company of the Arnault Family Group)
This
press release was prepared by Christian Dior and disseminated in
accordance with Article 231-26 of the general regulations of the
French financial market authority (Autorité des
marchés financiers) (the "AMF").
This document is an unofficial English-language
translation of the press release on the filing of the draft offer
document.
This draft offer and the draft response offer
document remain subject to review by the AMF.
The draft response offer document
is available on the websites of Christian Dior
(www.dior-finance.com) and of the AMF (www.amf-france.org) and may
be obtained free of charge upon request to:
Christian Dior |
30 avenue Montaigne
75008 Paris
France |
In accordance with the provisions
of article 231-28 of the general regulations of the AMF,
information relating in particular to the legal, financial and
accounting aspects of Christian Dior, will be made available to the
public in the same manner as mentioned above, no later than the day
preceding the opening of the Offer.
1
PRESENTATION OF THE OFFER
Pursuant to Section III of
Book II and more specifically articles 233-1 et seq. of the general regulation of the AMF,
Semyrhamis, a société anonyme having its
registered office at 30 avenue Montaigne, 75008 Paris, registered
with the Register of Commerce and Companies of Paris under number
434 009 114 ("Semyrhamis" or the "Initiator") irrevocably offers to the shareholders of
Christian Dior, a société européenne, having
its registered office at 30 avenue Montaigne, 75008 Paris,
registered with the Register of Commerce and Companies of Paris
under number 582 110 987 ("Christian
Dior" or the "Company"), other than the
members of the Arnault Family Group (as defined hereafter), to
acquire and/or exchange all of their Christian Dior shares (the
"Offer").
The draft offer document relating
to the Offer has been filed with the AMF by the Initiator on May
22nd, 2017 (the
"Draft Offer Document").
1.1. Shares
targeted by the Offer
The shares of the Company (the
"Shares") are traded on the Euronext Paris
market (Compartment A) ("Euronext Paris")
under ISIN Code FR0000130403 (mnemonic CDI).
As of the date of the draft
response offer document, the total number of existing Shares is
equal to 180,507,516, representing 307,374,031 theoretical voting
rights pursuant to Article 223-11 of the general regulation of the
AMF.
At the date of the draft response
offer document, Semyrhamis holds with the other members of the
Arnault Family Group 133,714,971 Shares, representing 74.08% of the
share capital and 84.68% of the theoretical voting rights of the
Company. In addition, Semyrhamis has not entered into any
agreement, at the date hereof, which would enable it, on its own
initiative to acquire any Shares.
The Offer is made for all existing
Shares not already held by the Initiator and the other members of
the Arnault Family Group, excluding treasury Shares to the
exception of 370,795 treasury Shares that may be delivered as a
result of a definitive allocation of free Shares or performance
Shares or the exercise of Stock-Options (the "Stock-Options") in favour of beneficiaries other than
the members of the Arnault Family Group (please refer to Section
2.5 of the Draft Offer Document for a description of the situation
of holders of Stock Options, free shares and performance shares).
As of the date of the draft response offer document the number of
Shares targeted by the Offer is equal to 46,308,068 Shares,
representing 25.65% of the existing share capital of the
Company.
1.2. Terms of the
Offer
The Offer primarily takes the form
of a simplified mixed offer, completed by a secondary cash
simplified offer and a secondary exchange simplified offer.
Under the primary simplified mixed
offer, the Initiator offers to the shareholders of the Company to
tender their Shares to the Offer and to receive in exchange 172
euros and 0.192 Hermès International share (2016 ex-dividend) for
each Share, in accordance with the ratio described hereafter and
within the limit of 8,891,150 Hermès shares (the "Primary Offer").
Shares of Hermès
International[1] ("Hermès") are traded on Euronext Paris (Compartment A)
under ISIN Code FR0000052292 (mnemonic RMS) (the "Hermès Shares").
