28 NOV 1997
The Board of Compagnie Financière Richemont AG ("Richemont") announces that it has approached the Board of Vendôme Luxury Group ("Vendôme") to seek its support for possible proposals which may result in the effective acquisition by a wholly-owned subsidiary of Richemont SA, Luxembourg of the outstanding minority units in Vendôme for 495p per unit in cash. In addition, Vendôme unitholders would continue to be entitled to receive the interim dividend of 3.7p (net) per unit declared by the Vendôme Board on 26th November, 1997.
The proposals, which would be subject, inter alia, to the recommendation of the Vendôme Board and the approval of Vendôme's minority unitholders, are likely to involve a Vendôme Luxury Group PLC Scheme of Arrangement in the UK and a scheme relating to Vendôme Luxury Group SA in Luxembourg. Richemont may decide not to proceed with the proposals in the event of any further collapse in the world markets which would be likely to have a material adverse impact on the business of Vendôme.
It is expected that the Vendôme Board will appoint a committee of independent directors to consider Richemont's proposals and advise minority unitholders.
The price of 495p per unit represents a premium of 25.8 per cent over the closing middle market price of Vendôme units on 27th November, 1997 of 393.5p and a multiple of 18.7 times Vendôme earnings per unit for the year ended 31 March, 1997. This price values the whole of Vendôme at £ 3 454 million and the 30 per cent minority holdings at £ 1 036 million. A financing commitment for the full amount of the cash consideration has been provided by Deutsche Bank.
A further announcement will be made in due course.
This announcement has been approved for the purposes of Section 57 of the Financial Services Act 1986 by Morgan Grenfell & Co. Limited ("Deutsche Morgan Grenfell") which is regulated by The Securities and Futures Authority Limited.
Deutsche Morgan Grenfell is acting for Richemont in relation to this matter and is not advising any other person. Accordingly, Deutsche Morgan Grenfell will not be responsible to anyone other than Richemont for providing the protections afforded to customers of Deutsche Morgan Grenfell.
COMPAGNIE FINANCIÈRE RICHEMONT AG
RIGISTRASSE 2 CH-6300 ZUG SWITZERLAND
TELEPHONE 041 710 33 22
TELEFAX 041 711 71 02
TELEX 862 336 CFR CH
Notes to editors
Vendôme is a luxury goods group in which Richemont has a 70 per cent interest. Companies in the Vendôme group design, manufacture, market and distribute a range of luxury products including jewellery, watches, writing instruments, leather goods, menswear and accessories, fragrances, lighters and ladies' fashions and accessories. The principal brand names owned by Vendôme are Cartier, Alfred Dunhill, Montblanc, Piaget, Baume & Mercier, Vacheron Constantin, Lancel and Chloé.
On 26th November, 1997 Vendôme published its interim results for the six months ended 30th September, 1997. For this period, Vendôme had net turnover of £ 693.1 million (1996: £ 703.6 million), operating profit of £ 114.1 million (1996: £ 109.8 million) and profit attributable to unitholders of £ 84.3 million (1996: £ 83.5 million). Earnings per unit were 12.1p (1996: 12.0p). An interim dividend of 3.70p (net) per unit (1996: 3.62p) was declared and will be paid on 30th January, 1998.
Each Vendôme unit comprises one share in Vendôme Luxury Group PLC twinned with one share in Vendôme Luxury Group SA, Luxembourg. The units are listed on the London Stock Exchange and the Luxembourg Stock Exchange.
Richemont is an industrial holding company based in Switzerland and is quoted on the Swiss Stock Exchange. Richemont depository receipts are traded on the Johannesburg Stock Exchange and over the counter in New York and London. Richemont has a market capitalisation of SF 8 310 million (£ 3 490 million). *
In addition to its 70 per cent interest in Vendôme, Richemont's principal business interests are:
Rothmans International, in which it has a two-thirds interest. Companies in the Rothmans International group manufacture, distribute and sell a wide range of well-known brands of cigarettes, cigars and smoking tobaccos throughout the world. Principal trade marks owned or controlled by Rothmans International include Rothmans, Peter Stuyvesant, Dunhill, Craven "A" and Winfield. The remaining one-third of Rothmans International is owned by Rembrandt Group Limited.
Canal+, a company in which Richemont has a 15 per cent interest. Canal+ is Europe's leading pay television group, broadcasting via a combination of terrestrial, cable and satellite methods. Canal+ has a market capitilsation of FF 31 580 million (£ 3 200 million). *
For the year ended 31st March, 1997, Richemont reported net sales of £ 4 755.8 million (1996: £ 4 306.9 million), attributable profit of £ 302.9 million (1996: £ 316.1 million) and earnings per unit of £ 52.75 (1996: £ 55.05) (before amortisation of goodwill and exceptional items).
Richemont's interim results for the six months ended 30th September, 1997 will be announced on Monday, 1st December 1997.
* Based on the closing price of Richemont and Canal+ of SF 1 592 and FF 1 007 respectively on 27th November, 1997 and using exchange rates £/SF = 2.38 and £/FF = 9.88.