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Title: Closing of the acquisition of Mall Group a.s. and WE|DO CZ s.r.o.

April 1, 2022

Date: 1 April 2022

Current report No.: 16/2022

Title: Closing of the acquisition of Mall Group a.s. and WE|DO CZ s.r.o.

Legal basis: Article 17 of MAR - inside information

Acting on the basis of Art. 17 sec. 1 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC ("MAR"),

with reference to: (i) current report No. 14/2021 of 4 November 2021 on the execution of an agreement to acquire Mall Group a.s. and WE|DO CZ s.r.o. (the "SPA"), (ii) current report No. 19/2021 of 2 December 2021 on the fulfilment of the first condition precedent stipulated in the SPA, (iii) current report No. 21/2021 of 13 December 2021 on the fulfilment of another condition precedent stipulated in the SPA, (iv) current report No. 22/2021 of 17 December 2021 on the fulfilment of another condition precedent stipulated in the SPA, (v) current report No. 23/2021 of 31 December 2021 on the carve-out of Vivantis a.s. from the Mall Group a.s. capital group, (vi) current report No. 1/2022 of 13 January 2022 on the fulfilment of another condition precedent stipulated in the SPA, (vii) current report No. 4/2022 of 24 January 2022 on the extension of the merger approval proceedings conducted by the Polish antitrust authority, (viii) current report No. 5/2022 of 24 January 2022 on the fulfilment of another condition precedent stipulated in the SPA, (ix) current report No. 11/2022 of 2 March 2022 on the fulfilment of the final condition precedent stipulated in the SPA and (x) current report No. 15/2022 of 24 March 2022 on setting the date of the Closing, the Board of Directors (the "Board") of Allegro.eu (the "Company", "Allegro.eu") hereby informs that the Transaction has been completed and the transfer of legal title to the shares in Mall Group a.s. and WE|DO CZ s.r.o. (jointly the "Target") to Allegro.pl sp. z o.o., a Polish subsidiary of the Company ("Allegro.pl"), took place (the "Closing").

The Closing was preceded by fulfilment of conditions precedent set out in the SPA, which included: (i) obtaining consents of the appropriate antitrust authorities, i.e. Czech Republic, Republic of Poland, Slovak Republic, Republic of Slovenia, and Ukraine and (ii) obtaining FDI clearance in Republic of Slovenia. Pursuant to the issue of the current reports listed above, the Company informed on the completion of each and every one of these conditions precedent.

During the Closing:

- Allegro.eu has initially acquired 47 shares in Mall Group a.s. representing 47% of its share capital; and

- Allegro.pl has acquired the remaining shares in Mall Group a.s (53 shares representing 53% of the share capital) and all the shares in WE|DO CZ s.r.o.

As the carve-out of Vivantis a.s. took place prior to the Closing, this business has not been subject to the Transaction.

The Price for which the Target was acquired has been settled in the following way:

  1. The price for all the shares in WE|DO CZ s.r.o. has been paid by Allegro.pl in cash and amounted to EUR 14,000,000;
  2. The price for the 53 shares in Mall Group a.s. has been paid by Allegro.pl in cash and amounted to EUR 459,510,138;
  3. The price for the 47 shares in Mall Group a.s. acquired by Allegro.eu was left outstanding. In accordance with the SPA, EC Investments a.s., BONAK a.s. and Rockaway e-commerce a.s. (jointly the "Subscribers") and Allegro.eu at Closing entered into an interest free loan agreement on ("IFL Agreement") documenting the claim held by each of the Subscribers in the aggregate amount PLN 1,883,673,203.22;
  4. On Closing, Allegro.eu's share capital was increased by an amount of PLN 336,490.39 so as to raise it from its amount of PLN 10,232,558.14 to PLN 10,569,048.53 by creating and issuing a total number of 33,649,039 new ordinary shares (the "New Shares") each having a nominal value of PLN 0.01;
  5. The New Shares were paid up by the Subscribers through a cash contribution by off-set (compensation within the meaning of article 420-23 (5) of the Luxembourg law dated 10 August 1915 on commercial companies (as amended) against the claims arising out of the IFL Agreement, totalling up to PLN 1,883,673,203.22. The subscription price amounted to PLN 55.98 per New Share.

Taking into consideration the listing of Allegro.eu shares on the Warsaw Stock Exchange, the Board prepared a report on the increase of the Company's share capital through a cash contribution by off-set of receivables (in accordance with the procedure described above) which is referred to in Article 6a of the Polish Act of 29 July 2005 on Public Offering, the Conditions Governing the Introduction of Financial Instruments to Organised Trading, and on Public Companies. The report was then assessed by an auditor in terms of its authenticity and reliability. The Board's report and the auditor's evaluation report are attached to this report.

Moreover, immediately following the Closing, Allegro.eu made an in-kind contribution of the 47 shares in Mall Group a.s. to Adinan Midco S.à r.l., which in turn immediately made an in-kind contribution of the 47 shares in Mall Group a.s. to Allegro.pl.

Therefore, following the settlement of the Price, as of 1 April 2022 Allegro.pl owns 100% of shares in Mall Group a.s. and WE|DO CZ s.r.o. and Allegro.eu does not directly own any shares in the Target.

Moreover, Allegro indicates that in accordance with the SPA the Price still remains subject to the post-Closing price adjustment mechanism under which the final Price might be increased by up to EUR 50 million of price adjustment based on specific short-term objectives connected with EBITDA/GMV margin and GMV growth in the Target’s financial year 2022, ending on 31 March 2022. The potential amount of such increase shall be paid in cash after the completion of the statutory audit of the Target’s financial year ending 31 March 2022 which should be finalized within 6 months. However, in the Board's view application of this mechanism is unlikely. Nevertheless, if the price adjustment mechanism proves to be applicable, Allegro.eu will inform about the Price increase in a separate current report.

In addition, as a part of the Closing, the entire outstanding indebtedness of the Target towards its financing banks and former shareholders in the amount of approx. EUR 115.3 million has been settled with a loan from Adinan Midco S.à r.l.

Capitalized terms used but not defined in this current report have the meanings ascribed to them in current report No. 14/2021 of 4 November 2021.

Allegro.eu is a Luxembourg public limited liability company (société anonyme), registered office: 1, rue Hildegard von Bingen, L – 1282 Luxembourg, Grand Duchy of Luxembourg, R.C.S. Luxembourg: B214830.