Singapore, India, Middle East, March 4, 2007: Major global real estate group Dubai-based Emaar Properties PJSC (“Emaar Properties”) and one of India's leading real estate developers, the MGF group led by Mr Shravan Gupta (“MGF” or “MGF Group”), through their joint venture company – Golden Ace Pte. Ltd. (the “Offeror”), announced a voluntary conditional cash offer (the “Offer”) by the Offeror for RSH Limited (“RSH”).
RSH is a leading pan-Asian marketer, distributor and retailer of sports, golf, active lifestyle and fashion products listed on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX”). The company has carved out, through three decades of achievement, a retail network encompassing more than 28 different retail concepts and incorporating over 430 free-standing stores and 570 shops-in-shop in 12 countries. RSH has established a strong presence in four broad categories of lifestyle products, namely sports, golf, active lifestyle and fashion. The company also has the exclusive retail rights to operate top fashion brand-names including Zara, Massimo Dutti, Mango, bebe, Pull and Bear, Ted Baker and Women’Secret in numerous territories.
With an offer price of S$1.05 per share valuing RSH at approximately S$370 million, the Offer is conditional upon the Offeror receiving acceptances, which together with the shares held by the Offeror and its concert parties, will give the Offeror and its concert parties a stake of more than 76.076 percent of RSH (the “Condition”).
Commenting on the Offer, Mr Hussain Al Qemzi, Vice Chairman of Emaar Properties said, “The economies of India, Middle East and Southeast Asia are booming, and in line with the economic growth, the retail sector presents substantial growth opportunities. Emaar Properties has embarked on a growth path through a two-pronged strategy of geographical expansion into diverse international markets and the development of new business segments, including retail, which is a strong component of that growth strategy. We have announced plans to establish, through our subsidiary Emaar Malls, an extensive infrastructure of over 150 malls across the Middle East and Indian sub-continent in the next few years. The Dubai Mall, the world’s largest mall, is the iconic flagship of Emaar Malls. We believe that with the acquisition of RSH, which is profitable and has a highly scalable distribution and retail business, we will be able to capitalise on the exciting growth prospects and be one step closer to achieving Emaar Properties’ Vision 2010 of becoming one of the most valuable companies in the world.”
The US$300 billion Indian retail market is expected to grow by 10 percent to reach US$427 billion by 2010, and by 2015, the total market value could reach US$637 billion . Retail sales across Asia Pacific are also expected to show continued growth at an average of 5 percent for the first half of 2007 . In the Middle East, it is predicted that the region’s retail industry is expected to reach US$500 billion by 2010 .
Mr Siddharth Gupta, Group Director of MGF added, “With operations in 12 countries in Asia Pacific and Middle East and exclusive distribution rights to over 60 world-renowned brand names, RSH will be an excellent strategic partner in our bid to kick-start our retail business. The world of fashion retail, which is a major thrust area for RSH, has a huge potential in India as the branded apparel industry is still in its infancy. We believe that RSH’s established retail network in the Indian subcontinent, Middle East and Southeast Asia and expertise in managing retail chains will be the catalyst that enable us to quickly gain a strong presence in the retail arena.”
“We are pleased that Mr Jagdev Singh Gill, currently the Chief Executive Officer of RSH, has agreed to stay with RSH as a non-executive adviser for a transitional period after the close of the Offer to ensure the immediate continuity of the business and business relationships of RSH post-Offer,” continued Mr Gupta. “Mr Gill has extensive experience and expertise in the retail industry and we are confident that with him as a non-executive adviser, the stability of RSH can be maintained.”
The Offeror is 30 percent owned by Emaar Retail LLC, a wholly-owned subsidiary of Emaar Malls Group LLC, which in turn is a wholly-owned subsidiary of Emaar Properties. The balance 70 percent is owned by Golden Focus Pte. Ltd., a wholly owned subsidiary of MGF Retail Private Limited, which is part of the MGF Group.
Mr Mohamed Ali Alabbar, Chairman of both Emaar Properties and RSH, who holds approximately 25.968 percent of RSH, has undertaken not to accept the Offer. Taking that into consideration, the Offeror has to-date received sufficient acceptance undertakings to fulfill the Condition. It is the present intention of the Offeror to maintain the listing status of RSH on the SGX.
The formal Offer Document will be dispatched to shareholders of RSH between 14 to 21 days from the date of the announcement of the Offer.
DBS Bank Ltd is the Financial Adviser and WongPartnership is the Legal Adviser for the Offer.
