INTERNATIONAL. Dufry Group’s acquisition of a 50.1% shareholding in World Duty Free Group (WDFG), currently held by the Benetton family through its Edizione and Schematrentaquattro S.p.A. (Schema34) holdings, creates an extraordinary travel retail supergroup – responsible for around one-fifth of sector sales.
As reported, the transaction will trigger a mandatory takeover offer for the remaining WDFG shares. Dufry will finance the acquisition through a mix of debt and equity, raised through a rights issue which is underwritten by a group of banks and well-known cornerstone investors, the company said in a statement last night.
The sale price for the stake is €10.25 per share or a total consideration for Schema34 equal to €1.3 billion.
Based on The Moodie Report’s 2013 Top 25 Travel Retailers ranking (below), Dufry now controls 29.81% of the revenue generated by the (then) top ten players, 22.8% of the top 20 and 21.50% of the top 25 – a phenomenal market share, especially in the traditionally deeply fragmented sector of travel retail.
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Travel retail transformed: Dufry will have consolidated the sector’s second, sixth and seventh largest players into an industry tour de force with combined turnover of €6,697 million (based on 2013 numbers), some +65% more than DFS Group. Dufry now controls 29.81% of the revenue generated by the (then) top ten players, 22.8% of the top 20 and 21.50% of the top 25. |
The price per share represents a premium of around +22% on the volume-weighted average share market price of WDFG shares in the last six months to date.
The Moodie Report reliably understands that Dufry beat off strong but conditional approaches from Lotte Duty Free of South Korea and Sunrise Duty Free controlling shareholder, Hong Kong-based Boyu Capital.
The binding agreement covers the entire interest held by Schema34 in World Duty Free S.p.A. (50.1% of its share capital).
Minutes after the announcement, Dufry CEO Julián Díaz told The Moodie Report: “It’s a great opportunity for us and especially for our management.” He said it was too early to discuss the integration process that lies ahead (layered on top of Dufry bedding in its 2014 acquisition of Nuance), simply commenting: “We have a complete plan.”
On the price paid, he declined to comment other than to say: “The price is what we consider to be the right price for the asset.”
Explaining the choice of Dufry, WDFG Chairman (and Autogrill CEO) Gianmario Tondato told The Moodie Report: “We had higher prices and different offers”¦ from the Far East for example. Everyone showed up. The problem was that they were all conditional. The conditions were important for us. We wanted certainty.”
The closing of the sale of the stake is subject to the approval by Dufry’s shareholders’ meeting of a capital increase aimed at partially financing the transaction and to the approval by antitrust authorities.
It is expected that the closing of the sale will occur in the third quarter of 2015.
For further constantly updated reaction to and analysis of the deal see our “˜Moodie Live’ real-time Blog.
