NOT FOR DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, HONG KONG OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.
Oslo, Norway, 23 April 2020: Reference is made to the stock exchange announcements published by XXL ASA ("XXL" or the "Company", OSE ticker code "XXL") on 1 April 2020 with key information relating to the proposed NOK 400 million underwritten share issue in the Company (the "Share Issue") and on 3 April 2020 by which notice of the Company's extraordinary general meeting to be held on 24 April 2020 to resolve the Share Issue (the "EGM") was published.
As set out in the EGM notice, the Company did not contemplate issuing tradeable subscription rights in connection with the Share Issue. When resolving to propose the Share Issue on 31 March 2020, the Board of Directors had two available transaction structures available:
(i) a fully underwritten rights issue with tradeable rights and in which the subscription price was to be set shortly before the EGM in line with market practice for rights issues, i.e. with a discount in the range of 30% to the theoretical ex rights share price; and
(ii) a fully underwritten share issue without tradeable rights directed at the shareholders of the Company at the date of the EGM and in which the subscription price was fixed at NOK 5, which represented at premium of 15% to the volume weighted share price the last five trading days prior to and including 31 March 2020.
Based on the Company’s financial position, the extraordinary situation and volatility in the equity capital markets, and the uncertainty relating to the effects for XXL of the COVID-19 pandemic, the Board of Directors was of the view that alternative (ii) with a fixed subscription price would provide stability and predictability and thus be in the best interest of all shareholders, including those who for any reason will not or cannot participate in the share issue with their pro rata portion.
The proposed Share Issue and the related debt refinancing announced on 1 April 2020 have been well received by the market.
Oslo Børs has in a letter to the Company dated 15 April 2020, which the stock exchange has published on its web page, criticised the Company for proposing not to issue tradeable subscription rights and thereby allegedly having breached section 8.2 of the listing rules for equities on Oslo Børs (the "Listing Rules"), and urged the Company to provide for tradable subscription rights in the Share Issue to be listed on Oslo Børs.
The Company is of the view that there is no legal basis for the position taken by Oslo Børs. Section 8.2 of the Listing Rules states that Oslo Børs as a main rule shall list preferential rights issued in rights offerings pursuant to section 10-4 of the Norwegian Public Limited Companies Act, but the rule does in the Company's view not place obligations on the listed companies, and does accordingly not require a listed company to issue tradable preferential rights when conducting a share issue directed at its shareholders.
Further, the initial proposed transaction structure (i.e. alternative (ii) above) would not have deprived value from any shareholders who are not able to participate in the Share Issue or resulted in any unequal treatment of shareholders. Those shareholders who would otherwise have preferred to sell preferential rights in order to fund participation in the Share Issue could under the proposed transaction structure have sold shares for the same purpose and thereby achieved the same result in terms of post transaction ownership. Alternatively, they could have sold shares before they traded ex rights and repurchased shares when they traded exclusive of the rights to participate in the Share Issue, and thereby cashed out the value of the subscription rights. Consequently, there is no basis for criticising the proposed structure from a commercial or shareholder treatment perspective.
Notwithstanding that there is in the Company’s view no legal basis for the criticism from Oslo Børs and that the proposed structure appears to have been well received by stakeholders, the underwriters of the Share Issue have in line with the request from Oslo Børs informed the Company that they will waive the condition relating to tradeable rights. On that basis, the Board of Directors has resolved to adjust the proposed resolution with respect to the Share Issue to be voted on under item 3 on the agenda for the EGM to be held on 24 April 2020 so that tradeable subscription rights will be issued in the Share Issue. The subscription price will remain fixed at NOK 5. It is expected that the subscription rights will be listed on Oslo Børs in the period from 4 May 2020 to 14 May 2020.
Shareholders who have already casted their votes with respect to item 3 on the agenda for the EGM to be held on 24 April 2020 (Share Issue) will be deemed to have voted with respect to the proposal under that agenda point as adjusted in accordance with the above, unless the votes are withdrawn or amended by email to genf@dnb.no prior to the EGM.
For further queries, please contact:
Investor Relations:
Tolle O. R. Grøterud
Tel: +47 90 27 29 59
E-mail:ir@xxlasa.com
About XXL ASA
XXL is a leading sports retailer with stores and e-commerce in Norway, Sweden, Finland, Denmark and Austria. It is the largest among the major sports retailers in the Nordics. XXL pursues a broad customer appeal, offering a one stop shop experience with a wide range of products for sports, hunting, skiing, biking and other outdoor activities. XXL’s concept is to have the largest stores with the best prices and the widest assortment of products, focusing on branded goods.
Important information
The release is not for publication or distribution, in whole or in part directly or indirectly, in or into Australia, Canada, Japan or the United States (including its territories and possessions, any state of the United States and the District of Columbia). This release is an announcement issued pursuant to legal information obligations, and is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. It is issued for information purposes only, and does not constitute or form part of any offer or solicitation to purchase or subscribe for securities, in the United States or in any other jurisdiction. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "US Securities Act"). The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the US Securities Act.
The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Copies of this announcement are not being made and may not be distributed or sent into Australia, Canada, Japan or the United States.
Any offering of the securities referred to in this announcement is made by means of a prospectus. This announcement is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (as amended) as implemented in any Member State. Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. If the proposed share issue is carried out, copies of a prospectus will be available from the Company's registered office and, subject to certain exceptions, on the websites of DNB Markets, a part of DNB Bank ASA (www.dnb.no/emisjoner) and Nordea Bank Abp, filial i Norge (www.nordeamarkets.com/xxl) (jointly, the "Managers").
Potential investors should read the prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with the decision to invest in the securities referred to in this announcement. The approval of the prospectus by the Norwegian Financial Supervisory Authority should not be understood as an endorsement of the securities offered or admitted to trading on the Oslo Stock Exchange.
The issue, subscription or purchase of shares in the Company is subject to specific legal or regulatory restrictions in certain jurisdictions. Neither the Company nor the Managers assume any responsibility in the event there is a violation by any person of such restrictions. The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
The Managers are acting for the Company and no one else in connection with the share issue and will not be responsible to anyone other than the Company providing the protections afforded to their respective clients or for providing advice in relation to the share issue and/or any other matter referred to in this release.
Forward-looking statements
This release and any materials distributed in connection with this release may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect the Company's current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.