TIDMDPEU
RNS Number : 3514Q
DP Eurasia N.V
27 October 2021
For Immediate Release 27 October 2021
Shareholder Update
DP Eurasia N.V.
(DP Eurasia or the Company, and together with its subsidiaries,
the Group)
Further to the announcement on 25 October 2021, the committee of
the board of the Company (the "Independent Committee"), comprising
all the independent directors, being the Chairman of the Board of
DP Eurasia, Peter Williams, and the Senior Independent
Non-Executive Director, David Adams, provides a further update by
way of a recommendation to shareholders following the Independent
Committee's completion of its evaluation of the fairness of the
terms of the reverse bookbuild by Jubilant Foodworks Netherlands
B.V. ("Jubilant") (the "RBB").
Potential impact of the RBB on the Company
As previously notified to the Company's shareholders in its
Annual Report for the years ended 31 December 2019 and 2020,
neither the UK takeover regime (the "Takeover Code") nor the Dutch
takeover regime apply to the Company. Consequently, there is no
legal or other requirement for the directors of the Company (or, in
this case, the Independent Committee) to provide its opinion on
whether the financial terms of the RBB are fair and reasonable (in
the way that would be required under Rule 3 of The Takeover Code if
the Company were subject to the UK takeover regime). However, the
Independent Committee believes it is important to provide
shareholders with such an opinion given Jubilant's ownership could
potentially increase to 49.99% following the RBB, in combination
with the absence of future appropriate protections for the balance
of shareholders including the risk of delisting .
The Independent Committee acknowledges that the RBB does not
constitute a full offer for the Company and that given the RBB is
at a premium of 23.4% to the share price of the Company on 29
September 2021 (being the last practical day prior to the
announcement) and at a premium of 4.4% to the price at the close of
business on 26 October 2021, some shareholders may see the RBB as
an attractive opportunity for a liquidity event.
However, in the opinion of the Independent Committee, by virtue
of the influence Jubilant would be able to exert through the
increase in its significant shareholding in combination with its
board representation, and the intention of Jubilant to treat the
Company as a consolidated subsidiary, that the RBB should be
appraised as a change of control transaction.
Whilst the Takeover Code does not apply to the Company and
therefore the RBB, the Independent Committee wishes to draw
attention to General Principle 1 of the Takeover Code which states
"All holders of the securities of an offeree company of the same
class must be afforded equivalent treatment; moreover, if a person
acquires control of a company, the other holders of securities must
be protected." The Independent Committee wishes to reiterate that
Jubilant has failed to treat all shareholders equally since
non-institutional shareholders in the Company have not been
afforded the opportunity to participate in the RBB.
Moreover, following the Independent Committee highlighting its
consideration of the key risks of the RBB in the announcement of 25
October 2021, and despite the efforts of the Independent Committee
and its advisers to engage with Jubilant, neither Jubilant nor its
parent has sought to discuss further any undertakings or
protections for minority shareholders. The Independent Committee
concludes, as a result, that there is potential for a heightened
risk of a worsening impact on the future liquidity of shares for
remaining shareholders were Jubilant to increase its stake to
49.99%.
Current trading and outlook
On 7 September 2021, the Company published its guidance for the
outlook for 2021, which it re-iterates, and is reproduced as
follows:
"Whilst the Board is conscious of the potential continued risks
posed by the pandemic, the strong like-for-like performance
achieved in Turkey in the first half of the year and the
expectation of continued buoyant trading enables raised guidance
for full year like-for-like growth rates in Turkey. In late March
2021, guidance was set at 21-25%, which is now being raised to
35-40%.
Given the stronger revenue performance than anticipated earlier
in the year, the Board is pleased to report that adjusted EBITDA is
now likely to be slightly ahead of the market's current
expectations."
Recommendation
The Independent Committee, which has been advised by Liberum
Capital Limited ("Liberum") as to the financial terms of the RBB,
believes that the RBB materially undervalues the Company given its
future prospects and does not consider the financial terms of the
RBB to be fair and reasonable. In providing its financial advice to
the Independent Committee, Liberum has taken into account the
commercial assessment of the Independent Committee.
In particular, the Independent Committee believes the potential
impact of Jubilant owning a 49.99% stake, with the risks
identified, for those shareholders to whom the RBB has not been
made available and to those tendering shareholders participating in
the RBB whose allocations are disproportionately scaled back on a
discretionary basis, may, future prospects for the Company
notwithstanding, impact the value of the shares if any of the
identified risks cannot be satisfactorily mitigated.
Given both the financial terms of the RBB and the impact of the
potential risks highlighted above for all shareholders, the
Independent Committee recommends that shareholders do not tender
their shares in accordance with the terms of the RBB.
