On 22 June 2007, an agreement was reached between F-Capital ehf. (a wholly
owned subsidiary of Baugur Group hf.), Kaupthing Bank hf., Gnupur
fjarfestingafelag hf., Kevin Stanford, Karen Millen, The Millen Life Interest
Settlement, Don M Limited, Tessera Holding ehf. and certain members of Mosaic
Fashions hf.'s management team - being Derek John Lovelock, Richard Spencer
Glanville, Margaret Eve Lustman, John Egan, Sharon O'Connor and Hannah Russell
- (hereinafter collectively referred to as the “Consortium”) concerning the
control and operation of Mosaic Fashions hf. The Consortium currently
collectively owns 64.4% of the issued share capital of Mosaic Fashions hf.
Pursuant to Article 37 of Act No. 33/2003 on Securities Transactions
(hereinafter referred to as the “Act”) the agreement reached by the Consortium
has resulted in the obligation on the part of the Consortium to make a
mandatory takeover bid to the shareholders of Mosaic Fashions hf. who do not
form part of the Consortium to purchase the shares in Mosaic Fashions hf. held
by such shareholders. Under the provisions of Chapters VI and VII of the Act
the Consortium will make a mandatory takeover bid based on terms and conditions
to be set out in an official offer document which will be sent to all
shareholders in due course and within the statutory four week period.
The offer price is ISK 17.5 in cash for each share in Mosaic Fashions hf. to be
acquired free from any pledges and encumbrances. Based on Mosaic Fashions
hf.'s share price on and prior to 3 May 2007 being the day before the
announcement by Mosaic Fashions hf. that it had been notified that talks had
commenced between Baugur Group hf. and other parties relating to a potential
cash offer for the issued share capital of Mosaic Fashions hf., the offer price
represents a premium of approximately:
• 7.4% to the closing price of ISK 16.3 on 3 May 2007;
• 11.1% to the average closing price over the six months up to and including 3
May 2007, which was ISK 15.8; and
• 12.0% to the average closing price over the three months up to and including
3 May 2007, which was ISK 15.6.
The offer also represents:
• an EV/EBITDA multiple of 9.3x pro-forma EBITDA for the financial year ending
in January 2007*.
• an EV/EBITDA multiple of 8.1x pro-forma EBITDA for the financial year ending
in January 2006*.
(*All calculations assume an ISK:GBP exchange rate of 123.5:1)
The offer price is above the highest price paid by the Consortium or any of its
concert parties for shares acquired in Mosaic Fashions hf. during the six
months prior to this announcement.
Commenting on the offer announcement, Gunnar Sigurdsson, CEO of Baugur Group
hf. said:
“We believe that the offer price, which is 28.7% above the IPO price two years
ago, represents excellent value for Mosaic Fashions' shareholders. We also
believe that it is in the best interests of the company for it to be taken
private so that it is best positioned for the next stage of its development. We
look forward to working with the management team and our co-investors in
helping grow the business over the coming years.”
For further information on this announcement please contact:
Kaupthing Bank - Investment Banking (Thorolfur Jonsson on +354-444-6000)
Gavin Anderson (Fergus Wylie/Clotilde Gros on +44 207 554 1400)