In order to meet the expectations
of the shareholders of Christian Dior who would like to benefit
from a different proportion of Hermès Shares and/or cash, without,
however, modifying the global proportion of 66.11% in cash and
33.89%[2] in Hermès
Shares, the Primary Offer is completed by a secondary simplified
cash offer and a secondary simplified exchange offer (the
"Secondary Offers"), under the following
terms:
-
Secondary simplified cash offer (the "Secondary Cash Offer"): within the limit of 66.11% in
cash as set forth in section 2.3.3 of the Draft Offer Document, the
Initiator offers to the shareholders of the Company to acquire
their Shares, at a price of 260 euros for each Share.
-
Secondary simplified exchange offer (the
"Secondary Exchange Offer"): within the limit
of 33.89% in Hermès Shares as set forth in section 2.3.3 of the
Draft Offer Document, the Initiator offers to the shareholders of
the Company to exchange their Shares for Hermès Shares according to
an exchange ratio of 0.566 Hermès Share (2016 ex-dividend)for each
tendered Share.
Shareholders of Christian Dior may
tender their Shares either (i) to the Primary Offer, (ii) to
one/both of the Secondarily Offers, or (iii) to the Primary Offer
and to one/both of the Secondarily Offers.
The Secondary Offers are, as the
case may be, subject to a reduction mechanism in order to
obtain:
-
a total amount of cash equals to the amount that
would have been obtained if all the Christian Dior's shareholders
tendering their Shares to the Offer, had tendered them to the
Primary Offer, and
-
a total amount of Hermès Shares equal to the
amount that would have been obtained if all the Christian Dior's
shareholders tendering their Shares to the Offer, had tendered them
to the Primary Offer.
Such reduction mechanism is
further described in Section 2.3.3. of the Draft Offer
Document.
The Hermès Shares delivered
pursuant to the Offer will be delivered "2016
ex-dividend"[3]. In
addition, no adjustment will be made by the Initiator in case of
distribution by Hermès after the date of the draft response offer
document.
1.3. Details on the
Offer
The Offer shall be open for a
period of fifteen (15) trading days.
The Offer is made according to the
simplified procedure pursuant to Article 233-1 et
seq. of the general regulation of the AMF.
The indicative timetable of the
Offer is set forth in section 2.10 of the Draft Offer Document.
The Initiator will not implement a
squeeze-out process pursuant to Article 237-14 et seq. of the
general regulation of the AMF within 3 months following the
completion of the Offer, regardless of the results of the
Offer.
More generally, the Initiator
intends to maintain the admission of the Shares for trading on
Euronext Paris following the completion of the Offer and, depending
on the results of the Offer, reserves the right to purchase
Shares.
Pursuant to article 231-13 of the
general regulation of the AMF, the draft offer and the draft offer
document have been filed with the AMF on May 22nd, 2017 by
Rothschild & Cie Banque, Crédit Agricole Corporate and
Investment Bank ("CA-CIB"), Natixis and Société Générale acting as
presenting banks.
It is specified that the content
and irrevocable nature of the undertakings made by the Initiator in
connection with the Offer are solely guaranteed by CA-CIB, Natixis
and Société Générale.
The Offer, the Draft Offer
Document and the draft response offer document are subject to
review by the AMF.
2
CONTEXT AND REASONS OF THE OFFER
2.1
Context of the Offer 2.1.1
Composition of the Arnault Family Group
The Arnault family group, composed
of the Arnault family and the following companies it controls,
namely (i) Groupe Arnault, (ii) Financière Agache, (iii) le Peigné
and (iv) the Initiator (the "Arnault Family
Group"), directly and indirectly holds 74.08% of the share
capital and 84.68% of the theoretical voting rights of the
Company.
Semyrhamis holds directly 62.38%
of the share capital and 71.92% of the theoretical voting rights of
the Company.
