CDON Group announces c. SEK 650m rights issue, launches Qliro Payment Solution, strengthens balance sheet and changes name to Qliro Group

This press release may not be announced, published or distributed, in whole or
in part, directly or indirectly, in the United States, Australia, Canada, Hong
Kong, Japan or any other country where such publication or distribution would
violate applicable laws or rules or would require additional documents to be
prepared or registered or require any other actions to be taken, in addition to
the requirements under Swedish law. This press release is not a prospectus but
an announcement of the intended rights issue in CDON Group. For further
information, please refer to “Important notice” in this press release.

This press release has been published in Swedish and English. In the event of
any discrepancy in content between Swedish original text and the English
translation, the Swedish original shall prevail.

  · CDON Group AB/Qliro Group AB (“CDON/Qliro Group”) announces a rights issue
to existing shareholders of approximately SEK 650m[1] (http://file://se-ma
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  · The proceeds will be used to fund the continued launch of the payment
service Qliro Payment Solution (approximately SEK 300m), growth plans in the
subsidiaries, especially in Nelly (approximately SEK 100m), and an early
redemption of the company's convertible bond (approximately SEK 250m)
  · Qliro Payment Solution to be launched on the Swedish websites of Nelly,
CDON.com and Lekmer during the fourth quarter of 2014. The financial target for
Qliro Financial Services (the new segment in which Qliro Payment Solution is
included) is to contribute with approximately SEK 100m to group EBT in 2018
  · CDON/Qliro Group has a strong track record in developing and building Nordic
e-commerce companies. As an example Nelly has grown from having revenues of SEK
14m in 2007 to more than SEK 1,000m during the last twelve month period. Nelly
shows strong profitability in mature markets, such as Sweden, and part of the
issue proceeds is intended to be used for the continued expansion
  · CDON Group changes name to Qliro Group
  · CDON/Qliro Group increases transparency by reporting the largest
subsidiaries as new segments and the financial targets are changed to targets
per segment, which will substitute the previous financial targets on group level
  · The rights issue is 100 percent guaranteed by a subscription undertaking and
guarantee from Investment AB Kinnevik (“Kinnevik”)
  · The rights issue is subject to approval by the Extraordinary General Meeting
on 21 November 2014 and provided that such approval is given, the subscription
period will run from 28 November to 12 December 2014. Notice of the
Extraordinary General Meeting will be available on the company’s website,
www.cdongroup com

CDON/Qliro Group’s CEO Paul Fischbein comments:

“Now our new journey as Qliro Group begins. A fully underwritten rights issue of
approximately SEK 650m will finance the launch of Qliro Payment Solution and its
loan book, strengthen the balance sheet through redemption of the convertible
bond and enable growth plans in our subsidiaries, especially in Nelly. Since
2010, we have doubled our sales and built companies such as Nelly and
Gymgrossisten from Swedish entrepreneurial ventures into Nordic market leaders.
We now move from pilot testing to full operation of our own payment service
Qliro Payment Solution, adding yet another key component to our ability to build
leading e-commerce companies. During the fourth quarter Qliro Payment Solution
will be implemented on the Swedish sites of Nelly, Lekmer and CDON.com and
during 2015 we plan a launch in Norway and Finland, as well as for
Gymgrossisten. Nelly and Gymgrossisten are already profitable in the home
markets and will continue their growth journey through, for example, additional
investments in logistics and expansion. Our larger subsidiaries will operate
more independently with, among other things, the possibility to recruit external
board members and advisors to secure the right company specific competencies.

To mark the step into a new and exciting phase, we have decided to change our
company name to Qliro Group.“

