Dufry South America Ltd. Relevant Facts

Jan 11, 2010, 04:01 ET from Dufry South America Ltd.

RIO DE JANEIRO, Jan. 11 /PRNewswire/ -- Dufry South America Ltd. ("DSA"), a company incorporated in Hamilton, Bermuda, with shares listed on the Luxembourg Stock Exchange and with Brazilian Depositary Receipts ("BDRs") listed on the Sao Paulo Stock Exchange - BM&FBOVESPA ("BM&FBovespa") hereby informs the market, in accordance with Instrucao CVM 358/02, that, the Dufry Group, a leading global travel retailer with over 1,000 outlets in 42 countries, proposes to combine Dufry AG ("DAG") with DSA.

The proposal foresees a merger whereby DSA shareholders would receive 1.00 DAG share in exchange for 4.10 DSA shares and DSA BDR holders shall receive 1.00 DAG BDR in exchange for 4.10 DSA BDRs. The proposal also includes an extraordinary cash dividend of USD 3.92 per DSA share or BDR that will be paid by DSA to DSA shareholders and BDR holders after the approval of the merger. In order to evaluate and negotiate the terms and conditions of the merger, the DSA Board of Directors has convened a Special Board Committee, formed by a majority of Independent Members. The members of this Special Board Committee are Humberto Eustaquio Cesar Mota, Chairman of DSA; Jorge Born, Independent Board Member; Maurizio Mauro, Independent Board Member; Andres Rozental, Independent Board Member; and Jose Lucas Ferreira de Melo, Minority Director appointed by the minority shareholders of DSA. Mr. Maurizio Mauro was appointed Chairman of the Special Board Committee.

DAG, which owns 51.04% of DSA's share capital and is incorporated in Switzerland and listed on the SIX Swiss Exchange, has proposed to DSA Board of Directors on January 10, 2010, a business combination of DAG with DSA. The proposal foresees that DAG will issue new shares in a capital increase and DSA will be absorbed via a merger by Dufry Holdings & Investments AG, a wholly-owned Swiss subsidiary of DAG. DAG will, at the same time, list its shares in the form of BDRs at the BM&FBovespa in Brazil. The public shareholders and BDR holders of DSA will receive DAG shares or DAG BDRs in exchange for their DSA shares or DSA BDRs. In addition, an extraordinary cash dividend will be paid by DSA to DSA shareholders and BDR holders conditioned upon the merger being approved. Following the completion of the transaction, DAG will own 100% of the business of DSA and the trading of DSA shares and BDRs will be discontinued. Dufry Group initiated an internal corporate restructuring pursuant to which DAG acquired 33,150,000 shares of DSA from DAISA-Dufry Americas Investments S.A. and 24,780 shares of DSA from DTravel S.A. Both selling companies are two fully owned subsidiaries of DAG. As a result, DAG today directly holds 51.04% of DSA.

If the merger is approved, pursuant to DAG's proposal, DSA shareholders are expected to receive 1.00 DAG share in exchange for 4.10 DSA shares and BDR holders are expected to receive 1.00 DAG BDR in exchange for 4.10 DSA BDRs. Furthermore, if the merger is approved, DSA shareholders and BDR holders will receive an extraordinary cash dividend of USD 3.92 per share or BDR. The implied value for each DSA share or BDR - calculated from the exchange ratio plus the extraordinary dividend - is BRL 35.52, which is equivalent to 30-trading day volume weighted average BDR price and 0.3% over the closing price of the BDRs on Friday, January 8, 2010.

To assist DAG in ensuring, in its opinion, the adequate and fair treatment of shareholders and BDR holders of both DSA and DAG, DAG has engaged Banco Santander (Brasil) S.A., Calyon S.A., Banco de Investimentos Credit Suisse (Brasil) S.A., and Morgan Stanley & Co. Limited as financial advisors to prepare financial valuation analyses with regards to the proposed transaction based on information provided by DAG and publicly available information. Banco Santander and Credit Suisse have performed these analyses on both companies and have issued valuation reports to DAG summarising their findings, including the implied exchange ratios. These reports have been taken into account by the Board of DAG in determining the proposed consideration. Considering these reports together with other information and aspects deemed appropriate, it is DAG's view that the proposed consideration is attractive to DSA shareholders. Morgan Stanley and Calyon have been retained by DAG to opine, from a financial point of view, on the fairness of the exchange ratio to DAG with regards to the transaction.

