Premier Investments Limited · ASX:PMV
Premier Investments — Merger or Acquisition (April 2008)
26 slides from Premier Investments's merger presentation, Apr 23, 2008
Slide 1: Investor presentation—Bidder's Statement for takeover of Just Group Limited
For personal use only Investor presentation— Bidder’s Statement for takeover of Just Group Limited 23 April 2008
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only This presentation has been prepared by Premier Investments Limited (“Premier”) for general information purposes only, without taking into account any investor's objectives, financial position or needs. This presentation is based on information co
Slide 3: Agenda
Agenda For personal use only 1 Implied value of what Just Shareholders will receive 2 Why Just Shareholders should accept the Offer 3 Other important considerations for Just Shareholders 2 2
Slide 4: Implied value of what Just Shareholders will receive
Implied value of what Just Shareholders will receive For personal use only Implied value receivable by Just Shareholders under Premier’s Offer per Just Share1 Value based on Premier’s NTA Value based on the (excluding Premier’s franking Premier Share surplus)2 one month VWAP3 What Just Shareholders
Slide 5: Why Just Shareholders should accept the Offer
Why Just Shareholders should accept the Offer For personal use only The Offer provides an attractive premium for Just Shareholders Just is facing a further weakening in the economic and retail environments within which it operates Given the existing economic environment, the implied multiples are pa
Slide 6: The Offer provides an attractive premium for Just Shareholders
The Offer provides an attractive premium for Just Shareholders Premier’s Offer represents a premium range of at least 16.0% to 26.8% For personal use only Implied takeover premium on a Cum Dividend Basis1 Premium based on Premier's NTA2 Premium based on the Premier Premier considers the closing shar
Slide 7: Just is facing a further weakening in the economic and retail environments
Just is facing a further weakening in the economic and retail environments For personal use only The economic background has deteriorated in recent months, and there is a risk that it might deteriorate further Weakening factors include: – declining consumer confidence; – decelerating retail sales gr
Slide 8: Declining consumer confidence
Declining consumer confidence For personal use only Australian consumer confidence International consumer confidence 110 110 105 105 100 100 95 95 90 90 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Austral
Slide 9: Decelerating retail sales growth
Decelerating retail sales growth The decline in consumer confidence is having a direct adverse impact on private consumption For personal use only Retail sales in the first two months of 2008 saw a significant deceleration in growth Several retailers have publicly stated challenging trading conditio
Slide 10: Input cost increases
Input cost increases Input costs have increased significantly over the last six to nine months For personal use only Commodity cost increases — oil Commodity cost increases — cotton 160 340 300 140 260 Rebased to 100 Rebased to 100 120 220 180 100 140 80 100 60 60 2004 2005 2006 2007 2008 2004 2005
Slide 11: Above trend inflation in China
Above trend inflation in China Inflation is on the rise in China, directly impacting the cost of imported goods For personal use only Chinese inflation 7% 5% 3% Year on year % growth 1% -1% -3% -5% 2004 2005 2006 2007 2008 China Consumer Price Index Source: OECD 10 10
Slide 12: Foreign currency risk
Foreign currency risk Depreciation of the Australian dollar would place further pressure on the cost of imported For personal use only goods Australian dollar vs US dollar 0.95 Historical Forward Australian dollar vs US dollar 0.85 0.75 0.65 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Source: R
Slide 13: Recent correction in debt and equity markets
Recent correction in debt and equity markets For personal use only Cost of corporate public debt Major share markets has increased have retreated 700 155 600 Credit default swap premium (basis points) 500 140 Rebased to 100 400 125 300 110 200 95 100 0 80 Feb-07 Aug-07 Feb-08 Jul-06 Jan-07 Jul-07 Ja
Slide 14: Recent correction in debt and equity markets
Recent correction in debt and equity markets The retail sector outperformed in the first nine months of 2007 but has retracted For personal use only gains since then Share market performance Share market performance between 1 January 2007 and between 1 October 2007 and the 1 October 2007 Offer Annou
Slide 15: Retail sector performance
Retail sector performance There has been a substantial contraction in the price to earnings multiples over the last six For personal use only months. The retail sector has retreated significantly from its prior outperformance Evolution of price to earnings multiples since 1 January 2007 21 19 1 year
Slide 16: Given the existing economic environment, the implied multiples are particularly attractive
Given the existing economic environment, the implied multiples are particularly attractive For personal use only Implied multiples for the Offer1 17.0x PE multiple– low (based on PE multiple– high (based on July 2008F EV/ $0.35 July 2008F EPS guidance $0.32 July 2008F EPS guidance by Just) EBITDA mu
Slide 17: Factors driving past acquisition multiples are not applicable here
Factors driving past acquisition multiples are not applicable here Average precedent retail sector For personal use only Private equity firms have been the acquirer in acquisition multiples¹ all major specialty retail acquisitions announced 9.0x 8.5x since 1 January 2005 8.0x Substantial increase in
Slide 18: Recent precedent multiples
Recent precedent multiples Precedent acquisition multiples1 Enterprise Value EV/LTM For personal use only Date2 Target Bidder (A$million) EBITDA Jun-01 Just Jeans Group Limited Catalyst Investment Managers 125 3.8x Nov-01 Pacific Brands CVC Asia Pacific Limited led consortium 730 6.0x Apr-03 OPSM Gr
Slide 19: Premier Shares are particularly attractive given the potential for a re-rating
Premier Shares are particularly attractive given the potential for a re-rating Premier has outperformed Just since Just’s listing with potential for substantial further For personal use only upside Premier TSR vs Just TSR since listing of Just (to the Offer Announcement Date) 350 Premier considers 3
Slide 20: Premier believes there is substantial share price upside in Premier Shares
Premier believes there is substantial share price upside in Premier Shares Premier believes it can bring substantial value to Just through its sector skills and experience For personal use only which will enhance Just’s long term strategic direction The Premier Board has decades of experience in the
Slide 21: Premier believes there is substantial share price upside in Premier Shares
Premier believes there is substantial share price upside in Premier Shares Premier shareholders can benefit from programs to unlock the value of Premier’s substantial For personal use only franking surplus Premier has a franking surplus of approximately $237 million Going forward, Premier intends to
Slide 22: Premier believes there is substantial share price upside in Premier Shares
Premier believes there is substantial share price upside in Premier Shares Premier expects liquidity to improve For personal use only Premier’s substantial A key objective of the Premier Board is to generate trading shareholders liquidity and to be admitted to the S&P/ASX 200 index Shareholder (%) A
Slide 23: Distinctions between Premier and other listed investment vehicles
Premier believes there is substantial share price upside in Premier shares There are a number of important distinctions between Premier and other listed investment For personal use only vehicles Investment policy focused on substantial expertise — retail, wholesaling, distribution and retail propert
Slide 24: Premier's Offer is the only offer available
Premier’s Offer is the only offer available For personal use only Premier’s Offer is the only offer currently available to Just Shareholders Metrepark holds 22.8% of Just Shares, Premier owns 0.9% of Just Shares Metrepark has indicated it currently intends to accept the Offer if by doing so Premier
Slide 25: Other important considerations for Just Shareholders
Other important considerations for Just Shareholders For personal use only Premier’s Offer is subject to only limited, standard conditions Potential CGT rollover relief on the share component of the consideration No brokerage fees 24 24
Slide 26: Conclusions
Conclusions For personal use only The Offer provides an attractive premium for Just Shareholders Just is facing a further weakening in the economic and retail environments within which it operates Given the existing economic environment, the implied multiples are particularly attractive The Offer pr
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