Background and reasons for the rights issue

Strong track in identifying, developing and building Nordic e-commerce companies

CDON/Qliro Group has undergone major changes since CDON.com was founded in 1999.
The company has grown substantially through international expansion, broadening
the product range and launching and acquiring new e-commerce companies. Today,
CDON/Qliro Group owns more than ten brands and its turnover has doubled from SEK
2,200m in 2010 to SEK 4,400m in 2013. Nelly and Gymgrossisten are clear examples
of how CDON/Qliro Group has developed and built companies. Nelly had revenues of
SEK 14m in 2007 and revenues of SEK 1,059m during the last twelve months period.
Nelly’s revenues increased by 30% during the third quarter 2014 and Nelly Sweden
had an EBIT-margin of 5% over the same period. Nelly has been launched on a
number of markets over the last years and increased the proportion of private
labels, which now represents approximately 30% of sales. Gymgrossisten had
revenues of SEK 200m when it was acquired in 2008, compared to revenues of SEK
806m during the last twelve month period[2] (http://file://se-ma
-file01/cdongroupusers/fredbeng183/Desktop/Q3%20EGM/Kl%200759%20F%C3%B6retr%C3%A
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desemission/Project%20Friday%20-%20Press%20release%20-%20Draft%202014-10
-21%202000%20(English).docx#_ftn2). During the last nine month period
Gymgrossisten had an EBIT-margin of 9% in the Nordics and the business is cash
flow positive. Gymgrossisten has successfully launched several private labels,
e.g. Star Nutrition and Chained Nutrition.

In recent years, CDON/Qliro Group has handled a number of challenges which have
strengthened the company's position. CDON/Qliro Group has reported positive
operating results and profitable growth during the last twelve months
period1 and has launched a number of initiatives, for example implemented
separate management teams in the subsidiaries, launched CDON Marketplace and
developed Qliro Payment Solution.

CDON/Qliro Group is ready to continue the growth journey and adjust its
operations to be able to support the subsidiaries specific needs. The Board
composition/Advisory Boards of the individual subsidiaries will be reviewed to
ensure that the right business specific competence is available to each company.
External directors and advisors with relevant experience for each of the
companies will be appointed.

CDON/Qliro Group launches Qliro Payment Solution

CDON/Qliro Group has internally developed a new payment service, Qliro Payment
Solution. Since June and September 2014, the service has been tested on
Members.se and Tretti.se. The tests have shown good results and CDON/Qliro Group
has chosen to broaden the launch further. In late 2014, Qliro Payment Solution
will be launched on the Swedish sites of Nelly, CDON.com and Lekmer, and in 2015
on Gymgrossisten. CDON/Qliro Group's goal is to become a credit market company
in 2015 and then launch the payment solution in Finland and Norway.

Approximately SEK 300m of the issue proceeds will be used to enable the
expansion of Qliro Payment Solution, specifically through financing consumer
lending in connection with the sale of products ("loan book"), which is built up
gradually, but also for additional investments in technology. In addition to the
part of the loan book that is financed with the issue proceeds, Qliro Payment
Solution has external bank facilities. The payment service Qliro Payment
Solution will be reported in the new segment Qliro Financial Services from the
fourth quarter of 2014. The large volumes in the fourth quarter, during which
the launch of Qliro Payment Solution takes place, lead to that the segment Qliro
Financial Services is expected to report a negative operating result of about
SEK 10-15m in the fourth quarter 2014.

Increased focus on growth and expansion of existing subsidiaries

CDON/Qliro Group's business concept is to identify, build and grow Nordic e
-commerce companies. Approximately SEK 100m of the issue proceeds is intended to
be used for growth and expansion of the subsidiaries, especially Nelly.
Approximately SEK 50m of the proceeds is intended to be used for investments in
Nelly’s logistics- and system solutions.

Strengthens the company's financial position and increases the company’s
financial flexibility

CDON/Qliro Group and Modern Times Group AB (“MTG”) have reached an agreement,
subject to the completion of the rights issue, on redemption of CDON/Qliro
Group’s convertible bond that MTG holds. Approximately SEK 250m of the proceeds
will be used in December 2014 to redeem the convertible bond, which expires in
December 2015. The agreed upon redemption price implies interest expense savings
of approximately SEK 7m to CDON/Qliro Group in 2015. Following the rights issue,
CDON/Qliro Group will hold a net cash position and together with the external
bank facilities related to Qliro Payment Solution, CDON/Qliro Group hence has a
long-term and strengthened financial position, which in turn increases financial
flexibility and supports the future growth of the company.

Increased transparency in the financial reporting of the largest subsidiaries

CDON/Qliro Group will increase its transparency by reporting the largest
subsidiaries as new segments as well as disclosing more financial information
per segment. CDON/Qliro Group has implemented specific financial targets per
segment which will substitute the previous targets on group level. From the
fourth quarter of 2014, Qliro Financial Services will be reported as a separate
segment.

