23 May 2014 announcement

233 Pages·2014·3.38 MB·English

ASX AND MEDIA RELEASE Page 1 of 1

For Immediate Distribution 23 May 2014

DAVID JONES SCHEME BOOKLET REGISTERED WITH ASIC

David Jones Limited (DJS) today announced that the Australian Securities and Investments Commission
has registered the Scheme Booklet in relation to the previously announced Scheme of Arrangement
(‘Scheme’) under which Woolworths Holdings Limited will acquire all of the shares in David Jones.

A copy of the Scheme Booklet, including the Independent Expert’s Report, is attached to this
announcement. Printed copies of the Scheme Booklet, including the Independent Expert’s Report, will be
sent to David Jones shareholders over the next week (and those shareholders who have previously
nominated an electronic means of notification will be able to access the materials electronically).

The David Jones Board continues to unanimously recommend that David Jones shareholders vote in
favour of the Scheme at the upcoming Scheme Meeting to be held on 30 June 2014, in the absence of a
superior proposal.

Media Enquiries Shareholder Enquiries
Helen Karlis Shareholder Information Line
General Manager Corporate Affairs, Computershare
Communications and Investor Relations Within Australia: 1300 580 123
David Jones Limited Outside Australia: [phone]
02 9266 5960 Operational Monday to Friday from 9:00 am to
0404 045 325 5:00pm
[email protected]

ENDS

David Jones Limited A.C.N. 000 074 573
A.B.N. 75 000 074 573
this is an important DocumEnt anD rEQuirEs your immEDiatE attEntion
you shoulD rEaD it carEfully anD in its EntirEty bEforE
DEciDing whEthEr or not to votE in favour of thE schEmE
if you arE in any Doubt as to what you shoulD Do, you shoulD
consult your brokEr, financial aDvisEr or lEgal aDvisEr immEDiatEly
DAVID JONES
SCHEME BOOKLET
IN RELATION TO A PROPOSAL FROM VELA INVESTMENTS PTY LTD,
A SUBSIDIARY OF WOOLWORTHS HOLDINGS LIMITED (SOUTH AFRICA),
TO ACqUIRE ALL THE ORDINARY SHARES IN DAVID JONES LIMITED
BY WAY OF SCHEME OF ARRANGEMENT
YOUR DIRECTORS UNANIMOUSLY RECOMMEND
THAT YOU VOTE IN FAVOUR OF THE SCHEME,
IN THE ABSENCE OF A SUPERIOR PROPOSAL
Each DirEctor intEnDs to votE thE DaviD JonEs sharEs
thEy own or control in favour of thE schEmE,
in thE absEncE of a supErior proposal
A Notice of Scheme Meeting is included as Annexure F to this Scheme Booklet,
and a proxy form for the Scheme Meeting accompanies this Scheme Booklet.
The Scheme Meeting will be held at 10.00am (Sydney time) on Monday 30 June 2014
at the Wesley Conference Centre, 220 Pitt Street Sydney.
FINANCIAL ADVISERS LEGAL ADVISER
DAVID JONES LIMITED ACN 000 074 573
DAVID JONES SCHEME BOOKLET
important noticEs
nature of this document Disclaimer as to forward looking statements
This Scheme Booklet includes the explanatory statement for the Scheme required by Some of the statements appearing in this Scheme Booklet (including in the Independent
subsection 412(1) of the Corporations Act. Expert’s Report) may be in the nature of forward looking statements. All forward
This Scheme Booklet provides David Jones Limited Shareholders (David Jones looking statements in this Scheme Booklet (including in the Independent Expert’s
Shareholders) with information about the proposed acquisition of David Jones Report) reflect views only as at the date of this Scheme Booklet, and generally may
Limited (David Jones) by Vela Investments Pty Ltd (Vela Investments), a subsidiary of be identified by the use of forward looking words such as “believe”, “aim”, “expect”,
Woolworths Holdings Limited (Woolworths). “anticipate”, “intending”, “foreseeing”, “likely”, “should”, “planned”, “may”, “estimate”,
“potential”, or other similar words. Similarly, statements that describe the objectives,
If you have sold all of your David Jones Shares, please ignore this Scheme Booklet. plans, goals or expectations of David Jones, Vela Investments or Woolworths are or
Defined terms may be forward looking statements. You should be aware that such statements are
only predictions and are subject to inherent risks and uncertainties. Those risks and
A number of defined terms are used in this Scheme Booklet. These terms are
uncertainties include factors and risks specific to the industry in which David Jones,
capitalised and have the meanings set out in Section 13.
