Deutsche Euroshop Newsroom

Ad hoc Disclosure

09.11.2005

Deutsche EuroShop AG resolves capital increase to finance additional growth and lifts 2005 forecasts after strong nine-month results

Hamburg, 9 November 2005 – Deutsche EuroShop AG resolved today to increase its share capital against cash contributions by up to 10%. The new shares are to be placed with institutional investors in the course of a private placement in Germany, the rest of Europe and the USA in accordance with Rule 144A; shareholders' pre-emptive rights will be disapplied. The share capital is to be increased from the current figure of Euro 20,000,000.00 by up to Euro 1,999,998.72 to up to Euro 21,999,998.72 by issuing up to 1,562,499 new shares.

 

Support for the transaction, which will be implemented using an accelerated bookbuilding process, is being provided by WestLB AG (lead manager and sole bookrunner) and Berenberg Bank (co-manager). WestLB AG has concluded a securities lending agreement with an existing shareholder so as to be able to deliver the shares to the new shareholders at short notice.

 

The issue proceeds from the capital increase are to be used to finance shopping center investments with a total volume of up to Euro 210 million that have already been implemented in, or are planned for, 2005. The Company will spend over Euro 20 million at the end of 2005 to increase its interest in the Main-Taunus-Zentrum to 43.1% and its interests in the Rhein-Neckar-Zentrum and Center Shopping Etrembières to 99.8%. Today, Deutsche EuroShop acquired 94.9% of the shares in the Rathaus-Center in Dessau, with effect from 1 January 2006, for more than Euro 100 million. In addition, a further investment with a volume of approx. Euro 80 million will be made in Germany before the end of 2005.

 

Deutsche EuroShop generated EBIT of Euro 42.9 million in the first nine months of 2005 (prior-year period: Euro 39.7 million). Consolidated net profit for the period, at Euro 13.7 million, was down 9% on the prior-year period (Euro 14.9 million), but up 41% after adjustment for currency effects and extraordinary factors. These results have led the Executive Board to increase its annual forecasts and dividend recommendation for 2005.

 

According to the revised projections, revenue will increase to Euro 71-72 million (previously Euro 68-72 million). Earnings before interest and taxes (EBIT) are scheduled to rise to Euro 56-58 million after adjustment for currency effects (planning to date: Euro 53-56 million). The forecast for the currency-adjusted profit from ordinary activities (EBT) before property revaluations has been lifted from Euro 28-30 million to Euro 30-32 million.

 

The Executive Board expects that a distributable free cash flow of approx. Euro 32.9 million can be generated in 2005. From today's perspective, an increase in the dividend for fiscal year 2005 from Euro 1.92 to Euro 2.00 per share will be recommended to the Annual General Meeting.

 

The full quarterly report and details of the acquisition of the Rathaus-Center in Dessau are available under http://www.deutsche-euroshop.de.

 

THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF AN OFFER OR SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION, INCLUDING GERMANY. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR AN EXEMPTION FROM REGISTRATION. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE SO REGISTERED AND WILL NOT BE OFFERED OR SOLD TO THE PUBLIC IN THE UNITED STATES OR ANY OTHER JURISDICTION.

 

This communication is for distribution only to and is directed only at persons falling within Arti-cle 19 or Article 49 of The Financial Services and Markets Act 2000 (Financial Promotion) Or-der as persons having professional experience in matters relating to investments or meeting the asset tests set out in Article 49 and to persons to whom it may otherwise lawfully be passed on (all such persons together being referred to as "relevant persons"). This document must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons.

 

Any investment decision to buy securities in the placing must be made solely on the basis of publicly available information, which has not been independently verified by the Company, WestLB AG or any other manager.

 

The distribution of this announcement and the offering or sale of the securities in certain juris-dictions may be restricted by law. No action has been taken by the Company or the Managers or any of their respective affiliates that would permit an offering of the securities or possession or distribution of this announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and the Managers to in-form themselves about and to observe any such restrictions.

 

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, OR JAPAN.

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