[image]

E-commerce in the Nordics has generally grown by approximately 15% per year
during the last years. CDON/Qliro Group’s long-term revenue growth target is a
growth that is in line with or above the market for each segment. Assuming that
the subsidiaries deliver sales volumes according to their business plans, the
financial target for Qliro Financial Service is to generate a positive result in
2016 and contribute with approximately an additional SEK 100m to group EBT in
2018.

CDON Group changes name to Qliro Group

The Board has proposed to change the company name from CDON Group AB to Qliro
Group AB and the name change emphasises that the company now takes the next step
in its development. The name change is to be approved at the Extraordinary
General Meeting.

The rights issue

On 21 October 2014, the Board of CDON/Qliro Group has resolved on a rights issue
of approximately SEK 650m with preferential rights to existing shareholders. The
rights issue is subject to the subsequent approval by the Extraordinary General
Meeting.

The subscription period is expected to run from and including 28 November 2014
up to and including 12 December 2014, or such later date as decided by the
Board.

The increase of share capital, number of shares issued, the number of
subscription rights that each share shall entitle to, number of subscription
rights required to subscribe for a new share and the subscription price will be
determined by the Board and published no later than 18 November 2014.

The Extraordinary General Meeting is planned be held on 21 November 2014 10:00am
CET at the offices of Advokatfirman Cederquist at Hovslagargatan 3 in Stockholm.
The notice of the Extraordinary General Meeting will be published in a separate
press release and is available on CDON/Qliro Group website www.cdongroup.com.

Kinnevik, representing approximately 25 percent of the capital and votes in
CDON/Qliro Group, has through a subscription commitment undertaken to subscribe
for shares in the rights issue corresponding to its shareholding in CDON/Qliro
Group. In addition, Kinnevik has through a guarantee undertaking committed to
subscribe for the shares in the rights issue which potentially have not been
subscribed for with or without subscription rights.

Preliminary timetable for the rights issue

18 November 2014, Complete terms and conditions of the rights issue are
announced

21 November 2014, Extraordinary General Meeting resolves on approval of the
Board's rights issue resolution

24 November 2014, First day of trading in the CDON/Qliro Group share excluding
subscription rights

25 November 2014, Record date for allotment of subscription rights

27 November 2014, Estimated date for publication of prospectus

28 November - 10 December 2014, Trading in subscription rights

28 November -  12 December 2014, Subscription period

18 December 2014, Announcement of the preliminary outcome of the rights issue

30 December 2014, Estimated date of announcement of the final outcome of the
rights issue

Financial and legal advisers

SEB Corporate Finance is acting as financial adviser to CDON/Qliro Group in the
rights issue and Cederquist is acting as legal adviser to CDON/Qliro Group.

Telephone conference

A telephone conference will be held on 22 October 2014 at 10:00am Stockholm
time, and 09:00am London time. Paul Fischbein, CEO for CDON Group, and Nicolas
Adlercreutz, CFO, will participate in the telephone conference.

To participate in the telephone conference, please call:
Sweden: +46 (0) 5065 3938
London: +44 (0) 20 3427 1914

The pin that is needed to be able to participate in the call is 9328708.
To listen on the telephone conference online, visit www.cdongroup.com.

For further information, please visit cdongroup.com or contact:

Paul Fischbein, CEO
Tel: +46 (0) 10 703 20 00

Questions from investors and research analysts:
Nicolas Adlercreutz, CFO
Tel:+46 (0) 70 587 44 88

Questions from press:
Fredrik Bengtsson, investor relations
Tel: +46 (0) 700 80 75 04
E-mail: press@cdongroup.com, ir@cdongroup.com

The information in this announcement is such that CDON Group AB (publ) is
required to disclose under the Securities Markets Act. This information was
released for publication at 08:00am CET on 22 October 2014.

About CDON Group

CDON Group is the leading e-commerce group in the Nordic region. Since the start
in 1999, the Group has expanded and broadened its product portfolio and is now a
leading e‐commerce player in consumer goods and lifestyle products through
CDON.com, Lekmer, Nelly (Nelly.com, NLYman.com, Members.com), Gymgrossisten
(Gymgrossisten.com/Gymsector.com, Bodystore.com, Milebreaker.com) and Tretti.
The group also comprises the payment solution Qliro. In 2013, the group
generated 4.5 billion SEK in revenue. CDON Group’s shares are listed on Nasdaq
Stockholm’s Mid-cap list under short name “CDON”.

