B&M Regulatory News (BME)

11 March 2020

B&M European Value Retail S.A.

Sale of German Business

B&M European Value Retail S.A. (the "Company" or the "Group") announces that, following the strategic review in relation to the Group's German business, which was announced in November 2019, it has exchanged contracts today for the sale of J.A. Woll-Handels GmbH ("Jawoll").

The sale is for the Group's entire 80% shareholding (the "Shares") in Jawoll to a purchasing consortium led by AC Curtis Salta GmbH, a company funded by Adiuva Capital. The purchaser consortium also includes Wiebke Stern, Sebastian Dorin, Alexander Dorin, STIWEC GmbH and Jalogy Beteiligungs GmbH.

Completion of the transaction, which is conditional upon, among other things, German competition authority clearance being granted, is expected to occur within the next 28 days or by a long stop date of 1 June 2020.

Subject to completion, the total consideration payable to the Group for the transaction is €12,501,000 which is to be paid in cash. €2,501,000 is payable on completion of the transaction and €10,000,000 is payable on 31 December 2020 conditional on the on-going trading of Jawoll. In addition, on completion the purchaser's consortium will repay Jawoll's bank debt, which has a facility limit of up to €16m, and had been guaranteed by the Group.

The total consideration payable to the Group comprises:

(i) €2,500,000 as a part repayment of an intra-group trading account balance of €5,600,000 owed by Jawoll to the Group with the remaining balance having been waived;

(ii) €10,000,000 part repayment of loans made by the Group to Jawoll of €42,980,000 (including interest) with the balance of those loans having been waived; and

(iii) a nominal sum of €1,000 for the Shares.

Accordingly, the transaction will not have a material impact on the Group's leverage.

Jawoll, together with its wholly owned subsidiary, Jawoll Vertriebs GmbH ("Vertriebs"), is a general merchandise discount retailer with 89 stores in the North-West of Germany. The consolidated losses of those entities as reported for the financial year ended 31 March 2019 was £15.4m and the value of their Gross Assets as at 28 September 2019 (under IFRS16) was £192.6m.

The sale of Jawoll (together with its wholly owned subsidiary) constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority's Listing Rules, and, as such does not require B&M shareholders' approval.

One of the purchaser's consortium, STIWEC GmbH ("STIWEC"), is an existing shareholder owning 13% of the shares of Jawoll. Another member of the purchaser's consortium, Jalogy Beteiligungs GmbH ("Jalogy"), is an investment company owned by Ralf Hartwich. Mr Hartwich is the Managing Director of Jawoll and Vertriebs and he is also an existing shareholder owning 7% of the shares of Jawoll. The transaction falls within the exemption in Listing Rule 11 Annex 1 Paragraph 9 of transactions to which the related party transaction rules do not apply, as it relates to shares in an insignificant subsidiary undertaking of B&M's Group.

The transaction does however constitute a related party transaction under the Luxembourg Law of 24 May 2011 (as amended on 1 August 2019). For the purpose of that law the Company confirms as follows. The related parties are STIWEC and Jalogy and the nature of their relationships with Jawoll and Vertriebs is as set out above in this Announcement. They have no other material relationships with the Company or any other entities in the B&M Group. The date of the transaction is the date of this Announcement. The value and net financial impact to the B&M Group of the transaction is as set out above in this Announcement. The sale transaction with the purchaser consortium includes the sale of 11% of the total issued shares in Jawoll to STIWEC and 8.45% of the total issued shares in Jawoll to Jalogy, for part of the nominal consideration (as referred to above in this Announcement) to be paid for the Shares. The transactions with those parties forms part of the terms of the overall sale transaction with the purchaser consortium, in respect of which the total consideration for the sale transaction is set out above. That consideration reflects the loss making position of Jawoll and its subsidiary as described above.

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

Enquiries

B&M European Value Retail S.A.

For further information please contact +44 (0) 151 728 5400

Simon Arora, Chief Executive

Paul McDonald, Chief Financial Officer

Steve Webb, Investor Relations Director

Investor.relations@bandmretail.com

Media

For media please contact +44 (0) 207 379 5151

Maitland

Daniel Yea

bmstores-maitland@maitland.co.uk