The Arnault Family Group also
holds, directly and indirectly, 8 955 471 Hermès Shares
in portfolio representing 8.48% of the Hermès share capital,
8 771 914 Hermès shares being held by Semyrhamis and
183 557 Hermès shares being held, directly and indirectly, by
other members of the Arnault Family Group.
2.1.2 A two-folds strategic project
On April 25th, 2017,
the Arnault Family Group, Christian Dior and LVMH Moët Hennessy -
Louis Vuitton ("LVMH") announced a two-fold
strategic project, through a press release available on the website
of each of Christian Dior (www.dior-finance.com), LVMH
(www.lvmh.fr) and Semyrhamis (www.semyrhamis-finance.com):
-
The strengthening of Fashion & Leather Goods
division of LVMH through the acquisition of Grandville, holding
100% of the share capital and voting rights of Christian Dior
Couture as well as other real estate assets operated by Christian
Dior Couture (the "Disposal");
-
The simplification of the structures of the
Christian Dior - LVMH group through the Offer.
Following the announcement, the
AMF has published on April 25th 2017 a
preoffer notice (n°217C0860) relating to the Company.
The Offer will (i) allow the
Initiator to increase its shareholding in Christian Dior
emphasizing the confidence of the Arnault Family Group in the
long-term perspective of LVMH and its brands and (ii) represent a
liquidity opportunity for the shareholders of Christian Dior, in a
context of the Shares currently trading at all-time highs.
-
Agreement
relating to the Sale entered into between Christian Dior and
LVMH
LVMH and Christian Dior, which
holds directly and indirectly 40.94% of the share capital and
56.34% of the theoretical voting rights of LVMH, have entered into
a non-binding Memorandum of Understanding on April 24th, 2017
regarding the contemplated disposal of the Christian Dior Couture
segment by Christian Dior to LVMH for an enterprise value of 6.5
billion euros[4],
representing 15.6x adjusted last twelve months EBITDA[5] as of end
of March 2017.
Christian Dior
Couture
Christian Dior Couture is one of
the most prestigious luxury brands in the world.
Its revenue doubled over the past
five years. Furthermore, its profitability has improved over the
same period, with an increase in profit from recurring operations
of 24% per year.
Christian Dior Couture continued
its growth momentum with last twelve months revenue (as of March
31st, 2017) in excess of 2 billion euros, an EBITDA5
of 418 million euros and profit from recurring operations of 270
million euros[6].
A strategic
transaction for LVMH
The contemplated Disposal will
allow for the regrouping of Christian Dior Couture and Parfums
Christian Dior brands, the latter being already part of LVMH
Group.
The Disposal is expected to be
accretive to LVMH earnings per share from the first year
(+2.7% on a 2016 pro forma basis).
Following the acquisition, LVMH's
gearing will increase from 12% as of December 31st, 2016
to 35% on a pro forma basis.
Support of the
Boards of Directors of Christian Dior and LVMH
The Boards of Directors of
Christian Dior and LVMH held on April 24th, 2017, were
unanimously favorable to the signature of a Memorandum of
Understanding, based notably on work of their respective financial
advisors.
Signature of a
final agreement
The Disposal was subject to the
completion of a confirmatory due diligence. On May 18th, 2017, the
works council of Christian Dior Couture has issued a favourable
opinion on this project.
The signature of a final agreement
(the "Disposal Agreement") has been approved
as related-party transaction by the Boards of Directors of
Christian Dior and LVMH held on May 22nd, 2017. In
addition, a review of the financial terms of the transaction for
both LVMH and Christian Dior will be led by two independent experts
appointed by the Board of Directors of each party, it being
specified that the independent expert appointed by the Company is
also acting as independent expert with respect to the Offer.