Important information

This press release does not contain or constitute an invitation or an offer to
acquire, sell, subscribe for or otherwise trade in shares, subscription rights
or other securities in CDON Group. Invitation to the persons concerned to
subscribe for shares in CDON Group will only be made through the prospectus that
CDON Group intends to publish at CDON Group’s website, following the approval
and registration by the Swedish Financial Supervisory Authority (Sw.
Finansinspektionen). The prospectus will contain, among other things, financial
statements as well as information regarding CDON Group's Board of Directors.
This press release has not been approved by any regulatory authority and is not
a prospectus, accordingly investors should not subscribe for or purchase any
securities referred to in this press release except on the basis of information
provided in the prospectus to be published by CDON Group.

In certain jurisdictions, the publication or distribution of this press release
may be subject to restrictions according to law and persons in those
jurisdictions where this press release has been published or distributed should
inform themselves about and abide by such restrictions.

This press release is not directed at persons located in the United States
(including its territories and possessions, any state of the United States and
the District of Columbia) (the ("United States"), Canada, Australia, Hong Kong,
Japan or in any other country where the offer or sale of the subscription
rights, interim shares (Sw. betalda tecknade aktier) or new shares is not
permitted. This press release may not be announced, published or distributed,
directly or indirectly, in or into the United States, Canada, Australia, Hong
Kong, Japan or any other country where such action is wholly or partially
subject to legal restrictions or where such action would require additional
prospectuses, other offer documentation, registrations or other actions in
addition to what follows from Swedish law. Nor may the information in this press
release be forwarded, reproduced or disclosed in such a manner that contravenes
such restrictions or would require such additional prospectuses, other offer
documentation, registrations or other actions. Failure to comply with this
instruction may result in a violation of the United States Securities Act of
1933, as amended (the "Securities Act") or laws applicable in other
jurisdictions.

In addition, if and to the extent that this press release is communicated in any
European Economic Area member state that has implemented Directive 2003/71/EC
(together with any applicable implementing measures, including Directive
2010/73/EC, in any member state, the "Prospectus Directive"), this press release
is only addressed to and directed at persons in that member state who are
"qualified investors" within the meaning of the Prospectus Directive and must
not be acted on or relied on by other persons in that member state. This press
release does not constitute a prospectus within the meaning of the Prospectus
Directive or an offer to the public.

In the United Kingdom, this press release is being distributed only to, and is
directed only at (i) persons who have professional experience in matters
relating to investments falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the
"Financial Promotion Order"), (ii) persons falling within Article 49(2)(a) to
(d) (high net worth companies, unincorporated associations, etc.) of the
Financial Promotion Order, or (iii) other persons to whom it may otherwise be
lawfully communicated (all such persons together being referred to as "relevant
persons"). This press release is directed only at relevant persons and must not
be acted on or relied on by anyone who is not a relevant person.

No subscription rights, interim shares or new shares have been or will be
registered under the Securities Act, or with any other securities regulatory
authority of any state or other jurisdiction of the United States and no
subscription rights, interim shares or new shares may be offered, sold, resold,
transferred, delivered or distributed, directly or indirectly, into or within
the United States or on account of such persons other than pursuant to an
exemption from, or in a transaction not subject to the registration requirements
of the Securities Act, and in compliance with any applicable securities laws of
any state or jurisdiction of the United States. There are no plans to register
any securities mentioned in this press release in the United States or make an
offer to the public in the United States.

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[1] (http://file://se-ma
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desemission/Project%20Friday%20-%20Press%20release%20-%20Draft%202014-10
-21%202000%20(English).docx#_ftnref1) Before transaction cost, which will be
deducted from the issue proceeds allocated to Qliro Payment Solution and growth
in subsidiaries

[2] (http://file://se-ma
-file01/cdongroupusers/fredbeng183/Desktop/Q3%20EGM/Kl%200759%20F%C3%B6retr%C3%A
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-21%202000%20(English).docx#_ftnref2) 1 October 2013 to 30 September 2014