GIC, Temasek each to pay $640m for travel retailer's shares

BIG BUY: A duty-free section of the international airport in Hambantota, Sri Lanka. Dufry plans to raise around 3.6 billion euros for its takeover of Italy's World Duty Free.


    Mar 31, 2015

    GIC, Temasek each to pay $640m for travel retailer's shares


    GIC, investment firm Temasek Holdings and the Qatar Investment Authority have each committed to buying up to 450 million Swiss francs (S$640 million) worth of shares to be issued by Swiss travel retailer Dufry.

    Dufry plans to raise around 3.6 billion euros (S$5.4 billion) through a mixture of debt and equity for its planned takeover of Italy's World Duty Free.

    The deal will cement Dufry's position as the world's leading travel retailer, creating a combined group with a market share of 25 per cent and projected annual sales of US$9 billion (S$12 billion).

    To finance the purchase, Basel-based Dufry expects to raise at least 2.1 billion euros through a rights issue of new stock and up to 1.5 billion euros via long-term debt instruments, the Swiss company said in a statement yesterday.

    Dufry expects to detail the exact terms of the rights issue before a general shareholder meeting, to be held by May 15, to approve the equity financing.

    Total retail spending at airports around the world is expected to almost double to US$59 billion in 2019 from US$36.8 billion last year, analysts predict, driven by rapid growth in Asia, where more than 350 new airports are set to be built in the next eight years.

    Edizione, the holding company owned by the Benetton family that controls World Duty Free, agreed to sell its 50.1 per cent stake to Dufry for 10.25 euros per share, valuing the group at just under 3.6 billion euros including debt, which stood at 970 million euros, Edizione said on Saturday.

    After purchasing the stake, Dufry said it would make a mandatory bid for the remaining shares.

    Dufry bought Nuance Group for US$1.7 billion last year.