Following meetings of the Board of
Directors of Christian Dior and LVMH held on May 22nd, 2017,
Christian Dior and LVMH announced, by a joint press release, the
signature of the Disposal Agreement providing for (i) the transfer
of entire share capital and voting rights of Grandville to LVMH,
(ii) a price for Grandville shares of 6 billion euros, (iii) a
vendor loan for a two years period, with the option of early
redemption without penalty and an annual interest rate of 1% and
(iv) the completion of the Disposal is subject to the clearance
decision of the Offer by the AMF becoming effective, it being
specified that in any case the completion of the Disposal shall not
occur before July 3rd, 2017.
-
Draft
Offer
The Initiator, a company of the
Arnault Family Group, which holds directly and indirectly 74.08% of
the share capital and 84.68% of the theoretical voting rights of
Christian Dior, informed the Board of Directors of Christian Dior
of its intention to file the draft Offer. The Board of Directors of
Christian Dior which took place on April 24th, 2017
(i) unanimously welcomed the principle and the terms of the
contemplated transaction, (ii) decided to set up an ad hoc
committee (the "Committee"), composed of
three independent directors, in charge of monitoring the conduct of
the independent expert's mission and (iii) appointed, based on the
proposal by the ad hoc committee, Finexsi, represented by Olivier
Peronnet and Olivier Courau, as independent expert, in accordance
with article 261-1 I, 1° and 4° of the general regulation of the
AMF.
The Board of Directors of the
Initiator has approved the filing of the draft Offer on May 22nd,
2017.
Based on the report of the
independent expert and on the opinion of the ad hoc committee, the
Board of Directors of Christian Dior held on May 22nd, 2017, has
examined the draft Offer and unanimously, Mr. Bernard Arnault and
Mrs. Delphine Arnault having not taken part in the vote,
recommended that shareholders of Christian Dior tender their Shares
to the Offer. The reasoned opinion of the Board of Directors of
Christian Dior on the Offer is contained within section 3 of this
document.
2.2 Reasons
of the Offer
As indicated in section 2.1.2, the
Offer is part of a two-fold strategic project aiming at (i) the
strengthening of Fashion & Leather Goods division of LVMH
through the Disposal and (ii) the simplification of the structures
of the Christian Dior - LVMH group. On the date of announcement,
the terms of the Offer represented a premium of 14.7%[7] over the
close share price of Christian Dior, 18.6% over the 1-month
volume-weighted average price[8], 25.9% over
the 3-month volume-weighted average price8 and 32.8%
over the 6-month volume-weighted average price8, in
line with its net asset value of the Company. As a consequence, the
Offer represents a liquidity opportunity for the shareholders of
Christian Dior, in a context of the Shares currently trading at
all-time highs.
3
REASONED OPINION OF THE BOARD OF DIRECTORS
The Committee has presented
conclusions of its work to the board of directors of the Company
and took them into consideration in its reasoned opinion.
The extract of the minutes
including the reasoned opinion is reproduced below:
« On
May 22th, 2017, the Board of Directors met at headquarters, under
the chairmanship of Mr. Bernard Arnault, in order to deliver a
reasoned opinion on the merits of the Offer and its consequences
for the Company, its shareholders and its employees, in accordance
with Article 231-19 of the General Regulation of the AMF.
All directors
were present or represented at the meeting, namely:
-
Mr. Bernard Arnault, Chairman
of the Board of Directors,
-
Mr. Sidney Toledano, Chief
Executive Officer and Vice-Chairman,
-
Mrs. Delphine
Arnault,
-
Mrs.
Helène Desmarais,
-
Mr. Renaud Donnedieu de
Vabres,
-
Mrs. Ségolène
Gallienne,
-
Mr. Christian de
Labriffe,
-
Mrs. Maria Luisa Loro
Piana.
Mr. Jaime de
Marichalar y Sáenz de Tejad, censor, also attended the meeting of
the Board.
In accordance
with best governance practices, Mr. Bernard Arnault and Mrs.
Delphine Arnault abstained from voting on the reasoned
opinion.
