The offer, at a price of S$1.05 per share, values RSH at S$370 million. The price represents a 12.5% discount to the last traded price on February 28 and a 7% premium to the volume weighted average price for one month prior to the announcement.
The offer is conditional on the acquirers - through acquisition vehicle, Golden Ace - and persons acting in concert acquiring more then 76.076%.
Mohamed Ali Alabbar is chairman of both Emaar Properties and RSH. He owns 25.968% of RSH and has undertaken that he will not tender his shares. Thus, the acquirers need to mop up 50.1% of the outstanding share capital to satisfy the condition. The acquirers intend to maintain RSH as a listed company.
The chief executive officer of RSH, Jagdev Singh Gill, and other defined individuals, have undertaken to ensure that 42.498% of RSH will be tendered during the offer. Another shareholder Bukhary who, directly and indirectly, controls 8.684% of RSH has agreed to tender its shares should the acquirers not reach the target 50.108% through a combination of GillÆs shareholding and public shares. Gill will step down as CEO but has agreed to continue with RSH as a non-executive advisor for an undisclosed transitional period to ensure continuity of business and business relationships.
RSH is a pan-Asian distributor and retailer of sports, golf, active lifestyle and fashion products. It has a network of 430 standalone stores and 570 shops-in-shops across 12 countries. It also has rights for Zara, Massimo Dutti, Mango, bebe, Ted Baker and other brands. Expansion of the business in the Indian sub-continent and the Middle East are stated reasons for the acquisition as the acquiring consortium has strategic advantages in these locations.
Emaar and MGF will effect the takeover through a joint venture company, Golden Ace. Golden Ace is owned 30% by Emaar Retail, an indirect wholly owned subsidiary of Emaar Properties and 70% by an MGF subsidiary.
Emaar Properties is a Dubai-based public joint stock company primarily in the real estate business. The Government of Dubai is a major shareholder owning 32%. Its past projects include the Burj Dubai and the Dubai Mall and it is currently developing various projects including Dubai Marina, Arabian Ranches and others. It operates in 15 markets including India and Singapore and its projects outside Dubai are valued at more than $60 billion. For the year ended December 31, 2006, it had revenues of $3.8 billion, up 68% year-on-year, on which it earned a net profit of $1.74 billion.
MGF Retail is India-based MGF GroupÆs foray into lifestyle products. The MGF Group develops commercial complexes, shopping malls and retail developments.
Emaar and MGF have collaborated on past projects. In 2005, Emaar and MGF formed a joint venture Emaar-MGF Land to develop projects in India in Delhi, Andhra Pradesh, Karnataka, Tamil Nadu and Maharashtra. One of the first projects being marketed by the duo is a luxury residential apartment block in outsourcing hub, Gurgaon near Delhi.
DBS is acting as advisor to Golden Ace.
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