Vela Investments and Woolworths operate, as well as general economic conditions,
A number of figures, amounts, percentages, prices, estimates, calculations of value and prevailing exchange rates and interest rates and conditions in the financial markets.
fractions in this Scheme Booklet are subject to the effect of rounding. Accordingly, Actual events or results may differ materially from the events or results expressed or
their actual calculations may differ from the calculations set out in this booklet. implied in any forward looking statement. None of David Jones, Vela Investments,
important notice associated with federal court order under Woolworths, their respective subsidiaries or their respective directors, officers and
subsection 411(1) of the corporations act employees, any persons named in this Scheme Booklet with their consent, or any
person involved in the preparation of this Scheme Booklet, makes any representation
The fact that under subsection 411(1) of the Corporations Act, the Federal Court has
or warranty (express or implied) as to the likelihood of fulfilment of any forward
ordered that the Scheme Meeting be convened and has approved the explanatory
looking statement, or any events or results expressed or implied in any forward
statement required to accompany the Notice of Scheme Meeting does not mean
looking statement, except to the extent required by law. You are cautioned not to
that the Federal Court:
place reliance on any forward looking statement.
• has formed any view as to the merits of the proposed Scheme or as to how
responsibility statements
eligible David Jones Shareholders should vote (on this matter eligible David Jones
Shareholders must reach their own decision); or David Jones has been solely responsible for preparing this Scheme Booklet, and the
Woolworths Group and its directors and officers do not assume any responsibility for
• has prepared, or is responsible for the content of, the explanatory statement.
the accuracy or completeness of this Scheme Booklet, except that:
no endorsement
• Woolworths has been solely responsible for preparing the Woolworths Information.
The fact that under subsection 411(1) of the Corporations Act, the Federal Court has David Jones and its directors and officers do not assume any responsibility for the
ordered that the Scheme Meeting be convened is not an endorsement of, or other accuracy or completeness of any Woolworths Information;
expression of opinion on, the Scheme.
• Ernst & Young has prepared the Tax Adviser’s Report in relation to the Scheme
asic and asX and takes responsibility for that report. David Jones and its directors and officers do
A copy of this Scheme Booklet was provided to ASIC for examination in accordance not assume any responsibility for the accuracy or completeness of the Tax Adviser’s
with section 411(2)(b) of the Corporations Act, and was lodged with ASIC for Report. The Tax Adviser’s Report is set out in Section 10; and
registration under section 412(6) of the Corporations Act. It was then registered • Grant Samuel & Associates Pty Limited has prepared the Independent Expert’s
by ASIC under section 412(6) of the Corporations Act before being sent to David Report in relation to the Scheme and takes responsibility for that report. David
Jones Shareholders. Jones and its directors and officers do not assume any responsibility for the accuracy
ASIC has been requested to provide a statement in accordance with section 411(17) or completeness of the Independent Expert’s Report, except in the case of David
(b) of the Corporations Act that ASIC has no objection to the Scheme. If ASIC Jones in relation to the information which it has provided to the Independent
provides that statement, it will be produced to the Federal Court at the time of the Expert. The Independent Expert’s Report is set out in Annexure B.
Second Court Hearing to approve the Scheme. Neither ASIC nor any of its officers charts, maps and diagrams
takes any responsibility for the contents of this Scheme Booklet.
Any diagrams, charts, maps, graphs and tables appearing in this Scheme Booklet are
A copy of this Scheme Booklet has been provided to ASX. Neither ASX nor any of its illustrative only and may not be drawn to scale. Unless stated otherwise, all data
officers take any responsibility for the contents of this Scheme Booklet. contained in diagrams, charts, maps, graphs and tables is based on information
no account of personal circumstances available as at the Last Practicable Date.