Regardless of the outcome of the RBB, the Company (through the
Independent Committee) will continue to seek both to engage
constructively with Jubilant and to act in the interests of all
shareholders, which will include efforts to mitigate the future
risk of a de-listing and attempting to introduce some elements of
shareholder protection, recognising any necessary changes to the
Articles will require shareholder approval and any changes to the
Relationship Agreement which binds the actions of Jubilant will
need to be bilaterally negotiated.
Enquiries
DP Eurasia N.V.
Selim Kender, Chief Strategy Officer &
Head of Investor Relations +90 212 280 9636
Buchanan (Financial Communications)
Richard Oldworth / Victoria Hayns / Tilly +44 20 7466 5000
Abraham / Verity Parker dp@buchanan.uk.com
Liberum (Financial Adviser and Corporate
Broker)
M&A: Tim Medak/Mark Harrison
Corporate Broking: Andrew Godber/Edward
Thomas +44 20 3100 2000
Notes to Editors
DP Eurasia N.V. is the exclusive master franchisee of the
Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia. The
Company was admitted to the premium listing segment of the Official
List of the Financial Conduct Authority and to trading on the main
market for listed securities of the London Stock Exchange plc on 3
July 2017. The Company (together with its subsidiaries, the
"Group") is the largest pizza delivery company in Turkey and the
third largest in Russia. The Group offers pizza delivery and
takeaway/ eat-in facilities at its 789 stores (584 in Turkey, 192
in Russia, nine in Azerbaijan and four in Georgia as at 30 June
2021), and operates through its owned corporate stores (28%) and
franchised stores (72%). The Group maintains a strategic balance
between corporate and franchised stores, establishing networks of
corporate stores in its most densely populated areas to provide a
development platform upon which to promote best practice and
maximise profitability. The Group has adapted the Domino's Pizza
globally proven business model to its local markets.
Important Notices
Liberum Capital Limited ("Liberum"), which is authorised and
regulated in the United Kingdom by the FCA, is acting as financial
adviser exclusively for the Company and no one else in connection
with the matters set out in this announcement and will not regard
any other person as its client in relation to the matters set out
in this announcement and will not be responsible to anyone other
than the Company for providing the protections afforded to clients
of Liberum, nor for providing advice in relation to the contents of
this announcement or any other matter referred to herein. Neither
Liberum nor any of its subsidiaries, branches or affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Liberum in
connection with this announcement, any statement contained herein
or otherwise. Neither Liberum nor any of its affiliates nor any of
their respective directors, officers, employees, advisers or agents
accepts any responsibility or liability whatsoever for, or makes
any representation or warranty, express or implied, as to, the
truth, accuracy or completeness of the information in this
announcement (or whether any information has been omitted from the
announcement) or any other information relating to the Company.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities, or the solicitation of any
vote or approval in any jurisdiction, pursuant to this announcement
or otherwise. The distribution of this announcement in
jurisdictions other than the United Kingdom and the availability of
any offer to shareholders of the Company who are not resident in
the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore, any persons who are subject to the laws
of any jurisdiction other than the United Kingdom or shareholders
of the Company who are not resident in the United Kingdom will need
to inform themselves about, and observe any applicable
requirements.
Forward-looking statements
This document, including information included or incorporated by
reference in this document, may include statements that are, or may
be deemed to be, "forward-looking statements". These
forward-looking statements may be identified by the use of
forward-looking terminology, including the terms "targets",
"believes", "estimates", "plans", "projects", "anticipates",
"expects", "intends", "may", "will" or "should" or, in each case,
their negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. These forward-looking statements include all matters
that are not historical facts and involve predictions.
Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements reflect the
Company's current view with respect to future events and are
subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Company's business,
results of operations, financial position, liquidity, prospects,
growth or strategies and the industry in which it operates.
Forward-looking statements speak only as of the date they are made
and cannot be relied upon as a guide to future performance. There
are many factors that could cause actual results to differ
materially from those expressed or implied in forward-looking
statements. Among such factors are changes in the global,
political, social, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax rates, future business combinations or disposals, and any
epidemic, pandemic or disease outbreak.
These forward-looking statements are based on numerous
assumptions regarding the present and future business strategies of
such persons and the environment in which each will operate in the
future. By their nature, these forward-looking statements involve
known and unknown risks and uncertainties because they relate to
events and depend on circumstances that will occur in the future.
The factors described in the context of such forward-looking
statements in this document may cause the actual results,
performance or achievements of any such person, or industry results
and developments, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. No assurance can be given that such
expectations will prove to have been correct and persons reading
this document are therefore cautioned not to place undue reliance
on these forward-looking statements that speak only as at the date
of this document. All subsequent oral or written forward-looking
statements attributable to the Company or its affiliates or any
persons acting on its behalf are expressly qualified in their
entirety by the cautionary statement above. The Company does not
intend, nor undertakes any obligation, to update publicly or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent legally
required.
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END
MSCDKABBFBDDAKB
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