TIDMTSCO
RNS Number : 4046F
Tesco PLC
09 March 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
9 March 2020
Tesco PLC
("Tesco" or the "Company")
TESCO AGREES TO SELL ITS BUSINESSES IN THAILAND AND
MALAYSIA;
SIGNIFICANT RETURN TO SHAREHOLDERS, SIMPLIFICATION AND FURTHER
DE-RISKING
Highlights:
-- Proposed sale of Tesco's businesses in Thailand and Malaysia to a combination of CP Group entities, namely C.P.
Retail Development Company Limited, Charoen Pokphand Holding Co., Ltd, CP All Public Limited Company and C.P.
Merchandising Co., Ltd ("CP Group") (the "Disposal"), following inbound interest received and a detailed
strategic review
-- Consideration for the Disposal represents an enterprise value of $10.6 billion (equivalent to GBP8.2 billion) on
a cash and debt free basis, implying an EV/EBITDA multiple of 12.5x[1]
-- Net cash proceeds of $10.3 billion (equivalent to GBP8.0 billion) before tax and other transaction costs
-- Following completion of the Disposal, the Board intends to return c.GBP5.0 billion to shareholders via a special
dividend with associated share consolidation
-- The Disposal will further de-risk the Tesco business by reducing indebtedness through a GBP2.5 billion pension
contribution that, along with other measures, is expected to eliminate the current funding deficit and
significantly reduce the prospect of having to make further pension deficit contributions in the future
-- Disposal unanimously agreed by Tesco Board to be in the best interests of all stakeholders
-- Completion of the Disposal, which is conditional on Tesco shareholder approval and customary regulatory approvals
in Thailand and Malaysia, is expected during the second half of 2020
-- The Disposal will further simplify the Tesco Group, enabling a stronger focus on driving cash generation and
returns to shareholders from our retail businesses in the UK and Ireland and in Central Europe
Dave Lewis, Chief Executive of Tesco, said:
"Following inbound interest and a detailed strategic review of
all options, we are announcing today the proposed sale of Tesco
Thailand and Tesco Malaysia. This sale releases material value and
allows us to further simplify and focus the business, as well as to
return significant value to shareholders. I would like to thank all
of our Tesco Thailand and Tesco Malaysia colleagues for their
dedication, professionalism and service to our customers, which has
resulted in the creation of such a strong business. I am confident
that the agreement we have reached with CP Group presents an
exciting opportunity for their continued success."
This summary should be read in conjunction with the full text of
this announcement. This announcement is available at
http://www.tescoplc.com. A circular containing details of the
Disposal and a notice convening a general meeting of the Company
will be sent to Tesco shareholders as soon as is practicable.
Enquiries:
Tesco
Investor Relations Chris Griffith +44 (0) 1707 912 900
Media Christine Heffernan +44 (0) 1707 918 701
Philip Gawith (Teneo) +44 (0) 207 420 3143
Greenhill & Co. International Goldman Sachs International Barclays Bank PLC
LLP Joint Financial Adviser Joint Financial Adviser,
Joint Financial Adviser Sponsor and Corporate
(020 7774 1000) Broker
(020 7198 7400) * Anthony Gutman (020 7623 2323)
* David Wyles * Alisdair Gayne
* Milan Hasecic
* Charles Gournay * Omar Faruqui
* Nick Harper
* Nicola Tennent
TESCO PLC ("TESCO" OR THE "COMPANY") PROPOSED DISPOSAL OF TESCO
THAILAND AND TESCO MALAYSIA
1. Introduction
Tesco announces that it has entered into a conditional agreement
with a combination of CP Group entities, namely C.P. Retail
Development Company Limited, Charoen Pokphand Holding Co., Ltd, CP
All Public Limited Company and C.P. Merchandising Co., Ltd ("CP
Group") with respect to the sale of Tesco's businesses in Thailand
and Malaysia (the "Disposal"), which is comprised of Tesco's entire
shareholding in Tesco Stores (Thailand) Limited ("Tesco Thailand"),
Tesco Stores (Malaysia) Sdn Bhd ("Tesco Malaysia") and any
respective subsidiaries (together, the "Asia Business"). The
Disposal will simplify the Tesco Group, enabling a stronger focus
on its retail businesses in the UK and Ireland and in Central
Europe. The Disposal also realises material value for Tesco's
shareholders and allows the Tesco Group to further de-risk the
business by reducing indebtedness through a significant pension
contribution of GBP2.5 billion.
