Edizione Srl, a holding company controlled by the Benetton family, and its investment vehicle Schematrentaquattro SpA agreed to sell the 50.1 percent stake for 10.25 euros a share, according to an e-mailed statement from March 28. The price represents a premium of about 22 percent on the volume-weighted average share price in the past six months, according to the statement.
The closing of the sale, expected in the third quarter, is subject to the approval by Dufry’s shareholders of a capital increase aimed at partially financing the transaction and the approval of antitrust authorities. Dufry will then start a mandatory bid for the rest of the shares at the same price, which gives World Duty Free an enterprise value of 3.6 billion euros.
Dufry will initially finance the transaction through a bridge facility of 3.6 billion euros, which it will refinance by selling at least 2.1 billion euros of equity and with as much as 1.5 billion euros of debt, the company said in a statement Monday. The retailer also forecast the purchase will boost cash earnings per share by a double digit percentage in the second year after the acquisition.
The Singaporean sovereign wealth fund GIC Pte, the Qatar Investment Authority and Temasek Holdings Pte each have committed to investing as much as 450 million francs in Dufry, the company said.
Acquiring World Duty Free, which operates stores at airports including London’s Heathrow and Gatwick, would create a business with a 24 percent market share in airport retail. Dufry Chief Executive Officer Julian Diaz has expanded the Swiss company through about a dozen acquisitions in the past decade, creating a dominant operator in the field of travel retailing. It acquired Hudson News, a chain of U.S. airport shops, in 2008.
World Duty Free operates 495 stores in 19 countries and 98 airports across the world, according to its website. The Benetton family has held a controlling 50.1 percent stake since the company was spun off from Autogrill SpA and began trading independently in 2013. The two companies combined would have had 2014 sales of more than $8 billion.
The Swiss company was in advanced talks to acquire World Duty Free, people familiar with the matter said on Feb. 20, asking not to be identified because the talks were private. Other potential bidders had included Korean competitor Lotte, people said in January.
World Duty Free closed at 10.96 euros on Friday in Milan trading, giving it a market value of 2.8 billion euros. Edizione and Schematrentaquattro were assisted by Bank of America Merrill Lynch, while World Duty Free was advised by Deutsche Bank AG. Dufry is working with Goldman Sachs Group Inc., UBS Group AG and Credit Suisse Group AG.
This article was written by Marco Bertacche, Tommaso Ebhardt and Manuel Baigorri from Bloomberg and was legally licensed through the NewsCred publisher network.