CDON Group is being demerged from its former parent company Modern Times Group MTG AB (‘MTG’) by means of a dividend to MTG shareholders of all of the shares in CDON Group. MTG shareholders will receive one share in CDON Group for each MTG class A and/or class B share that they hold. MTG class C shareholders are not entitled to receive dividends.
Following an Extraordinary General Meeting of CDON Group shareholders held on 25 November 2010, CDON Group has issued a SEK 250.0 million convertible bond. MTG has subscribed for 100% of the bond issue. The convertible bond is unsubordinated, bears interest of 2.85 percent per annum, and is due to be repaid on 2 December 2015 if not redeemed or converted prior to maturity. The bonds may be converted by MTG into CDON Group shares between 15 June 2012 and 1 December 2015. The conversion rate has been set at 125 per cent of the volume-weighted CDON Group share price between 15 December 2010 and 14 January 2011 (the first 20 days of trading in CDON Group’s shares).
CDON Group has also concluded a three year marketing agreement with MTG’s subsidiary Viasat Broadcasting, whereby CDON Group will continue to advertise on MTG’s free-TV channels in Scandinavia, in order to promote its various internet stores.
CDON Group’s financial results for the third quarter and nine months ended 30 September 2010 are included in the listing prospectus, and CDON Group’s fourth quarter and full year 2010 financial results will be announced on 2 February 2011. CDON Group’s sales grew by 27% year on year to SEK 1,441 (1,131) million for the nine months ended 30 September 2010, and CDON Group’s operating income increased by 31% year on year to SEK 97 (75) million, with a stable operating margin of 7% (7%) for the nine month period.
Mikael Olander, President & CEO of CDON Group, commented: “We launched the CDON.COM brand more than ten years ago and the separate listing of our shares follows the rapid expansion of the business to become a market leading Nordic e-commerce player within the Entertainment, Fashion and Sports & Health areas. The convertible bond provides us with the resources to further develop our presence in attractive product and market segments, and to continue to capitalise on the
migration of retail sales from the high street to the internet. We have a portfolio of well-known brands, as well as an efficient and scalable platform, which will enable us to continue to grow profitably in our existing and new markets. We look forward to life as a public company and the many opportunities that it will afford the Group.”