DFI agrees 10% equity stake disposal to Heinemann ASPAC
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Malaysian duty free retailing group Duty Free International (DFI) is primed to sell a minority stake of its business to Heinemann Asia Pacific.
The sale and purchase agreement includes the disposal of a 10% equity interest plus one share – comprising an aggregate 20,996,384 shares – in wholly-owned subsidiary DFZ Capital Berhad (DFZ) to Heinemann Asia Pacific for a consideration of €19,700,000.
Under the terms, Heinemann Asia Pacific are also entitled to purchase a second tranche of shares in DFZ Capital Berhad (DFZ) via a call option (€1 per share) in an 18-month period beginning on the date that the first tranche of sales are completed.
A further option to purchase a third tranche of shares in a 12-month period will begin on the date of expiry of the second tranche call option period – taking the total share eligibility of Heinemann Asia Pacific to 25% in a potential overall transaction of €52.21 million.
The completion of the sale and purchase of the first tranche of shares is expected to take place on 1 June.
A DFI statement read: ‘The company views HAP as a strategic investor, and the proposed disposal is expected to enable the company to benefit from the resources and expertise of Gebr. Heinemann and HAP in the areas of product assortment and costing, retail store management, distribution and logistics management of DFZ products.’
“The completion of the sale and purchase of the first tranche of shares is expected to take place on 1 June.”
‘HAP’s investment in DFZ will allow Malaysians and visitors to Malaysia an enhanced travel retail experience, one on par with the best available in the world. The proposed disposal is also expected to further strengthen the group’s financial strength, enabling the group to consider future business opportunities.’
Heinemann Asia Pacific CEO Max Heinemann is confident the joint venture with DFZ will realise synergies and new growth opportunities in Malaysia.
Gebr. Heinemann says the joint venture agreement will not only strengthen the presence of the company in Malaysia but will ‘realise gross margin and operational synergies for DFZ Capital Berhad’, with Heinemann Asia Pacific involved in day-to-day operations and overall decision making.
Max Heinemann, CEO of Heinemann Asia Pacific said: “Looking at the similar business models and corporate cultures of both companies, Gebr. Heinemann and DFI believe this joint venture to be a great strategic fit for growth together in Malaysia.”
Malaysia’s fast-growing retailing group has more than 30 years’ experience operating at airports, seaport, downtown, border towns and popular tourist destinations at entry and exit points on the peninsular.
DFZ operates duty free retail, duty free wholesale and duty paid outlets throughout the region in areas such as Pedang, Besar, Langkawi, Bukit Kayu Hitam, Kuala Lumpur International Airport and Johor Bahru.
Questions & Answers
Q.What is the total maximum equity Heinemann Asia Pacific could eventually hold in DFZ Capital Berhad?
What is the total maximum equity Heinemann Asia Pacific could eventually hold in DFZ Capital Berhad?
Heinemann Asia Pacific is eligible to acquire a total of 25% equity in DFZ Capital Berhad through a series of options. This includes the initial 10% stake and two further tranches of shares.
Q.How does DFI expect to benefit from Heinemann Asia Pacific's investment in DFZ Capital Berhad?
How does DFI expect to benefit from Heinemann Asia Pacific's investment in DFZ Capital Berhad?
DFI expects to benefit from Heinemann Asia Pacific's resources and expertise in product assortment, costing, retail store management, and logistics. This partnership aims to enhance the travel retail experience and strengthen DFI's financial position.
Q.What specific areas will Heinemann Asia Pacific be involved in regarding DFZ Capital Berhad's operations?
What specific areas will Heinemann Asia Pacific be involved in regarding DFZ Capital Berhad's operations?
Heinemann Asia Pacific will be involved in the day-to-day operations and overall decision-making for DFZ Capital Berhad. This involvement is intended to create gross margin and operational synergies for the company.
Q.When is the initial sale and purchase of the first tranche of shares expected to be finalised?
When is the initial sale and purchase of the first tranche of shares expected to be finalised?
The completion of the sale and purchase agreement for the first tranche of shares is anticipated to take place on 1 June. This initial transaction involves a 10% equity interest plus one share.
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