- Galeries Lafayette to pursue its strategy across its three businesses (department stores, City-marchés and consumer credit and loyalty program services)
- Ambitious industrial project in consumer credit between Galeries Lafayette and Cetelem (subsidiary of BNP Paribas), through the joint control of Cofinoga
The Moulin family, historical shareholders of the Galeries Lafayette Group with a 31.7% stake, and BNP Paribas have reached agreement on a new phase in the partnership between the two groups.
This partnership will on the one hand ensure the unity and durability of the Galeries Lafayette Group by stabilising its shareholder base and will and the other hand strengthen the partnership between Galeries Lafayette and Cetelem in the consumer credit sector by bringing Cofinoga under their joint control. It is accompanied by an ambitious industrial project.
1. Public tender offer filed on behalf of SEMAD (holding company of the Moulin family) and financed by BNP Paribas for all of the outstanding share capital of Galeries Lafayette.
Acting together in concert, the founding Moulin and Meyer families have been the controlling shareholders of the Galeries Lafayette Group until now. The Meyer family has now decided to dispose of its interest in the Galeries Lafayette Group and BNP Paribas, the group's historical partner, has acquired the Meyer family's interest to further support the Moulin family. Following the constitution of a new concert in respect of approximately 60% of the group's share capital, SEMAD (a holding company majority owned by the Moulin family) filed a public tender offer for the outstanding share capital of Galeries Lafayette at a price of euros 235 per share. Financing of the offer will be provided by BNP Paribas.
The terms on which the Moulin family will acquire control of Galeries Lafayette are as follows:
- Contribution by the Moulin family and BNP Paribas of their shareholding in the Galeries Lafayette Group to SEMAD, a holding company majority owned by the Moulin family;
- Filing of a public tender offer by SEMAD and BNP Paribas for the outstanding share capital of Galeries Lafayette; and
- The relationship between BNP Paribas and the Moulin family as shareholders of SEMAD will be governed by a shareholders' agreement. This will include the terms on which BNP Paribas will be provided with liquidity for its investment, the intention being for BNP Paribas to exit from SEMAD's share capital over time.
The offer price of euros 235 per Galeries Lafayette share is attractive for Galeries Lafayette Group's shareholders and represents a premium of 7.2% over the one-month weighted average share price as at 24 March 2005 and a premium of 41.1% over the weighted average share price in the month prior to 14 December 2004, the day prior to the declaration of an acquisition of more than 10% of the share capital of the Galeries Lafayette Group by Crédit Mutuel.
Assuming an acceptance level of 100%, the offer to acquire the minority shareholders of Galeries Lafayette will be financed by senior and subordinated SEMAD debt for a total amount of euros 1.585 billion. Following the offer, BNP Paribas will hold an equity stake amounting to euros 585 million.
2. Galeries Lafayette to pursue its strategy across its three businesses (department stores, City-marchés and consumer credit services)
This agreement will reinforce the group's development strategy in its three businesses. In its department store business, which had a turnover of euros 2.5 billion in 2004, the group will continue to roll out new initiatives (such as Lafayette Maison and Lafayette V.O…), and open flagship stores outside Paris at the same time as maintaining its operating profitability targets by 2006. For City-marchés (Monoprix), which had a turnover of euros 3.8 billion in 2004, the group intends to continue to develop its presence in city centres through innovative products and initiatives (Monop').
3. An ambitious industrial project in consumer credit in France and Europe through the joint control of Cofinoga by the Galeries Lafayette Group and Cetelem.
Prior to the transactions, BNP Paribas held an economic interest of 49% in Cofinoga principally through its subsidiary Cetelem which should see its interest increase to 50% of Cofinoga's share capital following the proposed transactions, enabling it to control Cofinoga jointly with the Galeries Lafayette Group.