The consideration payable to Tesco pursuant to the Disposal
represents an enterprise value of $10.6 billion (equivalent to
GBP8.2 billion) on a cash and debt free basis, representing an
EV/EBITDA multiple of 12.5x([2]) .
Under the terms of the Disposal, net cash proceeds are expected
to be $10.3 billion (equivalent to GBP8.0 billion) before tax and
other transaction costs (the "Net Cash Proceeds").
The Disposal constitutes a Class 1 transaction for Tesco under
the Listing Rules and completion of the Disposal ("Completion") is
therefore conditional on, inter alia, the approval of Tesco
shareholders at a general meeting of the Company's shareholders.
The Disposal is also subject to customary regulatory approvals in
Thailand and Malaysia. A circular containing further details of the
Disposal and a notice convening the general meeting will be sent to
Tesco shareholders as soon as practicable. It is also expected that
shortly after Completion, a separate general meeting will be
convened to seek shareholder approval for the return of proceeds
and associated share consolidation. A separate circular will be
sent to shareholders containing further details on these.
2. Background to and reasons for the Disposal
Over the last four years Tesco's performance has significantly
improved, in particular within the UK, its largest and most
important market, but also across the wider Group. In October 2019,
Tesco announced that it had met or exceeded the targets it had set
against each of its six key strategic drivers, and that all
elements of its turnaround plan had been executed successfully.
The Group's balance sheet is now stronger, with total
indebtedness reduced by GBP7.0 billion since the financial year end
2014/15. This has been driven by strong business performance, the
release of GBP1.7 billion of value from the property portfolio, and
selective asset disposals, including of the Korean business in
2015. In addition, the Group has completed the merger with Booker,
combining the largest wholesale food business in the UK with the
largest food retailer and unlocking significant shareholder value
in the process. The improved business performance, combined with
the reduction in indebtedness, means that Tesco now has an
investment grade rating from its three covering rating
agencies.
With a renewed focus on customers, colleagues and suppliers, the
business is ideally positioned to deliver strong performance for
all of its stakeholders.
Throughout the Group's transformation, the Board and management
team have been focused on ensuring the strategy and the portfolio
management approach deliver attractive returns for shareholders. In
2017/18, on the back of stronger operational and financial
performance, the ordinary dividend was reintroduced and
subsequently it has increased by 92% last year. This year the
target pay-out of 50% of earnings is expected to be reached.
It is from this strengthened position that the Board has decided
to respond to the expressions of interest it received for the Tesco
Thailand and Tesco Malaysia. Tesco's Asian operations have been an
important part of the Group for many years and constitute an
exceptionally high-quality business, with market leading positions
in two key markets of Thailand and Malaysia. Given the high value
that could be received for Tesco Thailand and Tesco Malaysia, the
Board concluded that it would be in shareholders' best interests to
conduct a strategic review to determine the best option for
continued value creation. The conclusion of this strategic review
led the Board subsequently to launch a competitive process to
evaluate potential value creation through a disposal.
The Group received multiple offers for the Asia Business and the
Board has unanimously concluded that the offer by CP Group to
acquire the business for an enterprise value of GBP8.2 billion on a
cash and debt free basis should be recommended to shareholders. The
Board believes the Disposal will realise a significantly higher
value than could be generated from Tesco's continued ownership and
investment. It will also enable the Group to return significant
proceeds to shareholders, with c.GBP5.0 billion expected to be
returned via a special dividend, and to further de-risk the
business by reducing indebtedness through a significant pension
contribution of GBP2.5 billion.
3. Information on the Asia Business
Information on Tesco Thailand
Tesco began operating in Thailand in 1998 through Ek--Chai,
which operates under the name "Tesco Lotus", a network of stores
comprising various formats across Tesco Thailand as well as an
online shopping platform and third-party applications such as
Lazada and Happy Fresh.
