Ad-Hoc Notice
10 December 2020, Moscow, Russia. – Detsky Mir PJSC (“Detsky Mir” or the “Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, informs that in light of the offer to the Company’s shareholders to submit applications to sell up to 29.9% of the Company’s shares (the “Offer”) announced by Altus Capital (“Altus), the Board of Directors of the Company (the “Board”) has received an answer to its list of clarifying questions about the Offer (the “List”) that had been sent to an Altus representative. The answer was received in form of a letter dated 7 December 2020 (the “Letter”) signed by a director of management company UFG Capital Investment Management Limited on behalf of Gulf Investments Limited, the company which has made the Offer (the “Acquirer”). On 9 December 2020, the financial and legal advisors of the Special Capital Markets Committee of the Board (the “Committee”) spoke on the telephone with the representatives and advisors of Altus to additionally clarify the answers in the Letter (the ”Call”).
In the Letter and on the Call, Altus and the Acquirer explained certain aspects of the Offer, which the Committee considers important to disclose to the Company’s shareholders, in particular:
- The Acquirer does not own any shares of the Company (or other securities, which, under Russian law, are aggregated when determining crossings of ownership thresholds that give rise to obligations to comply with mandatory tender offer requirements for acquisition of shares of a Russian joint-stock company), does not have an intention to acquire 100% of the Company’s shares, and does not have any agreements to acquire shares of the Company from third parties outside the scope of the Offer;
- The Acquirer plans to acquire no more than 220,961,000 of the Company’s shares, which represents 29.9% of the total number of the Company’s shares outstanding;
- The Offer does not extend to shareholders from several jurisdictions outside of Russia, including, among others, the USA (as well as dependent territories of the USA, individual states of the USA, and the District of Columbia), in order to avoid the need to comply with various regulations in those jurisdictions that could have otherwise been applied to the Offer if it were extended to shareholders from such jurisdictions, and this exclusion is not driven by any sanctions restrictions in respect of the Acquirer;
- Altus and the Acquirer are not acting as part of a consortium, the Offer is being made in good faith and in accordance with Russian securities laws, and the Acquirer intends to honor its obligations under the Offer.
At the same time, a number of questions from the List were answered in the Letter and on the Call partially, or left without an answer or comment. Among questions that have remained without full explanation are the following:
- To what extent are Altus and the Acquirer acting exclusively in their own interests, and not also in the interests of any third parties, clients, co-investors and/or other financing sources, and the identities of such third parties, clients, co-investors and/or financing sources (if any);
- Confirmation that neither Altus, nor the Acquirer, nor their affiliates directly or indirectly own any financial instruments (besides shares of the Company) that represent rights to acquire or sell shares of the Company, or rights to participate in the financial performance of the Company, or rights to participate in changes of prices of the Company’s shares, or have any agreements to buy or sell such financial instruments, or have any disposal rights in relation of such financial instruments;
- The ability and readiness of Altus and the Acquirer to guarantee, beyond their own representations, that they will be able to meet their obligations to the Company’s shareholders who submit applications to sell shares of the Company in response to the Offer, or to provide an independent confirmation of availability of funds;
- The Acquirer’s readiness to amend its proposal and make it available to all shareholders of the Company, as well as prospects of amendments to the proposed procedure for submitting applications in light of the reported difficulties that some of the shareholders of the Company have encountered;
- The Acquirer’s readiness to increase its price offer;
- Specific plans around proposing changes to the composition of the Board and the management of the Company contemplated by Altus, the Acquirer, and/or their affiliates.
Since neither the Company, nor its management, nor its Board, nor the Committee, nor their advisors are parties to the Offer, the Company, its management, its Board, the Committee and their advisors do not and cannot bear responsibility of any sort for the contents of the Offer and its related documents, or for any action, inaction or announcements by any parties to the Offer. All information regarding the answers received in response to the List is derived entirely from the contents of the Letter and the Call, and the Company, its management, its Board, the Committee and their advisors have not independently verified this information and do not express any views or give any representations with respect to its completeness or accuracy. The shareholders of the Company should exercise their own judgment and consult their own financial and other advisors when making decisions as to whether or not to take this information into account, and also when making decisions regarding the Offer.
For additional information:
Goldman Sachs
Dmitri Sedov
Tel: +7 495 645 4223
dmitri.sedov@gs.com
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The Detsky Mir Group of Companies (MOEX: DSKY) is an omnichannel retailer and the leader in the children’s goods sector in Russia. The Group comprises the Detsky Mir and the Detmir Pickup retail chains, the detmir.ru online store and marketplace, as well as the Zoozavr pet supplies retail chain. The Company operates a retail chain of 805 Detsky Mir stores located in 319 cities in Russia, Kazakhstan and Belarus, 13 Detmir Pickup stores, as well as 14 Zoozavr stores as of 30 November 2020. The total selling space was approximately 872,000 square meters.
Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: Free float[1] – 100%.
Websites: detmir.ru, ir.detmir.ru.
([1]) Excluding quasi-treasury shares and shares held by management and directors (0.8% of total shares).