Cofinoga benefits from a very successful pan-European platform and clear competitive advantages. Number 3 consumer credit specialist in France with a net banking income (NBI) of euros 878 million in 2004 and euros 10 billion of managed receivables, Cofinoga has developed over the past 30 years a franchise and expertise in financial services (private label cards, traditional personal loans, direct and revolving credits), and non-financial services (loyalty programs, CRM) and enjoys highly successful partnerships (Banque Casino, Petrofigaz). The Cofinoga card is accepted in 25,000 consumer outlets across more than 80 brands. More than 40% of Cofinoga's business is carried out abroad thanks to its European presence covering the Netherlands, Belgium, the UK, Poland and Southern Europe. Cofinoga enjoys a dynamic growth profile with an increase in NBI of over 8% in 2004.
The agreement provides for the implementation of an industrial project based on three key principles:
1. Maintaining Cofinoga's commercial autonomy, given the complementary nature of the product offering. Cofinoga will be positioned separately from Cetelem, being notably the sole supplier to the Galeries Lafayette Group's brands. It will be the preferred vehicle for banking and insurance partnerships as well as for the development of Northern European operations.
2. Realising cost synergies between platforms increasing the profitability of Cofinoga and Cetelem. Cost synergies relate to funding costs (application of BNP Paribas' refinancing margin), to certain operating costs in France and internationally and to the cost of risk (assessment and scoring tool sharing).
3. Realising revenue synergies and develop new activities. These synergies will be derived from cross-selling of protection products on Cofinoga's receivables, and from the increase in sales of insurance products to its customers.
4. A value enhancing project for all parties
Galeries Lafayette is an international retail and financial services group with recognised know-how, highly skilled employees and quality assets. The consolidation of the family control of the Galeries Lafayette Group will enable it to implement a determined development strategy, which will be value-enhancing for shareholders and offer favourable perspectives to employees.
BNP Paribas, the European leader in the consumer credit sector, was able to seize this unique opportunity to strengthen its position in the sector made available by the historical partnership between Cetelem and Cofinoga and by the reorganisation of the shareholder structure of Galeries Lafayette.
The transaction will have an immediately accretive impact on BNP Paribas' net earnings per share.
For SEMAD, Phillipe Houzé declared: "One of the key values of our group has always been its family rooting. At a decisive moment in its history, an optimal solution has been found with the full backing of the two families and in partnership with BNP Paribas that will allow the group to pursue the development of all of its businesses."
For BNP Paribas, Baudoin Prot added: “The partnership between BNP Paribas and the Galeries Lafayette Group is based on a long standing relationship. Today marks a new strategic phase for BNP Paribas and the Moulin family. It guarantees the future of the Galeries Lafayette Group and the implementation of an ambitious industrial project for Cofinoga, which will be jointly controlled with Cetelem”.
SEMAD is being advised for this transaction by Bucéphale Finance and the BNP Paribas group is being advised by BNP Paribas Corporate Finance and Goldman Sachs Paris Inc & Cie.
A press conference will be held on
Tuesday 29 March 2005 at 10 a.m. CET
Galeries Lafayette – Salon Opéra (7th floor)
Mogador entrance (corner of boulevard Haussmann and rue de Mogador)
______________________________________
SOCIETE ANONYME DES GALERIES LAFAYETTE
SA with a Management Board and Supervisory Board
Share capital: euros 26,762,290
Registered office: 40 Bld Haussmann- PARIS 75009
542 094 065 RCS PARIS
A meeting of the Supervisory Board of the Société Anonyme des Galeries Lafayette (SAGL) was held at 8 p.m. on 28 March 2005. It was informed of:
1) the proposed acquisition by BNP Paribas of 3,947,317 shares representing 29.5 % of the share capital of the Company held by the Meyer family at the price of euros 235 per share, 2004 dividend attached;
2) following this acquisition, the proposed filing of a joint public tender offer by BNP Paribas and the Moulin family for the shares of SAGL that they do not hold at the same price of euros 235 per share, 2004 dividend attached; and
3) the principles of an industrial partnership SAGL and Laser/Cofinoga which BNP Paribas and the Moulin family intend to jointly implement to ensure the development of the group's three businesses: department stores, Monoprix and consumer credit and loyalty program services.
The members of the Supervisory Board present at the meeting and able to vote, unanimously responded very positively to this transaction project as a concerted and friendly proposal which they consider able to ensure the durability and development of the group. The price at which the offer will be made will allow those shareholders who wish to sell their shares to do so on very satisfactory terms.