Tesco Lotus is a leading grocery retailer in the Thailand market
and one of the most recognised retail brands in Thailand. It
generated approximately GBP4.1 billion in revenue (excl. VAT, incl.
fuel) in the financial year ended 23 February 2019, operates a
network of 1,967([3]) stores across Tesco Thailand and serves over
13 million customers each week. As part of its offer to customers
and to support the core grocery business, in many large freehold
and leasehold stores Tesco Thailand has developed an attractive and
profitable mall business, which in its own right is one of the
largest such operators in the market.
Ek--Chai, a subsidiary of Tesco Stores (Thailand) Limited,
supplies its stores from six distribution centres and two hubs
across Thailand. The stores and distribution centres are located on
and within land and buildings owned or leased by Ek--Chai. Ek--Chai
also leases space in its major shopping malls to tenants.
Information on Tesco Malaysia
Tesco began operating in Malaysia under the name Tesco Malaysia
in 2002, as part of a joint venture with Sime Darby Berhad. Tesco
Malaysia is a leading grocery retailer in the Malaysian market and
one of the most recognised retail brands in Malaysia. It generated
approximately GBP0.8 billion in revenue (excl. VAT, incl. fuel) in
the financial year ended 23 February 2019 and operates a network of
68([4]) stores across Malaysia. Tesco Malaysia supplies its stores
from two distribution centres in Malaysia, with its stores and
distribution centres located on and within land and buildings
either owned, leased or tenanted by Tesco Malaysia.
As in Thailand, Tesco Malaysia operates a highly successful mall
business alongside its retail stores from its freehold and
leasehold estate.
Trading results for the Asia Business
A summary of the trading results of the Asia Business for the
two 52-week periods ended 24 February 2018 and 23 February 2019,
extracted without material adjustments from the consolidation
schedules and supporting accounting records that underlie the Tesco
Group's audited consolidated financial statements for the financial
years ended 24 February 2018 and 23 February 2019 is set out
below.
The Asia Business has not in the past formed a legal group and
has not prepared separate consolidated financial statements. The
financial information shown for the financial years ended 24
February 2018 and 23 February 2019 has been prepared applying the
IFRS accounting principles adopted in the Tesco Group's
consolidated financial statements for the financial year ending 23
February 2019.
52 weeks ended 24 February 2018 52 weeks ended 23 February 2019 52 weeks ended 23 February 2019
(pre-IFRS 16) (pre-IFRS 16) (post-IFRS 16)
GBP million GBP million GBP million
unaudited unaudited unaudited
Revenue 4,947 4,873 4,873
Operating
profit 293 232 265
Profit
before
taxation 289 235 236
4. Summary of terms of the Disposal
The consideration payable to Tesco pursuant to the Disposal
represents an enterprise value of $10.6 billion (equivalent to
GBP8.2 billion) on a cash and debt free basis, representing an
EV/EBITDA multiple of 12.5x([5]) . The transaction values Tesco
Thailand at an enterprise value of $9.9 billion, including $0.4
billion of net cash. The transaction values Tesco Malaysia at an
enterprise value of $0.7 billion, including $0.6 billion of net
debt.
Under the terms of the Disposal, Net Cash Proceeds are expected
to be $10.3 billion (equivalent to GBP8.0 billion) before tax and
other transaction costs. Tax and other transaction costs are
expected to be in the region of GBP0.1 billion.
The Disposal is a Class 1 transaction for Tesco under the
Listing Rules and is therefore conditional upon the approval of its
shareholders. It is also conditional upon obtaining customary
regulatory approvals in Thailand and Malaysia, including the
approval of the Trade Competition Commission of Thailand (the TCC),
which is expected to be received during Q3 2020.
As is usual in transactions of this nature, the Sale Agreement
contains obligations on both sides to obtain the required
approvals, as well as customary warranties and indemnities. The
Disposal also includes certain transitional services to be provided
between Tesco and the Asia Business, and a transitional licence
permitting the Asia Business to continue to use the Tesco brand, in
each case for a limited period following Completion.
