JD SPORTS FASHION (LON:JD.) Recommended Cash Offer for each Footasylum Share 82.5 pence in cash

Commenting on the Offer, Peter Cowgill, Executive Chairman of JD, said: “We are pleased to make this Offer for Footasylum, which is very complementary to our existing businesses in the UK.

We believe that there will be significant operational and strategic benefits through the combination of the very experienced and knowledgeable management team at Footasylum and our own expertise.”

Commenting on the Offer, Barry Bown, Executive Chairman of Footasylum, said:

“The Footasylum Board has concluded that the Offer represents the best strategic option for Footasylum and its employees. It believes the Offer fairly reflects Footasylum’s current market position and prospects on a standalone basis and, as such, that Footasylum Shareholders should be given the opportunity to realise value from the Offer.”

Summary

· The boards of directors of JD Sports Fashion plc (JD) and Footasylum plc (Footasylum) are pleased to announce that they have reached agreement on the terms of a recommended cash offer for Footasylum by JD, pursuant to which JD will acquire the entire issued and to be issued ordinary share capital of Footasylum (other than the Footasylum Shares which JD already owns) (Offer). It is intended that the Offer will be implemented by means of a takeover offer under the Code and within the meaning given to that term in section 974 of the Companies Act.

· Under the terms of the Offer, Footasylum Shareholders will receive:

for each Footasylum Share 82.5 pence in cash

· The Offer Price represents a premium of approximately:

· 77.4 per cent. to the Closing Price of 46.5 pence per Footasylum Share on 15 March 2019 (being the last Business Day prior to the date of this Announcement);

· 184.5 per cent. to the Closing Price of 29.0 pence per Footasylum Share on 15 February 2019 (being the last Business Day prior to JD’s first acquisition of Footasylum Shares);

· 67.3 per cent. to the volume-weighted average Closing Price of 49.3 pence per Footasylum Share for the three months ended on 15 March 2019 (being the last Business Day prior to the date of this Announcement); and

· 41.0 per cent. to the volume-weighted average Closing Price of 58.5 pence per Footasylum Share for the 12 months ended on 15 March 2019 (being the last Business Day prior to the date of this Announcement).

· If, after the date of this Announcement, any dividend and/or other distribution and/or other return of capital is made or paid in respect of the Footasylum Shares, JD reserves the right to reduce the Offer Price by an amount per share which is equal to the amount of such dividend and/or distribution and/or return of capital so made or paid.

· The Offer values the entire issued and to be issued ordinary share capital of Footasylum at up to approximately £90.1 million on a fully diluted basis (subject to the extent to which Options are exercised).

· The cash consideration payable pursuant to the Offer will be financed from JD’s existing cash resources and facilities.

· JD believes that Footasylum is a well-established business with a strong reputation for lifestyle fashion and, with its offering targeted at a slightly older consumer to JD’s existing offering, it is complementary to JD. JD also believes that there will be significant operational and strategic benefits from a combination of the two businesses.

· JD believes that the Acquisition represents a compelling opportunity for Footasylum’s employees, management team, shareholders and other stakeholders, with Footasylum able to leverage JD’s greater scale with regard to sourcing, its well-established international infrastructure and its other commercial operations.

· JD expects the Enlarged Group to be able to take advantage of business opportunities which are not readily available to either JD or Footasylum on a standalone basis.

· The Footasylum Directors, who have been so advised by GCA Altium as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing its advice to the Footasylum Directors, GCA Altium has taken into account the commercial assessments of the Footasylum Directors. GCA Altium is providing independent financial advice to the Footasylum Directors for the purposes of Rule 3 of the Code.

· Accordingly, the Footasylum Directors intend to recommend unanimously that Footasylum Shareholders accept, or procure the acceptance of, the Offer (or, if (with the consent of Footasylum and the Panel) JD exercises its right to implement the Offer by way of a Scheme, vote, or procure votes, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting), as all the Footasylum Directors who hold Footasylum Shares (in a personal capacity or through related trusts or a nominee or nominees) and members of their immediate families have irrevocably undertaken to do, or procure to be done, in respect of their own beneficial holdings (and the beneficial holdings of members of their immediate families or related trusts or nominee(s)) of 65,845,799 Footasylum Shares, in aggregate, representing approximately 63.0 per cent. of the Footasylum Shares in issue on 15 March 2019 (being the last Business Day prior to the date of this Announcement).

