Chinese Investor Consortium Reaches Agreement To Acquire Amer Sports

[Philpug]

From SGBMedia:

A consortium led by China’s Anta Sports made an offer to acquire Finland’s Amer Sports in a deal that values the company at €4.6 billion (US$5.23 billion) and Amer’s board is recommending shareholders approve the offer. The consortium plans to operate Amer Sports independently from Anta, with a separate board of directors.

Anta on September 12 made an all-cash offer to acquire Amer Sports, the owner of Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor.

The Investor Consortium consisting of Anta Sports, FountainVest Partners, Anamered Investments and Tencent announced a voluntary recommended public cash tender offer by the newly-incorporated Mascot Bidco Oy for all the issued and outstanding shares in Amer Sports Corporation. Anamered Investments is owned by Canadian billionaire Chip Wilson, founder of yoga apparel company Lululemon Athletica Inc .

KEY HIGHLIGHTS AND SUMMARY OF THE TENDER OFFER

• On December 7, 2018, Mascot Bidco Oy, members of an Investor Consortium including ANTA Sports, FV Fund and Anamered Investments, and Amer Sports signed a Combination Agreement under which Mascot Bidco Oy will make a voluntary recommended cash Tender Offer for all of the issued and outstanding shares in Amer Sports, excluding shares held by Amer Sports and its subsidiaries. ANTA Sports, FV Fund, Anamered Investments and Tencent (which will invest through Tencent SPV as a limited partner in FV Fund) form an Investor Consortium for the purposes of the Tender Offer, which indirectly will own 100 percent of Mascot Bidco Oy upon completion of the Tender Offer.
• The offer price under the Tender Offer is EUR 40.00 in cash per Amer Sports share.
• The offer price represents a premium of 39 percent compared to the closing price of Amer Sports shares on September 10, 2018 (the day prior to Amer Sports confirming the receipt of a non-binding preliminary indication from ANTA Sports and FountainVest), and a premium of 43 percent compared to the volume-weighted average price of Amer Sports shares during the 3-month period prior to and up to September 10, 2018.
• The terms of the Tender Offer value the entire issued and outstanding share capital of Amer Sports at EUR 4.6 billion.
• The Investor Consortium intends to invest significant time, resources and effort in helping Amer Sports to accelerate several important ongoing and new strategic initiatives under private ownership, including expanding Amer Sports’ businesses in the Chinese market.
• This includes investing capital and resources in product development and human talent on a global basis to provide Amer Sports’ existing management team and employees with the optimal platform from which to implement its medium- to long-term strategic plans. In doing so, Amer Sports will not only grow into a broader platform for Amer Sports’ employees to thrive on, but will also form stronger, mutually beneficial partnerships with all its stakeholders.
• The Investor Consortium intends to provide Amer Sports with access to ANTA Sports’ extensive distribution network, R&D resources and manufacturing and sourcing capabilities in China, such that Amer Sports will have a significant opportunity to accelerate the expansion of its businesses in the Chinese market.
• After the completion of the Tender Offer, the Investor Consortium plans for Amer Sports to be operated independently from ANTA Sports, with a separate Board of Directors. The Investor Consortium has invited Mr. Heikki Takala (President and CEO of Amer Sports) and his key executives to continue leading the business. Under the new ownership, Amer Sports’ management team would have the autonomy to execute on its business plan under the strategic direction of the Board of Directors.
• The completion of the Tender Offer is not expected to have an immediate material effect on the operations, assets, the position of the management or employees or the business locations of Amer Sports.
• The Investor Consortium currently expects to retain Amer Sports’ corporate head office in Helsinki after the completion of the Tender Offer.
• The following major shareholders of Amer Sports have, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer: Kaleva Mutual Insurance Company, Ilmarinen Mutual Pension Insurance Company, Mandatum Life Insurance Company Limited and Varma Mutual Pension Insurance Company, representing in aggregate approximately 7.91 percent of the issued shares and votes in Amer Sports. In addition, Maa- ja vesitekniikan tuki r.y., who hold approximately 4.29 percent of the issued shares and votes in Amer Sports, have expressed that they view the Tender Offer positively.
• The Board of Directors of Amer Sports has decided to unanimously recommend that Amer Sports’ shareholders accept the Tender Offer.
• Mascot Bidco Oy has, and will have on the closing date of the Tender Offer, access to debt and equity funding in sufficient amounts to finance the Tender Offer. The completion of the Tender Offer is not conditional upon availability of financing.
• A tender offer document with detailed information on the Tender Offer will be published on or about December 20, 2018. The offer period under the Tender Offer is expected to commence on or about December 20, 2018, and to run for approximately 10 weeks. Mascot Bidco Oy reserves the right to extend the offer period from time to time in accordance with the terms and conditions of the Tender Offer. The Tender Offer is currently expected to be completed during the second quarter of 2019 at the latest.
• The completion of the Tender Offer is subject to the satisfaction or waiver by Mascot Bidco Oy of certain conditions on or prior to Mascot Bidco Oy’s announcement of the final results of the Tender Offer including, among others, that approvals by the relevant regulatory authorities (including competition authorities) have been received and Mascot Bidco Oy having gained control of more than 90 percent of the issued and outstanding Amer Sports shares and voting rights.

Full Story HERE.

 

[Philpug]

Questions:

• Will it be business as usual for Salomon/Atomic?
• Will they still fund the race programs...considering they have the two best skiers in the world?
• Will production move to China?
• Will the focus be quality or quantity?
• Will this be the only major Chinese purchase?

 

[Ken_R]

So Amer Sports Owners/Investors want to cash out. Cant blame them. The stock has traded below $15 for the past 5 years until recently (first Q 2018).


https://www.amersports.com/investors/shareholders/largest-shareholders-and-ownership-structure/

 

[LKLA]

It is a very fair offer more so in the context of the very high exposure to more cyclical equipment and relatively slower growth vs. the broader sporting goods sector.

Besides ANTA and Fountainvest, investors include Tencent and the investment vehicle of Chip Wilson, founder of Lululemon.

As of now, ANTA has stated that it Amer Sports will continue to operate independently and have the autonomy to execute on its business plan and that key management will continue leading the business.

 

[Tricia]

And what about arc'teryx, Armada.......

 

[DoryBreaux]

Thats big. I hope it's business as usual.

 

[Philpug]

Thats big. I hope it's business as usual.

Hope is not a business strategy.

 

[LKLA]

China has over 700 ski resorts AND skier visits are growing at a whopping 16%. Makes sense for them to be looking at Amer Sports.

 

[n443]

Questions:

• Will production move to China?
• Will the focus be quality or quantity?

Answer:
The Investor Consortium intends to provide Amer Sports with access to ANTA Sports’ extensive distribution network, R&D resources and manufacturing and sourcing capabilities in China, such that Amer Sports will have a significant opportunity to accelerate the expansion of its businesses in the Chinese market

 

[Chris Axebiker]

Trade war just made all that stuff jump in price if it wasn’t already affected.

 

[Ken_R]

I think Arcteryx already makes most of their produucts in China.

 

[James]

Oh Joy.