5. Use of proceeds and financial effects of the Disposal
Use of proceeds
Following Completion, the Board intends to return c.GBP5.0
billion to shareholders by way of special dividend. The Board also
intends to make a significant contribution of GBP2.5 billion to the
Group's UK defined benefit Pension Scheme and, to further increase
security in the Scheme, will provide properties as an additional
contingent asset with a value of GBP0.2 billion. This pension
contribution will enable further de-risking of the Scheme. Based on
the current technical provisions deficit in the Group's UK Pension
Scheme, and taking into account the GBP0.3 billion annual
contribution to be paid in FY2020/2021, the GBP2.5 billion pension
contribution is expected to eliminate the current funding deficit.
This will significantly reduce the prospect of having to make
further deficit contributions in the future, and release c.GBP260
million of annual free cash flow. The IAS19 deficit is also
expected to be significantly reduced. Agreement has been reached
with the Trustees of the Group's UK Pension Scheme in respect of
the contribution to be paid to the Scheme, and clearance received
from the Pension Regulator in connection with the Disposal and the
expected return of proceeds. The agreement with the Trustees also
covers the key principles of the triennial scheme valuation, which
will be calculated as at 31 December 2019. The balance of the Net
Cash Proceeds, expected to be c.GBP0.5 billion, will be retained to
strengthen the balance sheet and used for general corporate
purposes.
Return of proceeds to shareholders
It is currently expected that the return of proceeds to
shareholders of c.GBP5.0 billion will be implemented by way of a
special dividend. In order to maintain the comparability of the
Group's share price and per-share metrics before and after the
return of proceeds, the Company also intends to undertake a share
consolidation in conjunction with the return of proceeds. It is
expected that full details of the return of proceeds and share
consolidation will be made available to shareholders shortly after
Completion, at which time a separate general meeting will be
convened to seek shareholder approval for the return of proceeds
and associated share consolidation.
Financial effects of the Disposal on the Retained Group
In the 52 weeks ending 23 February 2019, the Asia Business
contributed EBITDA of GBP640 million and operating profit of GBP265
million to Tesco. As at 23 February 2019, the Asia Business had
gross assets of GBP4.4 billion and net assets of GBP2.6
billion.
Following the Disposal, Tesco will continue to be a highly cash
generative business with a robust and prudently managed balance
sheet. Going forward, reflecting the Group's more focused
operations, the Board is targeting leverage of around 2.5x total
indebtedness/EBITDAR, the lower end of the current range. The Board
and executive management team will continue to focus on delivering
excellent customer satisfaction, cash profitability, free cash flow
and earnings growth. The Group will also have a clear capital
allocation policy centred around investing in the business to
maintain the Group's market leading position and delivering
sustainable returns to shareholders.
As the business is expected to continue to be highly cash
generative following the Disposal, it is envisaged that the
ordinary dividend will be supplemented in due course with
additional returns to shareholders, likely to be in the form of
share buybacks.
6. Summary of information on the Retained Group and future strategy
Following Completion, Tesco will be a significantly more focused
business with the leading market position in the UK and Ireland,
with 3,769([6]) stores from convenience formats through to larger
stores, as well as our wholesale business, Booker.
In addition, the Group has an established presence in four
Central European countries, with 895 stores comprising hypermarkets
and convenience formats in the Czech Republic, Slovakia, Hungary
and Poland. The Group also operates Tesco Bank, which provides a
simple and convenient retail bank to 6 million customers.
The Board is encouraged by the growth and value creation
opportunities it sees across the Group. At the Capital Markets Day
on 18 June 2019, the Executive team outlined many of the untapped
value opportunities ranging from greater innovation in product
offering and how we serve customers, further cost reduction
opportunities, greater focus on customer loyalty (e.g. the new
Clubcard Plus initiative) and further integration and growth from
Booker.