This Scheme Booklet and the recommendations contained in it should not be taken references to time
as, and do not constitute, personal financial advice as they do not take into account Unless otherwise stipulated, all references to time in this Scheme Booklet are to
your individual objectives, financial and taxation situation or particular needs. As such, Sydney time.
your Directors encourage you to seek independent financial and taxation advice
privacy
before making any investment decision and any decision as to whether or not to vote
in favour of the Scheme. David Jones, Vela Investments and Woolworths may collect personal information
in the process of implementing the Scheme. The type of information that they may
not an offer
collect about you includes your name, contact details and information on your security
This Scheme Booklet does not constitute or contain an offer to David Jones holding in David Jones and the names of persons appointed by you to act as a proxy,
Shareholders, or a solicitation of an offer from David Jones Shareholders, in any attorney or corporate representative at the Scheme Meeting. The primary purpose of
jurisdiction. the collection of personal information is to assist David Jones, Vela Investments and
foreign jurisdictions Woolworths to conduct the Scheme Meeting and implement the Scheme. Without this
information, David Jones, Vela Investments and Woolworths may be hindered in their
The release, publication or distribution of this Scheme Booklet in jurisdictions other
ability to issue this Scheme Booklet and implement the Scheme. Personal information of
than Australia may be restricted by law or regulation in such other jurisdictions and
the type described above may be disclosed to the David Jones Share Registry, print and
persons outside Australia who come into possession of this Scheme Booklet should
mail service providers, authorised securities brokers and the David Jones Group, Vela
seek advice on and observe any such restrictions. Any failure to comply with such
Investments and Woolworths. If you would like to obtain details of information about
restrictions may constitute a violation of applicable laws or regulations.
you held by David Jones, please contact the David Jones Share Registry.
This Scheme Booklet has been prepared in accordance with Australian law and the
Date
information contained in this Scheme Booklet may not be the same as that which
would have been disclosed if this Scheme Booklet had been prepared in accordance This Scheme Booklet is dated 22 May 2014.
with the laws and regulations outside Australia.
DAVID JONES SCHEME BOOKLET
1
contEnts
of this schEmE
booklEt
1 Key Dates Relating to the Transaction 3
2 Letter from the Chairman of David Jones 4
3 Introduction 6
4 Key Considerations Relevant to Your Vote 7
5 Frequently Asked questions 12
6 Overview of the Transaction for David Jones Shareholders 16
7 Information about the David Jones Group 20
8 Information about Vela Investments and Woolworths Group 26
9 Risk Factors 34
10 Tax Considerations 37
11 Information Relating to David Jones Directors 43
12 Additional Information 44
13 Glossary and Interpretation 49
annexure a – ASX Announcements by David Jones since 25 January 2014
(being the last date for the 26 week period relating to the David Jones Half Year (1H14) Financial Report) 54
annexure b – Independent Expert’s Report 55
annexure c – Scheme Implementation Deed 146
annexure D – Scheme of Arrangement 197
annexure E – Deed Poll 214
annexure f – Notice of Scheme Meeting 225
DAVID JONES SCHEME BOOKLET
2
1
kEy DatEs
rElating to thE
transaction
Event Date
Woolworths Shareholder Meeting Tuesday 17 June 2014
Latest time and date for receipt of proxy forms (including proxies 10.00am on Saturday 28 June 2014
lodged online), powers of attorney or certificates of appointment of
body corporate representative by the David Jones Share Registry1
for the Scheme Meeting
Time and date for determining eligibility to vote at the Scheme Meeting 7.00pm on Saturday 28 June 2014
The Scheme Meeting to be held at the Wesley Conference Centre, 10.00am on Monday 30 June 2014
220 Pitt Street, Sydney
if the scheme is agreed to by the requisite majorities of David Jones shareholders:
Second Court Date (for approval of the Scheme) Wednesday 2 July 2014
Outcome of Second Court Hearing announced to ASX Wednesday 2 July 2014
Effective Date (Federal Court order lodged with ASIC and Thursday 3 July 2014
announcement by David Jones to ASX)
David Jones Shares suspended from trading on ASX Close of trading on
Thursday 3 July 2014
Scheme Record Date (for determining entitlements to Thursday 10 July 2014
Scheme Consideration)
Implementation Date (for despatching Scheme Consideration Thursday 17 July 2014
to Scheme Shareholders)
Scheme Consideration will be sent to Scheme Shareholders Thursday 17 July 2014
(by either cheque or electronic funds transfer into the nominated
bank accounts used for dividend payments)
All dates in the above timetable are indicative only and are subject to change. The actual timetable will depend
on many factors outside the control of David Jones, including approvals from the Federal Court of Australia (New
South Wales registry) and other regulatory authorities. Any changes will be announced by David Jones on ASX and
published on David Jones’ website at http://www.davidjones.com.au/For-Investors/ASX-and-Media-Releases.