- Ambitious industrial project in consumer credit between Galeries Lafayette and Cetelem (subsidiary of BNP Paribas), through the joint control of Cofinoga
Download the slides of the presentation
- Replay of the conference call until 5 April:
Phone number: +44 (0) 208 515 2499 - Pincode: 446802#
The Moulin family, historical shareholders of the Galeries Lafayette Group with a 31.7% stake, and BNP Paribas have reached agreement on a new phase in the partnership between the two groups.
This partnership will on the one hand ensure the unity and durability of the Galeries Lafayette Group by stabilising its shareholder base and will and the other hand strengthen the partnership between Galeries Lafayette and Cetelem in the consumer credit sector by bringing Cofinoga under their joint control. It is accompanied by an ambitious industrial project.
1. Public tender offer filed on behalf of SEMAD (holding company of the Moulin family) and financed by BNP Paribas for all of the outstanding share capital of Galeries Lafayette.
Acting together in concert, the founding Moulin and Meyer families have been the controlling shareholders of the Galeries Lafayette Group until now. The Meyer family has now decided to dispose of its interest in the Galeries Lafayette Group and BNP Paribas, the group's historical partner, has acquired the Meyer family's interest to further support the Moulin family. Following the constitution of a new concert in respect of approximately 60% of the group's share capital, SEMAD (a holding company majority owned by the Moulin family) filed a public tender offer for the outstanding share capital of Galeries Lafayette at a price of euros 235 per share. Financing of the offer will be provided by BNP Paribas.
The terms on which the Moulin family will acquire control of Galeries Lafayette are as follows:
- Contribution by the Moulin family and BNP Paribas of their shareholding in the Galeries Lafayette Group to SEMAD, a holding company majority owned by the Moulin family;
- Filing of a public tender offer by SEMAD and BNP Paribas for the outstanding share capital of Galeries Lafayette; and
- The relationship between BNP Paribas and the Moulin family as shareholders of SEMAD will be governed by a shareholders' agreement. This will include the terms on which BNP Paribas will be provided with liquidity for its investment, the intention being for BNP Paribas to exit from SEMAD's share capital over time.
The offer price of euros 235 per Galeries Lafayette share is attractive for Galeries Lafayette Group's shareholders and represents a premium of 7.2% over the one-month weighted average share price as at 24 March 2005 and a premium of 41.1% over the weighted average share price in the month prior to 14 December 2004, the day prior to the declaration of an acquisition of more than 10% of the share capital of the Galeries Lafayette Group by Crédit Mutuel.
Assuming an acceptance level of 100%, the offer to acquire the minority shareholders of Galeries Lafayette will be financed by senior and subordinated SEMAD debt for a total amount of euros 1.585 billion. Following the offer, BNP Paribas will hold an equity stake amounting to euros 585 million.
2. Galeries Lafayette to pursue its strategy across its three businesses (department stores, City-marchés and consumer credit services)
This agreement will reinforce the group's development strategy in its three businesses. In its department store business, which had a turnover of euros 2.5 billion in 2004, the group will continue to roll out new initiatives (such as Lafayette Maison and Lafayette V.O…), and open flagship stores outside Paris at the same time as maintaining its operating profitability targets by 2006. For City-marchés (Monoprix), which had a turnover of euros 3.8 billion in 2004, the group intends to continue to develop its presence in city centres through innovative products and initiatives (Monop').
3. An ambitious industrial project in consumer credit in France and Europe through the joint control of Cofinoga by the Galeries Lafayette Group and Cetelem.
Prior to the transactions, BNP Paribas held an economic interest of 49% in Cofinoga principally through its subsidiary Cetelem which should see its interest increase to 50% of Cofinoga's share capital following the proposed transactions, enabling it to control Cofinoga jointly with the Galeries Lafayette Group.