In particular,
the Board of Directors took into consideration the following
documents:
-
the draft offer document of the
Initiator to be filed with the French financial market authority
(Autorité des Marchés Financiers "AMF"), including in particular
the context of and the reasons for the Offer, the intentions of the
Initiator, the characteristics of the Offer, and the assessment
criteria of the price of the Offer;
-
the draft response offer
document of the Company, including in particular the reminder of
the principal terms and conditions of the Offer and the information
concerning the Company, to be filed with the AMF;
-
the report of the independent
expert reproduced in the draft response offer document of the
Company, drafted by Finexsi in accordance with the provisions of
Article 261-1 of the General Regulation of the AMF;
The Board of
Directors first noted that:
-
the Arnault Family Group holds
directly and indirectly - in particular through the Initiator -
74.08% of the share capital and 84.68% of the theoretical voting
rights of the Company;
-
the Offer, which is conducted
in a friendly context and will be open for a period of 15 trading
days, is a voluntary offer for all shares of the Company not
currently held by the Arnault Family Group, excluding the treasury
shares with the exception of certain shares likely to be
transferred in the event of a definitive allocation of free shares
or performance shares or in the event of the exercise of stock
options;
-
in respect of the Offer, the
Initiator principally offers shareholders of the Company to tender
their Shares to the Offer and to receive, in consideration for a
tendered Share, EUR 172 and 0.912 Hermès International share (2016
stripped coupon). This Primary Offer (the "Primary
Offer") is secondarily accompanied by a simplified public offer
and a simplified public exchange offer allowing shareholders (each
within the limits of the draft offer document of the
Initiator):
-
to opt for a payment
exclusively in cash and to receive EUR 260 for 1 share of the
Company tendered to the Offer (the "Secondary Cash
Offer");
-
to opt for a payment
exclusively in Hermès International shares and to receive 0.566
Hermès International share for 1 share of the Company tendered to
the Offer (the "Secondary Exchange
Offer");
-
the Offer is conducted as part
of the strategic project announced by the Company and LVMH on April
25th, 2017, which
includes, in addition to the Offer, the strengthening of the
Fashion and Leather goods division of the LVMH group with the
acquisition of Christian Dior Couture from Christian Dior for an
enterprise value of €6.5 billion;
-
the Offer allows minority
shareholders to benefit from immediate liquidity at a price which
is within the higher assessment range resulting from the valuation
criteria. Therefore, the Primary Offer allows a premium of 14.7%
over the closing share price as of April 24th, 2017
of €226.9 (highest
recorded), of 18.6% over the 1-month average share price, of 25.9%
over the 3-month average share price and of 32.8% over the 6-month
average share price (these average prices being weighted by
volume);
-
the Primary Offer and the
Secondary Exchange Offer also offer the possibility, for those
shareholders who wish to do so, to exchange their shares for Hermès
shares.
The Board of Directors then noted the principal
intentions of the Initiator for the next twelve months as
follows:
-
the Initiator does not intend
to modify the Company's strategy, provided that following the sale,
the Company will have as its principal asset a direct and indirect
participation of 40.94% of the share capital and 56.34% of the
voting rights of LVMH;
-
the Initiator intends to
continue the Company's policy with respect to social relationships
and human resources management, provided that the Company does not
have employees;
-
the Initiator does not
anticipate any recomposition of the Board of
Directors;
-
upon completion of the Offer,
the Initiator reserves the right to suggest to the Company that its
dividend distribution be adapted in accordance with the evolution
of the results, provided that as soon as the Sale price is fully
paid by LVMH to the Company, the Initiator intends to propose to
the Company to distribute all or part of the amounts received by
the Company;
-
upon completion of the Offer,
the Initiator will not implement a squeeze-out procedure
("procédure de retrait obligatoire") within the meaning of Articles
237-14 and following of the General Regulation of the AMF, within
three (3) months following the close of the Offer, regardless of
the Offer's results. More generally, the Initiator intends to
maintain the admission to trading the Shares on Euronext Paris upon
completion of the Offer, and depending on the results of the Offer,
reserves the right to purchase Shares.
