Super Retail to buy Rebel from Archer

18 Oct '11

5 min read

Super Retail expects the acquisition to meet its return on capital hurdle of 20% within five years. The acquisition is expected to deliver mid single digit EPS accretion in FY12 (pre-synergies).

The Group intends to maintain Rebel as a separate division known as Sports Retailing based in Sydney. Over time, and after a thorough integration planning process, the Group will seek to derive supply chain efficiencies through leveraging the expertise and capabilities of the combined businesses.

The Entitlement Offer comprises a fully underwritten accelerated renounceable institutional entitlement offer and a fully underwritten renounceable retail entitlement offer that includes the ability for eligible retail shareholders to trade their Entitlements on the ASX.

The Offer Price of $5.34 represents a discount of 17.8% to the closing price of Super Retail shares on 14 October 2011, a discount of 14.6% to the one month volume weighted average share price of Super Retail shares and a 12.8% discount to the theoretical ex-entitlements price ("TERP").

Eligible shareholders will be able to purchase 9 New Shares for every 19 existing Super Retail shares held on the Record Date of 7.00pm (AEST) on 20 October 2011.

Eligible shareholders are those holders of Super Retail shares who:

•are registered as the holder of shares as at 7.00pm AEST on the Record Date;
•are not in the United States (other than Eligible US Fund Managers); and
•are eligible under all applicable securities laws to receive an offer under the Entitlement Offer.

Super Retail Group's largest shareholder, SCA FT Pty Limited (ACN 010 721 614)(2) ("SCA FT") holding 40.98% of Super Retail Group's shares prior to the Entitlement Offer, will participate in the Institutional Entitlement Offer and has committed to take up 11.0% of its entitlements and renounce the balance. New Shares in respect of those renounced entitlements will be sold as part of the institutional shortfall bookbuild.

The Group's shares have been placed in trading halt whilst the institutional component of the Entitlement Offer is undertaken.

New Shares issued under the Entitlement Offer will rank equally with existing Super Retail ordinary shares on issue.

Commenting on the equity raising, the Group Chairman, Mr Robert Wright said, "We are very pleased to present such an exciting opportunity for shareholders to participate in the future growth of Super Retail through the Entitlement Offer. The acquisition of Rebel continues to build on the Group's acquisition successes and will position the Group as one of Australia's leading retailers, with strong growth prospects in attractive markets."

"The Board is pleased to be implementing a structure that provides flexibility for all of our shareholders."

The Group's financial adviser is Greenhill Caliburn and its legal adviser is Mallesons Stephen Jacques. Macquarie Capital (Australia) Limited and RBS Equity Capital Markets (Australia) Limited are joint lead managers and underwriters to the Entitlement Offer (the "Underwriters").

Rebel is Australia's largest sports retailer with 128 stores across Australia under the Rebel (90 stores), Amart (36 stores) and Performance Sport (2 stores) banners. Rebel was created through the combination of three iconic Australian sports stores chains, Amart All Sports (acquired in 2004), Rowe & Jarman (acquired in 2005) and Rebel Sport (acquired in 2007).

Super Retail Group

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