Cofinoga benefits from a very successful pan-European platform and clear competitive advantages. Number 3 consumer credit specialist in France with a net banking income (NBI) of euros 878 million in 2004 and euros 10 billion of managed receivables, Cofinoga has developed over the past 30 years a franchise and expertise in financial services (private label cards, traditional personal loans, direct and revolving credits), and non-financial services (loyalty programs, CRM) and enjoys highly successful partnerships (Banque Casino, Petrofigaz). The Cofinoga card is accepted in 25,000 consumer outlets across more than 80 brands. More than 40% of Cofinoga's business is carried out abroad thanks to its European presence covering the Netherlands, Belgium, the UK, Poland and Southern Europe. Cofinoga enjoys a dynamic growth profile with an increase in NBI of over 8% in 2004.
The agreement provides for the implementation of an industrial project based on three key principles:
1. Maintaining Cofinoga's commercial autonomy, given the complementary nature of the product offering. Cofinoga will be positioned separately from Cetelem, being notably the sole supplier to the Galeries Lafayette Group's brands. It will be the preferred vehicle for banking and insurance partnerships as well as for the development of Northern European operations.
2. Realising cost synergies between platforms increasing the profitability of Cofinoga and Cetelem. Cost synergies relate to funding costs (application of BNP Paribas' refinancing margin), to certain operating costs in France and internationally and to the cost of risk (assessment and scoring tool sharing).
3. Realising revenue synergies and develop new activities. These synergies will be derived from cross-selling of protection products on Cofinoga's receivables, and from the increase in sales of insurance products to its customers.
4. A value enhancing project for all parties
Galeries Lafayette is an international retail and financial services group with recognised know-how, highly skilled employees and quality assets. The consolidation of the family control of the Galeries Lafayette Group will enable it to implement a determined development strategy, which will be value-enhancing for shareholders and offer favourable perspectives to employees.
BNP Paribas, the European leader in the consumer credit sector, was able to seize this unique opportunity to strengthen its position in the sector made available by the historical partnership between Cetelem and Cofinoga and by the reorganisation of the shareholder structure of Galeries Lafayette.
The transaction will have an immediately accretive impact on BNP Paribas' net earnings per share.
For SEMAD, Phillipe Houzé declared: "One of the key values of our group has always been its family rooting. At a decisive moment in its history, an optimal solution has been found with the full backing of the two families and in partnership with BNP Paribas that will allow the group to pursue the development of all of its businesses."
For BNP Paribas, Baudoin Prot added: “The partnership between BNP Paribas and the Galeries Lafayette Group is based on a long standing relationship. Today marks a new strategic phase for BNP Paribas and the Moulin family. It guarantees the future of the Galeries Lafayette Group and the implementation of an ambitious industrial project for Cofinoga, which will be jointly controlled with Cetelem”.
SEMAD is being advised for this transaction by Bucéphale Finance and the BNP Paribas group is being advised by BNP Paribas Corporate Finance and Goldman Sachs Paris Inc & Cie.
A press conference will be held on
Tuesday 29 March 2005 at 10 a.m. CET
Galeries Lafayette – Salon Opéra (7th floor)
Mogador entrance (corner of boulevard Haussmann and rue de Mogador)
______________________________________
SOCIETE ANONYME DES GALERIES LAFAYETTE
SA with a Management Board and Supervisory Board
Share capital: euros 26,762,290
Registered office: 40 Bld Haussmann- PARIS 75009
542 094 065 RCS PARIS
A meeting of the Supervisory Board of the Société Anonyme des Galeries Lafayette (SAGL) was held at 8 p.m. on 28 March 2005. It was informed of:
1) the proposed acquisition by BNP Paribas of 3,947,317 shares representing 29.5 % of the share capital of the Company held by the Meyer family at the price of euros 235 per share, 2004 dividend attached;
2) following this acquisition, the proposed filing of a joint public tender offer by BNP Paribas and the Moulin family for the shares of SAGL that they do not hold at the same price of euros 235 per share, 2004 dividend attached; and
3) the principles of an industrial partnership SAGL and Laser/Cofinoga which BNP Paribas and the Moulin family intend to jointly implement to ensure the development of the group's three businesses: department stores, Monoprix and consumer credit and loyalty program services.
The members of the Supervisory Board present at the meeting and able to vote, unanimously responded very positively to this transaction project as a concerted and friendly proposal which they consider able to ensure the durability and development of the group. The price at which the offer will be made will allow those shareholders who wish to sell their shares to do so on very satisfactory terms.