After review and
consideration of these elements, the Chairman of the Board asks
Olivier Peronnet, representing Finexsi, invited to the meeting of
the Board, to present his report showing that:
-
the Offer, established on a
voluntary basis, is being conducted as part of the reorganization
and the simplification of the capital ownership and control of the
Arnault Family Group over the share capital of LVMH, and of the
integration of Christian Dior Couture in the brand portfolio of the
LVMH group;
-
the Offer allows access to
liquidity for the shareholders of Christian Dior at a price, on the
eve of the announcement (April 24, 2017), of €260.2 (Primary Offer) and
€260.0 (Secondary Offers) per
Christian Dior share, subject to the following
comments:
-
the price is within the range
of the revalued net asset determined on the basis of:
-
an evaluation of LVMH in line
with the highest stock market price prior to the announcement, and
beyond its DCF evaluation on the basis of the analysts' consensus;
and
-
the €6 billion sale price of
Christian Dior Couture;
-
it reflects a 15% premium on
its share price of April 24, 2017 of € 226.9,
its highest recorded level;
-
it reflects a premium on the
other secondary criteria of the targeted share prices of the
analysts and of the dividend's update;
-
furthermore, the partial
payment terms of the main branch in Hermes shares (0.192 Hermes
shares plus €172) implies
a limited exposure to the possible decrease of the share price of
such company, of which its free float will be increased up to a
maximum of 8% of its share capital. For the shareholder who chooses
the secondary offer exclusively in Hermes shares (0.566 Hermes
share for one Christian Dior share), his exposure to the current
Hermes share price would be increased, but he would benefit from a
favorable parity with the Christian Dior share compared to the
historical parity of their stock market prices;
-
the transfer of Christian Dior
Couture by Christian Dior to LVMH concurrent with the Offer
constitutes a related transaction which has been subjected by
Finexsi to an Independent Expert's conclusive report as to the
fairness of the €6 billion price agreed between the parties to the
transaction. To the best knowledge of Finexsi, there are no other
agreements or transactions related to the Offer likely to call into
question the fair treatment of the shareholders in the financial
sense;
-
ultimately, the valuation works
conducted and the aforementioned considerations lead Finexsi to
conclude that the terms of the Offer for the Christian Dior SE
shares are fair for its shareholders.
Once the
presentation is over, the Chairman of the Board invites Mr.
Christian de Labriffe to present, on behalf of the Committee, the
report of the Committee, which was made available to the directors,
together with the main conclusions relating to the conditions
of the Offer, pursuant to which:
-
the chosen approach to evaluate
the countervalue offered is relevant.
On the eve of the announcement (on April 24th, 2017,
it stands at €260.2 for the Primary Offer, at €260.0 for the
Secondary Exchange Offer and at €260.0 for the Secondary Cash
Offer;
-
the revalued net asset appeared
as the most relevant method to value the Company within the
framework of the Offer, the Committee noting that, with regard, the
offered price is within the revalued net asset range at the date of
the Offer announcement (April 25th, 2017) and
furthermore achieves a very high bonus level compared to the
various stock market averages across various periods of reference
(between 15% to 33% depending on the case);
-
the terms and conditions of the
Offer are fair for the shareholders and the Committee thus
recommends that the Board of Directors issues a favorable opinion
on the Offer.
With regard to
the elements above, the Board of Directors, upon deliberation,
decided, unanimously, that the Offer is in the interest of the
Company, its employees and its shareholders and recommends that the
shareholders of the Company bring their shares to the Offer.
»
4
INTENTIONS OF MEMBERS OF THE BOARD OF DIRECTORS
The extract of the minutes
including the intentions of members of the board of directors of
the Company is reproduced below:
"The Chairman of
the Board of Directors indicates to the Board that the Company must
prepare a response offer document which notably specifies the
intentions of the members of the Board of Directors to tender or
not their shares to the Offer.
