The board of directors of Companhia Brasileira de Distribuição (GPA) unanimously rejected the offer presented by Jaime Gilinski to acquire 51 percent of the shares of Success Stores.
ensures that”the price offered does not respond to the appropriate parameters of financial reason for an operation aimed at a controlling stake and, therefore, does not respond to the best interest of GPA and its shareholders”.
(Read also: These are the figures that Almacenes Éxito moves, which could change owners)
In addition, the board of directors states that the terms of the new offer, as presented, “do not provide enough elements to assure the Board of Directors of the binding nature of the new offer and the reasonable expectation of closing a transaction derived from it”.
The GPA board of directors ensures that, considering the level of advancement of segregation, a potential offer, to be considered, should meet the following minimum requirements:
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1. Financial consideration reflecting the acquisition of a controlling interest.
2. Definitive sales contractincluding the non-requirement of indemnity obligations to Éxito shareholders other than those strictly established by law.
3. Termination Fees that represents a reasonable percentage of the proposed price and that is deposited in custody to encourage participation in conversations that could justify the cancellation or modification of the Éxito spin-off in the event that, for whatever reason, a possible transaction does not materialize (generating delays in the Éxito spin-off process currently underway).
4. Presentation of proof of financing to the bidder for the total amount of the price to be offered for the payment of the number of Éxito shares to be acquired, issued by one or more top-level financial entities.
5. A clear transaction execution schedulein which all the steps, documents and approvals pertinent for the perfection of the transaction are detailed.
6. Pre-assessment of the nature of the potential antitrust review process and the schedule for the development of said review to which the transactions would be subject, if any, based on the Legal Opinion of a leading global or Colombian law firm.
7. Bidder Plan Guidelines for the development of Éxito’s business after the transaction, if perfected.
8. Commitment by GPA Support Option in any alternative that GPA may decide in relation to its remaining interest in Éxito, including the potential modification of the current terms of the business spin-off that leads to the delivery to GPA shareholders of part or all of the remaining interest in Éxito after the transaction; other alternatives for monetization by GPA of the remaining interest in Éxito, either before or after a potential new asset spin-off.
(Also read: Banker Jaime Gilinski raises his bid for control of Éxito supermarkets)
What was Jaime Gilinski’s proposal?
Faced with a first refusal, on July 19 banker Jaime Gilinski Bacal raised his stake to remain in control of the Éxito supermarket chain.
Gilinski, who in his first attempt offered 836 million dollars for Éxito, sent a letter to GPA offering $586.5 million in cash for a 51 percent stake in the retail chain.
The above represents a premium per share of more than 30 percent of the original offerwhich was done last month by 96.5 percent Success and which was rejected by the GPA board.
Faced with this second refusal, market sources assured EL TIEMPO that Jaime Gilinski would be willing to review and reformulate his proposalin order to insist on the acquisition of Almacenes Éxito.
