PPR today confirms that it is in exclusive talks with BNP Paribas over the sale of a 90% equity interest in Facet for 869 million euros (which corresponds to 965 million euros for 100%) and announced the first phase of its pullout of its Credit and Financial Services activity. For PPR, this deal will strengthen its capacity to pursue its expansion and enable it to enhance its financial structure.
For BNP Paribas, this deal is in connection with its business expansion plan which makes consumer lending one of the Group's strategic areas of focus. It will enable Cetelem to consolidate its N°1 position in consumer lending in France and grow its market share to 30% of revolving credit.
Facet has for the past 15 years successfully managed the consumer lending business of Conforama (PPR Group). With a portfolio of over 2 million store cards with a base in the order of 9 million Conforama customers, Facet's business represents 1.2 billion euros in outstanding loans, 20% of the outstanding loans managed by Finaref in PPR's Credit and Financial Services Division. Cetelem has provided technical support services for the management of Facet's outstanding loans since it was founded.
The valuation of Facet chosen for a possible transaction is based on a long-term business relationship involving mutual contractual commitments. Furthermore, Conforama would retain a 10% minority interest in Facet, thereby enabling both to benefit from the strengths of a strategic long-term alliance.
Serge Weinberg, Chairman of the PPR Group's Management Board, stated:
"Following these talks, our deal with BNP Paribas will show our ability to establish quality partnerships within our Credit and Financial Services Division and highlight, through the valuation, the excellent quality of our assets. This deal is part of our intention to ultimately sell the credit and financial services business. It is consistent with our will to maintain a selective relationship with our financial partners whilst retaining control over customer interfacing, marketing strategy and customer databases."
Michel Pébereau, BNP Paribas' CEO, said:
"This acquisition has great strategic value for Cetelem, BNP Paribas' spearhead in the consumer lending business. Facet is an excellent asset with high profitability and substantial growth prospects. This acquisition will not only enable Cetelem to consolidate its N°1 position in France but also to be part of resulting opportunities in the financial services market and the European expansion of the Conforama Group."
For the purposes of this transaction, BNP Paribas and Cetelem are being advised by BNP Paribas Corporate Finance while PPR is being advised by Rothschild and Lazard.
About Finaref :
Finaref, a subsidiary of the Pinault-Printemps-Redoute Group, offers a full range of financial lending, insurance and savings services to individuals. Finaref is the leader in store cards in France with a portfolio of 8.5 million cards (Printemps, Fnac, Conforama, the Kangourou card and the specialized brands within the Redcats Group). Its outstanding loans reached 6.3 billion euros in 2001 and it made 4.1 billion euros in new loans. Finaref's expansion relies on a multi-channel retail distribution which combines direct sales (call centres and e-commerce sites) and a network of over 400 points of sales throughout the Pinault-Printemps-Redoute Group.
About Cetelem :
Cetelem, a subsidiary of BNP Paribas, is N°1 in consumer lending in France and in Europe with 25.3 billion euros in assets under management as at 30 June 2002, of which 17.2 billion are managed in France and 8.1 outside the country. For 50 years, Cetelem has been the preferred choice of the leading national retailers as they have grown their businesses.
Cetelem is also the preferred choice of banking institutions and insurance companies to which it brings its expertise in lending and credit. With a presence in 20 countries and with over 50% of its employees working outside France, Cetelem is implementing a global business expansion strategy.