The Chairman
reminds that as mambers of the Arnault Family Group, neither he nor
Mrs. Delphine Arnault will tender their shares to the
Offer.
He also specifies
that:
-
members of the board of
directors will not tender to the Offer their 200 shares which they
are required to hold during the entire duration of their mandate in
accordance with the bylaws of the Company;
-
Semyrhamis has indicated that
it reserves the right to put in place a liquidity mechanism in
favor of beneficiaries of stock-options and/or free shares or
performance shares which would not tender their shares to the Offer
due to the specific applicable legal regime. This liquidity
mechanism would take the form of a bilateral contract providing for
(i) a call granted by Semyrhamis to the relevant beneficiaries and
(ii) a put granted by the relevant beneficiaries to Semyrhamis. The
exercise price would be in line with the Offer price indexed by
reference to the evolution of the LVMH share price as from the
closing of the Offer.
Each of Mrs.
Hélène Desmarais, Mrs. Ségolène Gallienne, Mr. Renaud Donnedieu de
Vabres and Mr. Christian de Labriffe declares not holding shares
other than directors shares.
Mr. Toledano has
indicated to the board of directors of the Company that all of its
shares are subject to retention programs applicable to the
management and to a specific legal provisions justifying that he
will not tender its Shares to the Offer and acknowledges the
intention of Semyrhamis in relation to the implementation of a
liquidity mechanism.
The Board of
Directors takes note of the intentions of each of the members of
the Baord".
5
INTENTIONS OF THE COMPANY REGARDING THE TREASURY SHARES
The Company has decided not to
tender to the Offer the 855,272 Shares that it holds.
6
CONCLUSION OF THE REPORT OF THE INDEPENDENT EXPERT
Pursuant to articles 261-1 I, 1°
and 4° of the general regulation of the AMF, Finexsi, represented
by Olivier Perronet and Olivier Courau, was appointed as
independent expert by the board of directors of the Company held on
April 24th, 2017, in
order to deliver a report on the financial conditions of the Offer.
The report is reproduced in the draft response offer document.
The conclusion of this report are
as follows:
"This Offer,
which is being made on a voluntary basis, forms part of the
reorganisation and simplification of the Arnault Family Group's
ownership and control of LVMH, and the integration of CHRISTIAN
DIOR COUTURE into the LVMH group's brand portfolio.
The Offer gives
CHRISTIAN DIOR SE shareholders access to full liquidity at a price
of €260 (Secondary Cash Offer) or partial liquidity at a counter
value of €260.2 (Primary Offer). This price and this counter value
call for the following comments:
-
they lie within the Net Asset
Value range based on
-
a valuation of LVMH that is
above its highest market price before the announcement and above
its DCF valuation on the basis of analyst consensus forecasts and
-
the €6 billion selling price
for the CHRISTIAN DIOR COUTURE division;
-
they reflect a 15% premium to
the all-time high share price of CHRISTIAN DIOR SE of €226.9
reached on 24/04/2017;
-
they reflect a premium to
figures obtained using other secondary methods based on analyst
target prices and discounted dividends.
In addition, the
terms of the Primary Offer, which involves payment taking place
partly in HERMES shares (0.192 HERMES shares plus €172), imply
limited exposure to any decrease in HERMES' share price, and
HERMES' free float will increase to 8% of its share capital. For
shareholders selecting the Secondary Exchange Offer consisting of
HERMES shares alone (0.566 HERMES shares per CHRISTIAN DIOR SE
share), their exposure to HERMES' current share price would be
greater, but they would benefit from a CHRISTIAN DIOR SE/HERMES
exchange ratio that is favourable compared with the historic ratio
between the two companies' share prices.