1 The latest time and date for hand delivery of proxy forms, powers of attorney or certificates of appointment of body corporate representative will be 5.00pm on friday 27 June
2014. However, for simplicity of explanation, elsewhere in this Scheme Booklet, when referring to the latest time and date for receipt of proxy forms (including proxies lodged
online), powers of attorney or certificates of appointment of body corporate representative, the relevant time is referred to as being 10.00am on Saturday 28 June 2014.
DAVID JONES SCHEME BOOKLET
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2
lEttEr from
thE chairman of
DaviD JonEs
22 May 2014
Dear David Jones shareholder,
On 9 April 2014, David Jones announced that it had entered into the Scheme Implementation Deed with the South
African based retail group Woolworths in relation to a scheme of arrangement between David Jones and the David
Jones Shareholders.
Under the Scheme Implementation Deed, if all Conditions Precedent are satisfied or waived (as applicable) and the
Scheme proceeds, Woolworths will acquire all of the David Jones Shares outstanding for A$4.00 cash per Share.
You are receiving this Scheme Booklet because you are currently a David Jones Shareholder. So long as you remain
a David Jones Shareholder on the Scheme Record Date, which is currently expected to be Thursday 10 July 2014,
and the Scheme becomes Effective, you will receive A$4.00 cash for each David Jones Share you hold on the Scheme
Record Date. David Jones Shareholders will not pay any brokerage or stamp duty on the transfer of their David Jones
Shares under the Scheme.
Your Directors believe that the Scheme provides an opportunity for David Jones Shareholders to realise certain cash
proceeds at a significant premium. The Scheme Consideration of A$4.00 per David Jones Share represents:
• a 25.4% premium to the closing price of David Jones Shares of A$3.19 on 8 April 2014, the last trading day prior to
the announcement of the Woolworths proposal;
• a 39.4% premium to the closing price of David Jones Shares of A$2.87 on 30 January 2014, the last closing price prior
to the Myer proposal becoming public;
• a 26.8% premium to the 3 month volume weighted average price of David Jones Shares up to and including 8 April
2014;
• a multiple of 20.8x the reported FY13 EPS of 19.2 cents per David Jones Share and 23.8x the estimated FY14 EPS
of 16.8 cents per David Jones Share based on consensus broker estimates as at 8 April 2014;2 and
• an implied market capitalisation of A$2,149 million.
your Directors unanimously recommend that you vote in favour of the scheme at the upcoming scheme
Meeting on Monday 30 June 2014, in the absence of a Superior Proposal. Subject to that same qualification,
your Directors intend to vote all the David Jones shares held or controlled by them in favour of the
scheme.
In reaching this conclusion, your Directors considered a number of alternatives, including standalone value creation
opportunities, realising the value of the freehold properties owned by David Jones, or pursuing a merger with Myer.
On 9 April 2014, following the announcement of the Scheme, Myer announced to ASX that it was withdrawing its
proposed merger of equals.
The Independent Expert, Grant Samuel & Associates Pty Limited, has assessed the full underlying value of David
Jones to be in the range of A$3.73 to A$4.14 per Share, and has concluded that the Scheme is fair and reasonable
and, therefore, is in the best interests of David Jones Shareholders, in the absence of a Superior Proposal. The
Scheme Consideration of A$4.00 per Share is within this range. The reasons why the Independent Expert reached this
conclusion are set out in the Independent Expert’s Report, a copy of which is included in Annexure B.