· On 18 February 2019, JD acquired 19,579,964 Footasylum Shares at prices between 50 pence and 75 pence per Footasylum Share, representing approximately 18.7 per cent. of the Footasylum Shares in issue on 15 March 2019 (being the last Business Day prior to the date of this Announcement).

· JD has also received irrevocable undertakings to accept, or procure the acceptance of, the Offer (or, if (with the consent of Footasylum and the Panel) JD exercises its right to implement the Offer by way of a Scheme, vote, or procure votes, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting) from Footasylum Directors and members of the Family Concert Party in respect of 65,845,799 Footasylum Shares, in aggregate, representing approximately 63.0 per cent. of the Footasylum Shares in issue on 15 March 2019 (being the last Business Day prior to the date of this Announcement).

· JD has also received an irrevocable undertaking to accept, or procure the acceptance of, the Offer from Pentland in respect of 2,720,000 Footasylum Shares, representing approximately 2.6 per cent. of the Footasylum Shares in issue on 15 March 2019 (being the last Business Day prior to the date of this Announcement).

· Therefore, as at the time of this Announcement, and in addition to the 19,579,964 Footasylum Shares which it already holds (representing approximately 18.7 per cent. of the Footasylum Shares in issue on 15 March 2019 (being the last Business Day prior to the date of this Announcement), JD has received irrevocable undertakings to accept, or procure the acceptance of, the Offer (or, if (with the consent of Footasylum and the Panel) JD exercises its right to implement the Offer by way of a Scheme, but save in relation to the irrevocable undertaking received from Pentland, vote, or procure votes, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting) with respect to a total of 68,565,799 Footasylum Shares in aggregate, representing approximately 65.6 per cent. of the Footasylum Shares in issue on 15 March 2019 (being the last Business Day prior to the date of this Announcement) and 80.7 per cent. of the Footasylum Shares in issue on that date which are not already owned by JD.

· Full details of the irrevocable undertakings received by JD are set out in Appendix III to this Announcement.

· As at the close of business on 15 March 2019 (being the last Business Day prior to the date of this Announcement), JD and Pentland, which is the registered holder of approximately 57.47 per cent. of the issued share capital of JD, were the registered holders of, respectively, 19,579,964 Footasylum Shares and 2,720,000 Footasylum Shares. Those Footasylum Shares represent, respectively, 18.7 per cent. and 2.6 per cent. of the Footasylum Shares in issue at that date.

· JD is a specialist multi-channel retailer of fashionable branded sports and casual wear, combining globally recognised brands with a number of strong own brand labels. It has over 2,400 stores across a number of retail fascias in 18 countries and aims always to provide its customers with the latest products from leading brands. JD embraces the latest online and instore digital technology, providing it with a truly multichannel, international platform for future growth.

· Footasylum is a UK-based fashion retailer founded in 2005 focusing on the footwear and apparel market. It retails “on-trend” product ranges which are predominantly aimed at 16 to 24-year-old fashion-conscious customers and are sourced from an extensive stable of third party and own brands. These include well-known sports and casual footwear and apparel brands, as well as up-and-coming brands and own label products.

· The Offer will be conditional upon, amongst other things, valid acceptances being received in respect of Footasylum Shares which, together with any Footasylum Shares acquired by JD (whether pursuant to the Offer or otherwise), constitute not less than 90 per cent. in nominal value and voting rights of the Footasylum Shares to which the Offer relates. The Offer will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Offer Document.

· The Offer can only become unconditional in all respects if all Conditions to the Offer have been satisfied or, where applicable, waived. Subject to the satisfaction or, where applicable, waiver of the Conditions, it is expected that completion of the Offer will occur in April or May 2019.

· Full acceptance of the Offer will result in the payment by JD of up to approximately £74.0 million in cash to Footasylum Shareholders (and participants in the Footasylum Share Schemes (subject to the extent to which Options are exercised)).

· JD reserves the right, subject to the consent of Footasylum and the Panel, to effect the Offer by way of a Scheme.

· The Offer Document, containing further information about the Offer, will be published as soon as practicable and, in any event, other than with the consent of the Panel, within 28 days of this Announcement and will be made available on JD’s website at www.jdplc.com/investor-relations.aspx. Neither the content of any website referred to in this Announcement nor the content of any website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement.

 

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