CHRISTIAN DIOR'S
sale of its CHRISTIAN DIOR COUTURE division to LVMH, taking place
concomitantly with the Offer, is a related transaction on which we
have prepared an independent appraiser's report, which concludes
that the €6 billion price agreed by the parties to the transaction
is fair. To our knowledge, there are no other agreements or
transactions related to the Offer that may call into question the
fair treatment of the shareholders from a financial point of
view.
The valuation
work we have done and the aforementioned considerations lead us to
conclude that the terms of the Offer for CHRISTIAN DIOR SE shares
are fair for its shareholders".
In addition, Finexsi was also
appointed as independent expert by the board of directors of the
Company held on April 24th, 2017, in
order to deliver a report on the financial conditions of the
Disposal. The report is reproduced in the draft response offer
document.
7
8
CONTACTS
Analysts and investors
contacts
|
Chris
Hollis
LVMH |
+ 33
1.4413.2122 |
Christian Dior SE individual
investors' contacts
|
Free-toll
number
Toll number
D.F. King |
+33 800
916 566
+33 1.8122.4462 |
Media contacts
|
|
Jean-Charles Tréhan
LVMH
|
+33
1.4413.2620 |
France
: |
Michel
Calzaroni / Olivier Labesse /
Thomas Roborel de Climens / Hugues Schmitt
DGM Conseil
|
+ 33
1.4070.1189 |
Royaume-Uni : |
Hugh
Morrison / Charlotte McMullen
Montfort Communications
|
+44
7921.881.800 |
Italie
: |
Michele
Calcaterra / Matteo Steinbach
SEC and Partners
|
+39 02
6249991 |
Disclaimer
This
press release was prepared for informational purpose only. It is
not an offer to the public and it is not for diffusion in any other
country than France. The diffusion of this press release, the Offer
and its acceptance may be subject to specific regulations or
restrictions in certain countries. The Offer is not made for
persons subject to such restrictions, neither directly nor
indirectly, and may not be accepted in any way from a country where
the Offer would be subject to such restrictions. Consequently,
persons in possession of this press release shall inquire about
potential applicable local restrictions and comply with them.
Christian Dior excludes all liability in the event of any breach of
the applicable legal restrictions by any person.
[1] A
société en commandite par actions, having its
registered office at 24 rue du Faubourg Saint-Honoré, 75008 Paris,
registered with the Register of Commerce and Companies of Paris
under number 572 076 396.
[2] Percentages
are rounded figures. The exact percentages are determined by the
ratio between, on the one hand, the cash component of the Primary
Offer, i.e. 172 euros, and in the other hand, the Hermès Shares
component of the Primary Offer, i.e. 0.192, multiplied by 459.3
euros (Hermès closing share price as of April 24th, 2017, adjusted
by 2.25 euros, representing the balance of the 3.75 euros dividend
for the financial year 2016, which will be proposed at the Annual
General Meeting of Hermès on June 6th, 2017)
[3] Subject to
the approval by the Annual General Meeting of Hermès on June
6th, 2017 of the
3.75 euros dividend for the financial year 2016, the balance of
such dividend amounting to 2.25 euros is expected to be paid as of
June 8th, 2017.
[4] Including
the value of other real estate assets operated by Christian Dior
Couture and indirectly held by Grandville.
[5] Adjusted
EBITDA, pro forma of Christian Dior expenses borne by the purchaser
post-Disposal, and before income/(loss) from joint ventures and
associates.
[6]
Adjusted for expenses of Christian Dior borne by the
purchaser post-Disposal and after income / (loss) from joint
ventures and associates .
[7] Based
on Hermès closing share price as of April 24th, 2017, adjusted by
2.25 euros, representing the balance of the 3.75 euros dividend for
the financial year 2016, which will be proposed at the Annual
General Meeting of Hermès on June 6th, 2017, i.e.,
459.30 euros.
[8]
Volume-weighted average share prices of Christian Dior as of
April 24th 2017, adjusted for dividend distribution for share
prices prior to April 19th, 2017
Format pdf
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Christian Dior via Globenewswire
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