2 FY13 EPS adjusted for the A$6.4m NPAT impact of the Dick Smith transaction. FY14F EPS consensus of 16.8 cents per share as per Bloomberg on 8 April 2014.
DAVID JONES SCHEME BOOKLET
4
The David Jones Board believes that David Jones is well positioned to deliver growth for David Jones Shareholders into
the future. However, the David Jones Board was unanimous in its decision to recommend Woolworths’ proposal, in the
absence of a Superior Proposal. Your Directors believe that the significant premium and overall terms and conditions
of Woolworths’ cash offer present an excellent opportunity which realises value for David Jones Shareholders.
The Scheme requires the approval of David Jones Shareholders and the Federal Court of Australia. The Scheme is
also subject to certain other Conditions Precedent as described in Section 6.6, including Woolworths Shareholder
Approvals.
The reasons to vote in favour of the Scheme Resolution required to implement the Scheme are set out in detail in
Section 4.2. There are also reasons why you may choose to vote against the Scheme Resolution required to implement
the Scheme, which are set out in Section 4.3.
If the Scheme is not implemented, David Jones will continue as an independent entity listed on ASX and David Jones
Shareholders will not receive the Scheme Consideration of A$4.00 per David Jones Share. If the Scheme does not
proceed, and no Superior Proposal emerges, your Directors consider that the market price of David Jones Shares is
likely to fall.
Your vote is important, and I strongly encourage you to vote on this significant transaction. You may vote by attending
the Scheme Meeting to be held on Monday 30 June 2014 at the Wesley Conference Centre, 220 Pitt Street, Sydney,
commencing at 10.00am, or by appointing a proxy or attorney to attend the Scheme Meeting and vote on your behalf.
A Scheme Meeting Proxy Form is provided with this Scheme Booklet. Alternatively, you may lodge a proxy online by
logging onto www.investorvote.com.au.
I encourage you to read this Scheme Booklet carefully and in its entirety, as it contains important information that
will need to be considered before you vote on the Scheme Resolution required to implement the Scheme. I also
encourage you to seek independent legal, financial, taxation or other professional advice before making an investment
decision in relation to your David Jones Shares.
If you have any questions about the Scheme, please contact the David Jones Shareholder Information Line on 1300
580 123 (from within Australia) or [phone] (from outside Australia) Monday to Friday between 9:00am to
5:00pm (Sydney time), or contact your legal, financial, taxation or other professional adviser.
I would also like to take this opportunity to thank you for your continued support of David Jones.
Yours sincerely,
Gordon Cairns
Chairman
DAVID JONES SCHEME BOOKLET
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3
introDuction
3.1 what is the transaction?
The Transaction involves Woolworths (through its Australian subsidiary, Vela Investments) acquiring all of the David
Jones Shares on issue. The Transaction will be implemented by way of a scheme of arrangement between David Jones
and its Shareholders.
If you are a David Jones Shareholder and the Scheme becomes Effective, you will receive the Scheme Consideration
of A$4.00 cash for each Scheme Share.
In order for the Scheme to proceed, the Scheme Resolution approving the Scheme must be passed by the requisite
majorities of David Jones Shareholders at the Scheme Meeting to be held on Monday 30 June 2014. The Scheme is also
subject to the satisfaction or waiver of various Conditions Precedent (as applicable), as summarised in Section 6.6.
3.2 what should i do?
you should read this booklet carefully in its entirety, including the reasons to vote in favour or against the
scheme (as set out in section 4), before making any decision on how to vote on the scheme resolution.
Answers to various frequently asked questions about the Transaction are set out in Section 5. If you have any additional
questions about this Scheme Booklet or the Transaction / Scheme, please contact the David Jones Shareholder Information
Line on 1300 580 123 (from within Australia) or [phone] (from outside Australia) Monday to Friday between
9:00am to 5:00pm (Sydney time), or contact your legal, financial, taxation or other professional adviser.