In the UK and Ireland, the competitiveness of the offer has been
rebuilt and this is where the greatest opportunity is seen, looking
forward. There is a strong market position as the leading food
retailer with c.27% market share, 3,769 stores in the UK and
ROI([7]) and over 99% online coverage in the UK. There is a strong,
trusted brand with an NPS score up 8 points over the last year. The
business is fully price competitive, with Exclusively at Tesco
competing directly with discount retailers. Tesco was recognised
for quality as winner of 'Britain's Favourite Supermarket' for the
fifth consecutive year and with Tesco Finest producing offerings
capable of competing directly with premium brands. Tesco also has
one of the largest loyalty programmes in UK retail with a 19
million+ customer base of Clubcard and Clubcard Plus members.
Innovation is being driven across the product offering in the
fastest growing market segments, with a leading UK market position
in "free from" and vegan ranges in addition to leading positions in
healthy offerings, which we believe offers customers healthier
products, for example through sugar and salt reduction.
The business has the opportunity to further expand its strong
online presence, leveraging its position as the largest UK online
grocer by opening more than 25 urban fulfilment centres over the
next three years and doubling its online capacity. Tesco has, and
is collaborating in the development of, leading technology, with
Trigo frictionless shopping technology and the 'Scan, Pay, Go' app.
Through "Simplify to serve" the business continues its journey to
focus on improving customer service and lowering operating costs,
with simplified Group structures, long term partnerships with
suppliers and with procurement efficiencies generated through the
Carrefour buying alliance.
Significant growth opportunities are seen in convenience,
catering, delivery and services which are accessed through the
Booker business which is on track to meet its GBP2.5 billion
incremental revenue ambition outlined at the time of the merger.
The Group will also continue to utilise its strong supplier
relationships to improve the quality, choice and range for all of
Booker's customers, deploying relevant skills and platforms across
the combined business.
As such, the business is in a strong position to generate
sustainable competitive growth in the UK and Ireland, and with it,
strong cash generation.
The Central European business operates in Poland, Czech
Republic, Hungary and Slovakia and provides the Group with
geographic diversification. The ongoing transformation of this
division continues, so as to ensure the business is re-positioned
to drive sustainable long-term growth in the region.
In summary, the strategy will seek to create value for
shareholders through maintaining and strengthening the
competitiveness of the offer for customers across all the Group's
markets. This will allow the business to continue to leverage its
unique market position to generate an attractive and sustainable
level of free cash flow. This cash will be utilised according to
the capital allocation priorities set out below, and which are
consistent with the capital allocation framework under which the
business has operated in recent years:
1. Disciplined reinvestment in our business with ongoing capex
guidance of GBP0.9 - 1.2 billion p.a.
2. Target leverage of c.2.5x, with a strong investment grade credit rating
3. Dividends at a 50% pay-out ratio
4. Selective and opportunistic investment in inorganic growth opportunities that may arise
5. Return surplus cash to shareholders, expected to be via share buybacks
The Board expects the execution of this strategy to result in
improved customer satisfaction, enhanced earnings and increased
returns for shareholders.
7. Information on CP Group
CP Group comprises various public and private entities including
Charoen Pokphand Foods Public Company Limited, and CP ALL Public
Company Limited.
Charoen Pokphand Group Co. Ltd
Charoen Pokphand Holding Co., Ltd. serves as a parent company of
the CP Group. As a holding company, Charoen Pokphand Group Co.,
Ltd. holds shares of subsidiaries in Thailand and overseas. The
Group operates across many industries ranging from industrial to
service sectors, which are categorised into 8 Business Lines
covering 13 Business Groups. Currently, the Group has investments
in 21 countries and economies.
CPF
Charoen Pokphand Foods Public Company Limited ("CPF") operates
integrated agro-industrial and food business including livestock
and aquaculture such as swine, broiler, layer, duck, shrimp and
fish across 17 countries with its vision to become Kitchen of the
World.
CPALL
CP All Public Company Limited ("CPALL") is the sole operator of
7-Eleven convenience stores in Thailand. In 2013, CPALL acquired
Siam Makro Public Company Limited operating membership based Cash
and Carry trade centres.
8. Expected timetable to Completion
A circular containing further details of the Disposal, the
Board's recommendation, and the notice of the general meeting and
the resolution required to approve the Disposal will be sent to
Tesco's shareholders as soon as practicable. Completion is expected
to occur during the second half of calendar year 2020.
