Atlan buys out Heinemann’s 15% shareholding in Malaysian duty free retailer DFZ

MALAYSIA. Atlan Holdings Bhd yesterday concluded an agreement to regain 100% control of its duty free retail arm DFZ Capital Sdn Bhd by acquiring a 15% holding plus one share from Heinemann Asia Pacific Pte Ltd for RM45.8 million (US$10.86 million/€9.62 million).

Yesterday’s acquisition was made by Duty Free International Ltd (DFI), a wholly-owned unit of Atlan. DFI also settled an outstanding trade payable due to Heinemann Asia Pacific of US$4.19 million (€3.72 million/RM17.73 million).

As reported, DFI sold a 10% stake in DFZ to Heinemann Asia Pacific in March 2016 for €19.7 million, followed by the exercise of a call option which resulted in the sale of another 5% stake for €9.85 million in 2017.

In line with the termination deed with Heinemann Asia Pacific, DFI purchased 31,494,575 ordinary shares (the Sale Shares) in the capital of DFZ. The deed also provided for the termination of ancillary agreements entered into in June 2016 between DFZ and Heinemann Asia Pacific relating to the supply of duty free products.

DFZ operates duty free and duty free paid stores in various locations across Peninsular Malaysia including Kuala Lumpur International Airport, Padang Besar, Langkawi, Bukit Kayu Hitam and Johor Bahru.

(Above and below) Led by The Zon Duty Free, DFI’s key retail brand, DFZ operates a wide variety of stores across Malaysia

Atlan said the Consideration was arrived at by arm’s length negotiations, based on the agreed fair value of the Sale Shares. DFI and Heinemann Asia Pacific had jointly commissioned an independent valuer, Deloitte and Touche Financial Advisory Services to perform independent fair valuation services in connection to the acquisition.

Based on a valuation letter issued on 11 November 2021, the Consideration is within the valuation range between RM15 million and RM54 million, Atlan said in a note to the Bursa Malaysia stock exchange. The valuation was carried out based on a few scenarios agreed between the two companies. The primary approach adopted was the income approach, corroborated by a market approach.

“The consideration was satisfied in cash and funded from DFI’s internal resources,” said Atlan. “The acquisition is part of the business optimisation strategy in relation to the current business environment.

“The acquisition will enable DFI to hold 100% equity interest in DFZ so as to have absolute control in the conduct of the business and affairs of DFZ and its subsidiaries,” it added.

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