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Jelmoli Holding Ltd
Media information
Zurich 28 January 2009, 07.00
Jelmoli Provides Further Information on Tivona Settlement
Jelmoli Holding Ltd (“Jelmoli”) announced last Friday (23 January 2009) that it had
signed an agreement with the other shareholders in Tivona AG (“Tivona”), whereby
Jelmoli will acquire the remaining 55.5% stake in Tivona for 80,000 bearer shares and
CHF 60 million in cash, settling all outstanding claims and counterclaims pending
before the arbitral tribunal as well as all other disputes among the parties. The
transaction will remove a significant factor of uncertainty for the company and
substantially increase the book equity value of the combined Jelmoli group in 2009,
while having only a minor negative dilutive impact for shareholders.
While Jelmoli will provide full details of the financial impact of the Tivona settlement on
closing of the transaction and on publication of the 2008 annual report, Jelmoli is
providing further indicative guidance today, following the initial information presented
at the shareholders’ meeting held on 23 January 2009.
Jelmoli Property Value Increases to Approximately CHF 4.1 billion
As a result of the transaction, the property value of the combined Jelmoli group,
(excluding Seiler) valued according to IAS 40, will increase to CHF 4.1 billion. The
Jelmoli book equity value will increase significantly and the LTV (loan-to-value) ratio
will remain well below the upper end of the previously communicated target range of
40% to 50%. More than 90% of the property value of Tivona of approximately
CHF 900 million is derived from rented properties (more than 50% of the portfolio) and
projects under construction which are well advanced.
Only Minor Dilution of Shareholders
The distribution of 80,000 bearer shares to Tivona shareholders and the cash
payment are expected to have only a minor dilutive impact on the book equity value
per share as of 31 December 2008. The 55.5% stake will be acquired for
approximately CHF 240 million (valued at the closing price of CHF 2,220 per bearer
share as of Thursday, 22 January 2009). In return, Jelmoli will fully consolidate an
additional book equity value of approx. CHF 165 million as a result of the acquisition
of the outstanding 55.5% stake in Tivona it does not yet own, based on a book equity
value for 100% of Tivona of approx. CHF 300 million as of 31 December 2008. Jelmoli
will further benefit from the positive impact of an enhancement to the book value of its
existing 44.5% stake upwards by approximately CHF 40 million, leading to a net
dilutive impact for shareholders of around CHF 35 million. This compares to a market
capitalisation of Jelmoli as of 22 January 2009 of approximately CHF 1.7 billion.
However, Jelmoli expects additional upside from the completion of large projects
currently under construction, but to be completed in 2009 (e.g. the Stücki Shopping
Center in Basel) and the remaining project pipeline. In addition, Jelmoli was able to
negotiate a tax-efficient transaction structure and a satisfactory sale and purchase
agreement, including customary representations and warranties, all of which would
not have been possible as part of a ward of the arbitral tribunal.
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Removal of Litigation Risks
While the cash payment is payable in full on closing, Jelmoli is entitled to deliver the
80,000 bearer shares in two tranches. The first tranche of 55,000 bearer shares,
which is deliverable on closing, is fully covered by Jelmoli’s treasury shares. For the
second tranche of 25,000 bearer shares, which is payable on 1 July 2009, Jelmoli has
the right to deliver either (i) shares to be acquired in the market, (ii) newly issued
shares or (iii) to pay an equivalent cash amount.
In comparing the settlement with the draft expert valuation delivered in the arbitration
proceedings, it is important to consider the following:
1. The draft expert valuation indicated a value of CHF 149.5 millions for Tivona
in 2003, not today.
2. The draft expert valuation of CHF 149.5 million translates through a defined
formula into approximately 83,000 Jelmoli bearer shares. The announced
settlement is for only 80,000 Jelmoli bearer shares. There is no guarantee that the
further proceedings before the arbitral tribunal would not have resulted in a
valuation higher than the preliminary CHF 149.5 million and would not have led to
a materially higher number of shares to be delivered by Jelmoli.
3. The arbitration proceedings between Jelmoli and Tivona were not only about the
valuation of Tivona in 2003, but also about significant other claims and
counterclaims (e.g. dividend payments, interest, penalty payments etc.). With the
cash payment of CHF 60 million, all these claims and counterclaims have been
settled.
The settlement agreement and the implied valuation for the 55.5% stake are therefore
not comparable with the draft expert valuation. Jelmoli is convinced that the settlement
agreement is significantly more beneficial for its shareholders than bearing the
uncertainties, costs and risks inherent to ongoing legal disputes.
Contacts
Media:
Dr. Jörg Neef, Hirzel. Neef. Schmid. Konsulenten
+41 79 405 56 32, E-mail: joerg.neef@konsulenten.ch
Investors/Analysts: Michael Mueller, Jelmoli Holding AG
+41 44 220 4913, E-mail: michael.mueller@jelmoli.ch
Internet:
WAP mobile:
E-mail:
www.jelmoliholding.ch / www.huginonline.ch/JEL
wap.huginonline.com (Press Releases Jelmoli)
info@jelmoliholding.ch
This media information contains forward looking statements which express intentions, estimates, expectations and forecasts relating to
future financial, operational and other developments and results. Such statements and the underlying assumptions are subject to a variety
of risks, uncertainties and other factors which could mean that the actual developments may significantly differ therefrom. Investors
should also note that the described transaction may fail, in full or in part, or may be delayed. In view of these uncertainties, readers of
this media information are cautioned not to place undue reliance on such forward looking statements.
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