28 March 2019

CNMV Authorises LetterOne’s Voluntary Tender Offer as part of rescue plan for DIA

LetterOne’s Voluntary Tender Offer for €0.67 per share is part of its comprehensive rescue plan for DIA

Madrid, 28 March 2019: L1R Invest1 Holdings S.a r.l. (“LetterOne”), owner of 29% of Distribuidora Internacional de Alimentación, S.A. (“DIA” or the “Company”), today received authorisation from the CNMV for its voluntary tender offer (the “VTO” or the “Offer”). LetterOne’s VTO acceptance period is expected to open on 1 April and close on 23 April and allows shareholders who decide to tender their shares to receive €0.67 per share. LetterOne encourages all shareholders to tender their shares in the VTO.

Remaining conditions to LetterOne’s VTO

LetterOne’s VTO is conditional only upon (1) the acceptance by shareholders holding at least 50% of DIA’s shares other than those already held by LetterOne; and (2) the Company not issuing shares or other instruments convertible into shares prior to the end of the acceptance period of the VTO.
With regard to the second condition, the 2019 General Shareholders’ Meeting of the Company held on 20 March 2019 (a) approved the execution of the €500 million share capital increase proposed by LetterOne, which, if applicable, shall be executed once the Offer has been settled and the other conditions to the capital increase have been met, and (b) rejected the share capital increase proposed by the Board of Directors of the Company. As such, LetterOne considers it likely that this condition will be fulfilled.

LetterOne’s VTO is NOT conditional on its proposed share capital increase

The execution of the €500 million share capital increase proposed by LetterOne, which was approved by the 2019 General Shareholders’ Meeting, is subject to the fulfilment of the following conditions prior to 18 July 2019: (i) positive result of this Offer and appointment of a majority of the members of the Board of Directors of the Company as proposed by LetterOne, and (ii) an agreement being reached by the Company with the creditors holding the bank debt of the Company in relation to a viable long-term capital structure of the Company.

These conditions to the proposed share capital increase are NOT conditions to the VTO.

There are significant risks for all shareholders (including LetterOne) if the VTO does not have a positive result or the remaining conditions to the €500 million share capital increase are not met

LetterOne understands that the Board of Directors of the Target Company will need to find solutions to cure negative equity and to meet its financing obligations. In the event that the Offer does not have a positive result, or any of the other conditions to execution of the €500 million share capital increase approved by the 2019 General Shareholders Meeting are not fulfilled, the Board of Directors of DIA may be obliged to carry out measures in relation to its financial situation, such as, amongst others, the declaration of insolvency or the capitalisation of the bank debt by the lending banks.

Shareholders that decide not to tender their shares in the VTO risk the minimum acceptance condition of the VTO not being satisfied and the VTO being unsuccessful as a result.

Shareholders who decide not to tender in the VTO and want to retain their shares will share significant execution risk with LetterOne

Even if the VTO has a positive result, shareholders who decide not to tender their shares because they wish to remain shareholders of the Company are reminded that LetterOne’s capital increase, which is required to ensure the future viability of the Company, will also depend upon the other conditions to the capital increase being met, including an agreement being reached by the Company with the creditors holding the bank debt of the Company in relation to a viable long-term capital structure of the Company. Such shareholders are also reminded that they will share in the significant execution risk of a turnaround plan with no guarantee of success and which will require several years to potentially yield positive results. LetterOne makes no commitment to maintain the former dividend policy of DIA after settlement of the Offer and does not believe it will be reasonable for DIA to distribute dividends in the next few years.

LetterOne encourages all shareholders to tender their shares in the VTO at €0.67 per share

Stephan DuCharme, Managing Partner of L1 Retail, commented: “We are pleased with the CNMV authorization of the VTO prospectus and note that the conditions to LetterOne’s VTO include the acceptance by shareholders holding at least 50% of DIA’s shares other than those held by LetterOne. We therefore encourage all shareholders to tender their shares in the VTO and receive €0.67 per share.
“DIA’s General Shareholders’ Meeting approved LetterOne’s €500m capital increase and we now encourage all shareholders to tender their shares in order to enable this capital increase to be executed and DIA to be recapitalized.
“DIA’s current situation is very challenging, with sales declining on a like-for-like basis and a significant loss of market share. DIA requires a capital injection and change in governance and leadership to deliver a demanding transformation, led by LetterOne, following a successful VTO and satisfaction of the remaining conditions.”

View prospectus

 

Enquiries
For further information on the Offer, please refer to the prospectus of the Offer and its ancillary documentation as authorised by the CNMV.

For further enquiries, please also contact:

Spanish media:
Aida Prados
+34 636 424 483
aprados@estudiodecomunicacion.com
Juan Frances
+34 679 962 382
jafrances@estudiodecomunicacion.com

Shareholder Engagement and Corporate Governance advisers:
Boudicca
+44 (0) 203 475 5158 (UK) / +34 9112 38259 (Spain)
L1Retail@boudiccaproxy.com

International media:
Stuart Bruseth
LetterOne
+44 203 815 3385
sbruseth@letterone.com

Billy Clegg / Jennifer Renwick / Nick Hennis
Camarco
L1Retail@camarco.co.uk
+44 203 757 4983 / +44 203 757 4994


Further Information

How shareholders can accept the VTO

  • The shareholders who decide to accept the Offer will need to contact the financial intermediary through which they hold their shares in order to provide instructions for the acceptance of the Offer during the acceptance period, which is expected to start on1 April
  • For further details, please refer to section 3.2 of the Tender Offer Document named “Formalities with which the addressees of the Offer must comply in order to express their acceptance, as well as the procedure and timeline within which they will receive the Offer Consideration”

Expected key deadlines for the VTO

  • Publication of regulatory announcements (newspaper and stock exchanges gazettes): 29 March 2019
  • Acceptance period begins: 1 April 2019
  • Acceptance period ends: 23 April 2019

Sources for further information: 

The authorised Tender Offer Document and its ancillary documentation shall be available from 1 April 2019 in hard copy to any interested parties in the headquarters of the CNMV in Madrid and Barcelona, in the Governing Bodies of the Securities Exchanges of Madrid, Barcelona, Valencia and Bilbao, in the headquarters of L1R Invest1 Holdings S.à r.l. and in the headquarters of DIA


In addition, the authorised Tender Offer Document alone, without its schedules, is available on the respective websites of the CNMV(http://www.cnmv.es/portal/home.aspx), L1R Invest1 Holdings S.à r.l. (https://www.letterone.com), DIA (https://www.diacorporate.com/en/) as well as at https://www.makediaachampion.com/