3.3 what is the Directors’ recommendation?
your Directors unanimously recommend that you vote in favour of the scheme at the upcoming scheme
meeting on monday 30 June 2014, in the absence of a superior proposal.
The Directors intend to vote all of the David Jones Shares held or controlled by them in favour of the Scheme Resolution,
in the absence of a Superior Proposal.
The Directors believe that the reasons for David Jones Shareholders to vote in favour of the Scheme Resolution outweigh
the reasons to vote against it, in the absence of a Superior Proposal. These reasons and other relevant considerations are
set out in Section 4.
The Directors note that the Independent Expert has concluded that the Scheme is fair and reasonable and, therefore,
is in the best interests of David Jones Shareholders, in the absence of a Superior Proposal. You should also read the
Independent Expert’s Report which is contained in Annexure B.
3.4 am i entitled to vote?
If you are registered as a David Jones Shareholder on the Share Register at 7:00pm on Saturday 28 June 2014, you will
be entitled to attend and vote at the Scheme Meeting to be held on Monday 30 June 2014.
3.5 how do i vote on the scheme?
you can vote on the scheme resolution at the upcoming scheme meeting on monday 30 June 2014 in any
of the following ways.
You can vote:
• in person, by attending the Scheme Meeting at the Wesley Conference Centre, 220 Pitt Street, Sydney at 10:00am
on Monday 30 June 2014;
• by appointing a proxy or attorney to attend the Scheme Meeting and vote on your behalf:
- by lodging a proxy online via www.investorvote.com.au;
- by mailing the enclosed Scheme Meeting Proxy Form to Computershare Investors Services Pty Limited, GPO
Box 242 Melbourne Victoria 3001;
- by faxing the enclosed Scheme Meeting Proxy Form to 1800 783 447 (within Australia) and [phone]
(outside Australia); or
- by hand delivering3 the enclosed Scheme Meeting Proxy Form to the David Jones Share Registry at Level 4,
60 Carrington Street, Sydney NSW 2000.
To be valid, a proxy must be received by the David Jones Share Registry by 10.00am (Sydney time) on Saturday
28 June 2014, other than such proxies delivered by hand which must be received by the David Jones Share Registry
by 5.00pm (Sydney time) on Friday 27 June 2014.
3 Please note that hand deliveries may only be made Monday to Friday between the hours of 9.00am and 5.00pm (Sydney time).
DAVID JONES SCHEME BOOKLET
6
4
kEy consiDErations
rElEvant to your votE
4.1 summary of reasons why you might vote for and against the scheme
(a) reasons to vote in favour of the scheme
✔
Your Directors unanimously recommend that you vote in favour of the Scheme,
in the absence of a Superior Proposal
✔
The Independent Expert has concluded the Scheme is fair and reasonable and, therefore,
is in the best interests of Shareholders, in the absence of a Superior Proposal
✔
A$4.00 cash represents a significant premium for your David Jones Shares
✔
The A$4.00 cash per David Jones Share payable under the Scheme would provide
you with the certainty of cash for your David Jones Shares
✔
No Superior Proposal has emerged as at the date of this Scheme Booklet
✔
If the Scheme does not proceed and no Superior Proposal emerges, the David Jones
Share price is likely to fall
✔
If the Scheme does not proceed, and no Superior Proposal emerges, David Jones
Shareholders will continue to be subject to the specific risks associated with David
Jones’ business and other general risks
✔
No brokerage or stamp duty is payable on the transfer of your David Jones Shares
under the Scheme
Reasons to vote in favour of the Scheme are discussed in more detail in Section 4.2.
(b) reasons to vote against the scheme
✗
You may disagree with the recommendation of your Directors and the conclusions of
the Independent Expert
✗
If the Scheme proceeds, you will no longer be a David Jones Shareholder and you
will not participate in any potential upside that may result from being a David Jones
Shareholder
✗
You may consider that there is potential for a Superior Proposal to emerge
✗
The tax consequences of the Scheme for you may not be suitable to your financial
position
Reasons to vote against the Scheme are discussed in more detail in Section 4.3.
DAVID JONES SCHEME BOOKLET
7