9. Advisers
Greenhill & Co. International LLP, Goldman Sachs
International and Barclays Bank PLC, acting through its Investment
Bank ("Barclays"), are acting as Joint Financial Advisers to Tesco
in relation to the Disposal. Barclays is acting as Financial
Sponsor and Corporate Broker to Tesco in relation to the Disposal.
Freshfields Bruckhaus Deringer LLP is acting as legal adviser to
Tesco.
Enquiries:
Tesco
Investor Relations Chris Griffith +44 (0) 1707 912 900
Media Christine Heffernan +44 (0) 1707 918 701
Philip Gawith (Teneo) +44 (0) 207 420 3143
Greenhill & Co. International Goldman Sachs International Barclays Bank PLC
LLP Joint Financial Adviser Joint Financial Adviser,
Joint Financial Adviser Sponsor and Corporate
(020 7774 1000) Broker
(020 7198 7400) * Anthony Gutman (020 7623 2323)
* David Wyles * Alisdair Gayne
* Milan Hasecic
* Charles Gournay * Omar Faruqui
* Nick Harper
* Nicola Tennent
Tesco plc is listed on the London Stock Exchange. More
information can be found at www.tescoplc.com.
Exchange rates
Historic exchange rates have been used to convert THB and MYR to
GBP where relevant. In respect of each of the financial periods
ended 24 February 2018 and 23 February 2019, the exchange rates
are:
Thailand Malaysia
FY Period Date Balance Sheet P&L Balance Sheet P&L
17/18 12 24 February 2018 43.93 43.73 5.477 5.526
18/19 12 23 February 2019 40.89 42.63 5.322 5.357
------ ------- ----------------- -------------- ------ -------------- ------
Terms of the Disposal presented in GBP use a rate of
USD1.29:GBP1.00 based on the average daily closing rate from Monday
2 to Friday 6 March 2020.
IFRS 16
Financial information shown, unless otherwise stated, is stated
on a post-IFRS 16 basis.
Important information relating to financial advisers
Greenhill & Co. International LLP, which is authorised and
regulated in the UK by the Financial Conduct Authority, is acting
exclusively for Tesco and for no one else in connection with the
matters described in this document and is not, and will not be,
responsible to anyone other than Tesco for providing the
protections afforded to its clients nor for providing advice in
connection with the matters set out in this document.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the
UK, is acting exclusively for Tesco and for no one else in
connection with the matters described in this document and is not,
and will not be, responsible to anyone other than Tesco for
providing the protections afforded to its clients nor for providing
advice in connection with the matters set out in this document.
Barclays, which is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, is
acting exclusively for Tesco and no one else in connection with the
Disposal and will not be responsible to anyone other than Tesco for
providing the protections afforded to clients of Barclays nor for
providing advice in relation to the Disposal or any other matter
referred to in this announcement.
Forward looking statements
This document contains statements which are, or may be deemed to
be, "forward looking statements" which are prospective in nature.
All statements other than statements of historical fact are forward
-- looking statements. They are based on current expectations and
projections about future events, and are therefore subject to risks
and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward -- looking statements. Often, but not always, forward
looking statements can be identified by the use of forward looking
words such as "plans", "expects", "is expected", "is subject to",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "believes", "targets", "aims", "projects" or words
or terms of similar substance or the negative thereof, are forward
-- looking statements, as well as variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "should", "would", "might" or "will" be taken,
occur or be achieved. Such statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations. Forward -- looking statements include statements
relating to (a) future capital expenditures, expenses, revenues,
earnings, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects, (b) business and
management strategies and the expansion and growth of Tesco's
operations, and (c) the effects of global economic conditions on
Tesco's business.
Such forward--looking statements involve known and unknown risks
and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors may cause
actual results, performance or achievements of Tesco to be
materially different from any future results, performance or
achievements expressed or implied by the forward looking
statements. Important factors that could cause actual results,
performance or achievements of Tesco to differ materially from the
expectations of Tesco, include, among other things, general
business and economic conditions globally, industry trends,
competition, changes in government and other regulation and policy,
including in relation to the environment, health and safety and
taxation, labour relations and work stoppages, interest rates and
currency fluctuations, changes in its business strategy, political
and economic uncertainty and other factors. Such forward--looking
statements should therefore be construed in light of such factors.
