Completion of the transformation of Detsky Mir into a private business
THIS PRESS RELEASE AND INFORMATION CONTAINED HEREIN ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO, OR TO ANY PERSON IN, ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION.
20 September 2023, Moscow, Russia. Detsky Mir Group (“Detsky Mir”, “PJSC Detsky Mir” or the “Company”, MOEX: DSKY), a specialised retailer and the leader in the children’s goods sector in Russia and Kazakhstan, informs that the transformation into a private business, announced back in November 2022, was completed.
The Company’s subsidiary, JSC DMFA, consolidated 58.26% of the voting shares of PJSC Detsky Mir (hereinafter referred to as the “Shares”), including the Shares, owned by its affiliates, based on the results of the share repurchase programs of PJSC Detsky Mir, announced in May 2023.
According to the terms of the Voluntary Tender Offer of JSC DMFA, repurchased Shares also could have been paid with other securities: shares of JSC DMC (owns 100% of shares in the non-public operating company LLC DM, spun off from PJSC Detsky Mir in May 2023). Thus, the shareholders of PJSC Detsky Mir, who accepted the Voluntary Tender Offer of JSC DMFA with an option to receive other securities (shares of JSC DMC) as an alternative to cash payments purchased 100% of Shares of JSC DMC and effectively, got the full control over the operating company LLC DM.
Next steps regarding shares of PJSC Detsky Mir
JSC DMFA will send a public offer to shareholders of PJSC Detsky Mir to repurchase Shares (hereinafter referred to as the “Mandatory Tender Offer”) with potential size of the offer up to 100% of the remaining outstanding Shares.
The price per ordinary Share in the Mandatory Tender Offer will not be lower than:
1) The weighted average price per Share, which is based on the results of organized trading for the six months preceding the date of submission of the Mandatory Tender Offer to the Central Bank of Russia; and
2) The highest price at which JSC DMFA and its affiliates repurchased the Shares during the six months preceding the date of sending the Mandatory Tender Offer to PJSC Detsky Mir.
Given the completed share repurchase programs of PJSC Detsky Mir announced in May 2023, it is expected that during the Mandatory Tender Offer price per ordinary Share will not be lower than 71.5 rubles per Share.
As previously reported, in accordance with a permission from the sub-committee of the Government Commission for Control over Foreign Investments in the Russian Federation (hereinafter referred to as “the Government Commission”), as part of the Mandatory Tender Offer, non-resident investors from unfriendly countries[1] and persons under their control who will participate in the Mandatory Tender Offer will be able to receive cash payments for the Shares sold only to C-type accounts.
The Company recaps that participation in the Mandatory Tender Offer is a right and not an obligation for shareholders. Shareholders can independently decide to participate in the Mandatory Tender Offer, taking into account the Company’s publicly announced plans, their own investment strategy and current market conditions.
It is expected that after the completion of the Mandatory Tender Offer, the Company may be liquidated, subject to the necessary corporate approvals. In this case, all remaining shareholders who, for one reason or another, do not take part in the offer to sell the Shares prior to such liquidation, will be able to receive the property of the liquidated company remaining after the completion of settlements with creditors (liquidation value) as part of the voluntary liquidation of PJSC Detsky Mir on a pro rata basis. The Company’s shares will be cancelled in this case.
The Company underscores that the liquidation value per Share that the Company’s shareholders will receive in the event of its voluntary liquidation may be lower than the price per Share acquired by JSC DMFA during the Mandatory Tender Offer.
The Company plans to request authorization from the Ministry of Finance of the Russian Federation to remit payments in cash, remaining after settlements with creditors during liquidation, for shares of non-resident investors from unfriendly countries to their respectively indicated accounts by bypassing C-type accounts. Should such authorization be granted, the shareholders may use the funds at their own discretion and no additional approval from the Russian regulator will be needed.
IMPORTANT INFORMATION
This announcement does not constitute a public offer, advertisement or a voluntary or mandatory tender offer under Russian law.
This announcement may contain forward-looking statements concerning the Company. Generally, the words “will”, “may”, “should”, “could”, “would”, “can”, “plan”, “opportunity”, “believes”, “expects”, “intends”, “anticipates”, “estimates” or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to business and management strategies of the Company. Many of these risks and uncertainties relate to factors that are beyond the Company’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements, which speak only as at the date of this announcement. The Company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.
[1] The list of unfriendly countries is set in accordance with the Decree of the Government of the Russian Federation No. 430-r dated March 5, 2022
For additional information:
Nikita Moroz
Investor Relations Director
Tel.: + 7 495 781 08 08, ext. 2315
NMoroz@detmir.ru