Campari sells villa Les Cedres and concludes the process of divestment of non-strategic activities relating to the acquisition of Grand Marnier. The company has reached an agreement for the sale of the real estate property in Saint-Jean-Cap-Ferrat in France. The villa had entered the group’s perimeter in the context of the acquisition of Grand Marnier in 2016 and was publicly put up for sale immediately after the completion of the transaction, as required by an agreement entered into with the sellers of Grand Marnier, as it was not considered strategic for the main spirits business.
The sale price of the villa, based on the preliminary agreement, is equal to 200 million euros, of which Campari retains 80 million. The Villa represents an exclusive 188 year old property, consisting of an 18,000 square meter house and an approximately 14 hectare estate, an exceptional combination of history, luxury and excellent location along the coast of Saint-Jean-CapFerrat in the south of France.
Built in 1830, it also belonged to the King of Belgium Leopold II and was subsequently acquired by the Marnier-Lapostolle family in 1924. For almost 100 years the family has built and cared for one of the most prestigious botanical gardens in the world. The ownership passed to Campari through the friendly public purchase offer of Societe des Produits Marnier-Lapostolle in 2016.
Campari has also undertaken to pay all shareholders of Societe des Produits Marnier-Lapostolle, in addition to the offer price, a potential price supplement in the event of a successful conclusion of the villa sale agreement under certain conditions. In particular, the price supplement is equal to the difference between the net sale price of the Villa (net price to be determined on the basis of the terms established by the public offer) and an agreed minimum threshold of 80 million, which will be withheld by Campari. The conclusion of the transaction is expected by October 31 and is subject to certain conditions precedent, including the availability of the property currently inhabited by a member of the Marnier-Lapostolle family, but excluding any financial conditions.
After the sale, the villa is intended to be used for private use. Finally, with this sale, Campari stressed, “the process of divesting the non-strategic activities relating to the acquisition of Grand Marnier has almost been completed”. Including the 80 million that will be withheld from the sale of the villa, Campari will have obtained a total of approximately 173 million in proceeds from the disposal of Grand Marnier’s non-strategic activities (two wineries and some real estate activities).
Consequently, adjusting the price paid by Campari (enterprise value) to take into account the proceeds from the sale, the enterprise value amounts to 479 million for 100% of Societe des Produits Marnier-Lapostolle. The group has therefore estimated that the transaction will generate a positive cash impact of € 80 million and no effect on the 2019 income statement. Despite the good news, the Campari share sells 0.77% to € 8.35 on the stock exchange. Fidentiis, while speaking of positive news, this morning confirmed the sell rating and the target price of between 6.8 and 7 euros on the stock.
Mediobanca Securities also reiterated its negative, underperform rating and target price at € 7.3, while admitting that this is good news for the group which has thus completed the sale of the non-core assets relating to the acquisition of Grand Marnier . “Our estimate of the net debt at the end of the year of 670 million euros already takes into account the collection of 80 million from the sale of the villa. Therefore, there is no impact on our cash flow assumptions”, Mediobanca specified. . (All rights reserved)