Neither Tesco nor any of its directors, officers or advisers
provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any
forward--looking statements in this document will actually occur.
You are cautioned not to place undue reliance on these
forward--looking statements, which speak only as of the date
hereof. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules and the
Disclosure and Transparency Rules), Tesco is not under any
obligation and Tesco expressly disclaims any intention or
obligation to update or revise any forward--looking statements,
whether as a result of new information, future events or
otherwise.
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe, any applicable requirements. This announcement
has been prepared for the purposes of complying with the UK Listing
Rules and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been
prepared in accordance with laws and regulations of any
jurisdiction outside of England.
Cautionary statement
This announcement is not intended to, and does not constitute,
or form part of, any offer to sell or an invitation to purchase or
subscribe for any securities or a solicitation of any vote or
approval in any jurisdiction. Shareholders are advised to read
carefully the formal documentation in relation to the Disposal once
it has been despatched. Any response to the proposals should be
made only on the basis of the information in the formal
documentation to follow.
Tesco PLC's LEI number is: 2138002P5RNKC5W2JZ46
Appendix
The following definitions apply throughout this announcement,
unless the context otherwise requires:
"Asia Business": means Tesco Thailand, Tesco Malaysia and any
respective subsidiaries.
"Barclays": means Barclays Bank PLC acting through its
Investment Bank.
"Board": means the board of directors of the Company.
"Company" or "Tesco": means Tesco PLC.
"Completion": means completion of the Disposal in accordance
with the provisions of the Sale Agreement.
"CP Group": means C.P. Retail Development Company Limited,
Charoen Pokphand Holding Co., Ltd, CP All Public Limited Company
and C.P. Merchandising Co., Ltd.
"Disclosure and Transparency Rules": means the Disclosure
Guidance and Transparency Rules made by the FCA for the purposes of
Part VI of FSMA, as amended from time to time.
"Disposal": means the sale of Tesco's businesses in Thailand and
Malaysia to CP Group.
"EBITDA": means earnings before interest, taxation, exceptional
items, depreciation and amortisation.
"Group's Pension Scheme": means the Tesco PLC Pension
Scheme.
"Listing Rules": means the Listing Rules made by the FCA for the
purposes of Part VI of FSMA, as amended from time to time.
"Net Cash Proceeds": means net cash proceeds from the Disposal
before adjustment for estimated tax and other transaction costs.
.
"Retained Group": means the Company and its subsidiaries and
subsidiary undertaking from time to time excluding the Asia
Business, being the continuing business of the Tesco Group
following Completion.
"Sale Agreement": means the share and purchase agreement dated 9
March 2020 entered into between the Tesco Stores Limited, Tesco
Holdings B.V., C.P. Retail Development Company Limited, Charoen
Pokphand Holding Co., Ltd, CP All Public Limited Company and C.P.
Merchandising Co., Ltd in connection with the Disposal.
"Tesco Group": means in respect of any time prior to Completion,
Tesco and its consolidated subsidiaries and subsidiary undertakings
and, in respect of any time following Completion, the Retained
Group.
"Tesco Malaysia": means Tesco Stores (Malaysia) Sdn Bhd.
"Tesco Thailand": means Tesco Stores (Thailand) Limited.
"Trustees of the Pension Scheme": means the trustees of the
Group's Pension Scheme.
"UK" or "United Kingdom": means the United Kingdom of Great
Britain and Northern Ireland.
([1]) Based on the financial year ended 23 February 2019 on a
post-IFRS 16 basis.
([2]) Based on the financial year ended 23 February 2019 on a post-IFRS 16 basis.
([3]) As at 24 August 2019.
([4]) As at 24 August 2019.
([5]) Based on the financial year ended 23 February 2019 on a
post-IFRS 16 basis.
([6]) As at 24 August 2019.
([7]) As at 24 August 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
DISEAKDNESDEEEA
(END) Dow Jones Newswires
March 09, 2020 03:00 ET (07:00 GMT)
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