China-based conglomerate Fosun Industrial Holdings has concluded an agreement for the purchase of a majority stake in Austrian hosiery business Wolford.
The move will see Fosun acquire more than 2.5m shares from the main holder of the company – about 50.87% of Wolford’s total share capital – for EUR12.80 (US$15.78) per share.
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Meanwhile, in a bid to strengthen Wolford’s financial structure, Fosun has agreed to provide a EUR22m fresh capital increase.
Wolford has taken a number of steps to return to profitability of late, including axing 56 jobs as part of its cost reduction programme since July of last year.
Wolford axes more jobs amid restructuring
The capital increase, which requires a resolution from the general meeting, says Wolford, is designed to provide the struggling company with fresh equity.
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In addition, Fosun has committed to subscribe for a cash capital increase in the share capital of Wolford from EUR36.4m to EUR48.8m by issuing 1.7m new shares at EUR12.80 per share.
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By GlobalDataThis commitment includes the subscription of new shares to the extent that shareholders of Wolford do not exercise their subscription rights in full. The maximum cash contribution by Fosun hence amounts to EUR22m.
The closing of the share purchase agreement and general meeting is expected to take place in May. The meeting will be convened after clearance of Fosun’s share purchase by the competent merger control authorities.
Meanwhile, Fosun has informed Wolford of its intention to launch an anticipatory mandatory takeover offer to the remaining shareholders of the business in accordance with section 22 of the Austrian Takeover Act. The takeover shall be subject to the closing of the share purchase agreement, with the price amounting to the weighted average stock exchange price of the last six months of EUR13.67 per share. Therefore, the purchase price per share in the takeover offer will exceed the price per share as set forth in the share purchase agreement.
Fosun has previously invested in several fashion and luxury brands including German fashion company Tom Tailor and French luxury label Lanvin.
“We welcome the entry of a financially strong core shareholder which is experienced in the luxury sector and will enhance our access to Asian markets”, says Wolford CEO Axel Dreher. “This confirms the reputation of our brand and its growth opportunities.”