DAG has informed that the rationale for the transaction is to establish a simplified corporate structure of Dufry Group with a unified shareholder base which can participate in a balanced and diversified concession portfolio with an exposure of approximately 60% to emerging markets and a proven track record of delivering growth. Furthermore, the transaction will increase Dufry Group's strategic flexibility to pursue growth opportunities globally and in South America. Equally, access to capital markets will be facilitated for Dufry Group and both sets of shareholders, those of DSA and DAG, should benefit from an improved liquidity in the share trading due to a substantially larger free float. The merger also allows Dufry Group to adhere to the new Brazilian BDR regulation that has become effective as from 1 January, 2010, whereby only companies with more than 50% of their assets outside Brazil will be allowed to register BDR programs.

Special Board Committee by the Board of Directors of DSA to Evaluate and Negotiate the Terms and Conditions of the Merger

In order to assure the fairness of the transaction, the Board of Directors of DSA has formed a Special Board Committee, formed by a majority of Independent Members, to evaluate, discuss and negotiate the terms and conditions of the merger. The members of this Special Board Committee are Humberto Eustaquio Cesar Mota, Chairman of DSA; Jorge Born, Independent Board Member; Maurizio Mauro, Independent Board Member; Andres Rozental, Independent Board Member; and Jose Lucas Ferreira de Melo, Minority Director appointed by the minority shareholders of DSA. Mr. Maurizio Mauro was appointed Chairman of the Special Board Committee. The Special Board Committee may retain advisors to review relevant aspects of the merger.

The merger will be subject to the laws of Switzerland and Bermuda. The merger is conditional on the approval of the transaction by the shareholders of DAG and DSA, the listing of DAG's new shares on the SIX Swiss Exchange, DAG's registration with the CVM as a BDR issuer and on the listing of its shares in the form of BDRs on the BM&FBovespa. On December 30, 2009, DAG applied for BDR issuer registration with the CVM.

Once the recommendation of the Special Committee of the DSA Board is issued, the companies will disclose to the market the exchange ratio for the merger and the other terms and conditions of the transaction that shall be disclosed to the shareholders and BDR holders of DSA and DAG in accordance with the applicable regulations.

Provided the special general meeting of members of DSA and extraordinary shareholders' meeting of DAG approve the merger in the second half of March, the transaction is expected to close within four months.

Presentation and Conference Call of DAG

DAG has informed that it has scheduled a venue to present the transaction. Speakers will be Julian Diaz, CEO Dufry Group, and Xavier Rossinyol, CFO Dufry Group.

The presentation will be held in English. A translation service will be available


    Date:            11 January, 2010
    Time:            11.00 Brazilian time / 14.00 CET
                      Hotel Grand Hyatt, Avenida das
                      Nacoes Unidas 13.301, Sao
    Venue:            Paulo, Brazil
    Dial-in numbers: Europe                            +41 44 580-1740
                     UK                               +44 20 3107-0289
                     US                                +1 706 679-6380
                     Conference ID:                           50044345

    Translated to
     Portuguese:
                     Brazil                           +55 11 2188 0188
                     Conference ID:                             524417

There will be a simultaneous webcast available which can be accessed through the website www.dufry.com. The presentation will be made available before the start of the venue through the website www.dufry.com.

A playback option will be available for 8 days, starting at 13.00 Brazilian time / 16.00 CET. The dial-in details are +1 706 645-9291 - Conference ID: 50044345.

Rio de Janeiro, January 11, 2010.

Ricardo Bullara

Chief Financial and Investors Relations Officer

For further information, please contact:



               Ricardo Bullara                         Sara Lizi
        Chief Financial and Investors
               Relations Officer               Investor Relations Manager
            Phone: +55 21 2157 9610             Phone: +55 21 2157 9901
         invest@dufrysouthamerica.com            sara.lizi@dufry.com.br

    Mario Rolla
    Corporate Communications Manager
    Phone: +55 21 2157 9611
    mario.rolla@dufry.com.br


Notice according to Bermuda Law

Notice is hereby given by Dufry South America Ltd. and Dufry Holdings & Investments AG (in the process of being registered) pursuant to Section 104B of the Companies Act 1981 that the companies intend to amalgamate and continue as Dufry Holdings & Investments AG in Switzerland.

US Disclaimer

This document and the information contained herein are not for distribution in or into the United States of America (including its territories and possessions, any state of the United States of America and the District of Columbia) (the "United States"). This document does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. The securities of Dufry AG have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

Not for PUBLICATION, distribution or release, DIRECTLY OR INDIRECTLY, in or into the United States of America

SOURCE Dufry South America Ltd.



RELATED LINKS

http://www.dufry.com