X5 Retail Regulatory News (FIVE)

13 Oct 2006 07:01

Pyaterochka Holding N.V.13 October 2006 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN 13 October 2006 PYATEROCHKA HOLDING N.V. ANNOUNCES THE ACQUISITION OF A RETAIL CHAIN AND A DISTRIBUTION CENTRE IN MOSCOW Amsterdam, 13 October 2006 - Pyaterochka Holding N.V., Russia's leading groceryretailer, today signed a binding agreement to acquire 100% of OOO "Metronom AG".The enterprise value of the transaction is US$ 200 mln payable in cash andthrough assumption of debt. As a result, Pyaterochka Holding N.V. will acquire a business owning retailpremises of approximately 33,000 square metres valued over US$ 115 mln incommercially attractive districts of the city of Moscow, as well as awholly-owned distribution and office centre in the central part of Moscow withtotal capacity of more than 17,000 square metres valued approximately US$ 35mln, with a land plot of 4.3 hectares with a possibility of its use foradditional purposes. Through this acquisition, Pyaterochka Holding N.V. will also acquire anestablished and growing operational business of 16 supermarkets in the city ofMoscow, 7 of which are owned and 9 of which are operated under long-term leaseagreements. The OOO "Metronom AG" has the rights for the retail operations inthe Russian Federation under own "Merkado" and "Merkadona" trademarks. The total space of these stores is approximately 50,000 square metres, of whichnet trade space is approximately 14,000 square metres, with another 14,000square metres subleased to non-food retail operators. According to companyestimates, in 2007 net retail sales of these stores will total no less than $110mln (net of VAT). Assuming that the operational business rent all of its retailpremises at market rates, it anticipates to generate EBITDA no less than at alevel of the average EBITDA margin for the Pyaterochka Group. The total transaction enterprise value of the operational business (excludingthe value of real estate) is approximately US$ 50 mln. According to the terms of the agreement the transaction is subject to theapproval of the Supervisory Board of Pyaterochka Holding N.V. and statuarygovernment approvals, including antimonopoly authorities. The transaction isexpected to close before the end of the year. Lev Khasis, Group Chief Executive Officer, commented on the signing of theacquisition agreement, "After the closing of the transaction, the acquisition of the "Merkado" assetswill significantly enhance our already leading position in the most importantmarket of Russia - the city of Moscow. The supermarkets are located inattractive locations with a strong existing customer base and can be easilyintegrated into the Group's existing formats. The distribution and office centrenear the city centre is a valuable addition to our real estate portfolio and isalso expected to be used as the corporate office of the Group, allowing us toconsolidate numerous leased office locations around the city which willcertainly save our rental costs as well as improve management and communication." Andrei Gusev, Group Director for Mergers, Acquisitions and Business Development,added, "This transaction clearly reflects the increased number of opportunities andpotential acquisition targets which we now enjoy as a combined entity, followingthe merger of Pyaterochka and Perekrestok this spring." Note to Editors: Pyaterochka Holding N.V. is Russia's largest food retailer in terms of sales.As of 30 September 2006, the group had 420 company-managed "Pyaterochka" softdiscount stores located in the Moscow (199), St. Petersburg (199) andYekaterinburg (22) areas, and 141 company-managed "Perekrestok" supermarketsacross Central Russia and Ukraine, including 81 stores in Moscow. As of 30 September 2006, franchisees operated 539 Pyaterochka branded storesacross Russia, in Ukraine and Kazakhstan. Perekrestok has 10 convenience storesoperated by franchisees in the Moscow area. Pyaterochka and Perekrestok have merged their operations as of 18 May 2006 tocreate the clear leader in the Russian food retail market. Pyaterochka's 2005 net sales (pre-merger) reached USD 1,359 million, with grossbanner sales in 2005 of over USD 2 billion. Perekrestok net sales reached USD1,015 million in 2005. The Group's pro forma (assuming both chains contribution from 1 January 2006)net sales for the first half of 2006 were US $1,581 million (managementaccounts). During 1H 2006, the Pyaterochka chain provided US $906 million of netsales, while the Perekrestok chain contributed US $675 million of net sales. Forward looking statements: This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identifiedby the fact that they do not only relate to historical or current events.Forward-looking statements often use words such as" anticipate", "target", "expect", "estimate", "intend", "expected", "plan", "goal" believe", or otherwords of similar meaning. By their nature, forward-looking statements involve risk and uncertainty becausethey relate to future events and circumstances, a number of which are beyondPyaterochka Holding N.V.'s control. As a result, actual future results maydiffer materially from the plans, goals and expectations set out in theseforward-looking statements. Any forward-looking statements made by or on behalf of Pyaterochka Holding N.V.speak only as at the date of this announcement. Save as required by anyapplicable laws or regulations, Pyaterochka Holding N.V. undertakes noobligation publicly to release the results of any revisions to anyforward-looking statements in this document that may occur due to any change inits expectations or to reflect events or circumstances after the date of thisdocument. - End - Enquiries to: Pyaterochka Holding N.V. Gennady Frolov Head of Corporate Communications Office +7 495 984 6956 Mobile +7 495 998 3335 Email gennady.frolov@x5.ru This information is provided by RNS The company news service from the London Stock Exchange