World Duty Free: Three potential buyers
today Mar 24, 2015
A short list is emerging for the sale of World Duty Free (WDF). Following research and discussions that began at the beginning of this year, three candidates remain in contention to take over the airport duty-free retailer, 50.1% of which is owned by the Benetton family through its holding company Edizione: South Korea's Lotte, China’s Sunrise Duty Free and Switzerland’s Dufry, which has allied itself, according to Reuters, with Qatar Investment Authority.
Having acquired Nuance last year for 1.55 billion Swiss francs, Dufry is currently the world's number 1 in the duty-free shop sector with a 14.9% market share. According to Reuters, which has based its report upon two sources familiar with the matter, Qatar’s wealth investment fund QIA (Qatar Investment Authority) has partnered with Dufry in order to submit a joint bid.
Although in an initial phase the Benetton family wanted to cede a little less than 30% while remaining a stakeholder in WDF, it now plans to sell its entire stake. Consequently, whichever company purchases 50.1% of World Duty Free, it will be required to launch a mandatory tender offer for 100% of the group.
The World Number 2 in "travel retail”, with an estimated 8% market share, WDF is valued on the stock market at 2.7 billion euros.
In this context, the process should take additional time, potential buyers needing more time to develop a financial plan on this scale. World Duty Free should choose a potential buyer by summer to enter into exclusive negotiations, with the transaction to be concluded by the end of the year.
The South Korean company Lotte Group was founded by Japanese businessman Shin Kyuk-Ho and is active in the duty-free retail business through its Lotte Duty Free Shop chain, while China’s Sunrise Duty Free is present in airports in Shanghai and Beijing. French company Lagardère, which was initially interested in the opportunity; meanwhile, seems to have desisted.
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