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Tom Tailor: Fosun Ups Shareholding, Public Takeover Bid Expected; Warns On FY19

German fashion company TOM TAILOR Holding SE announced Tuesday that its Board has decided to implement a capital increase of 10 percent against cash contribution with partial utilization of the approved capital.

The 3.85 million new registered shares will be allocated directly and exclusively to Fosun International Ltd. by means of a private placement with exclusion of subscription rights for existing shareholders.

As a result, the capital stock of the company will increase to 42.34 million euros from 38.50 million euros. The issue price is 2.26 euros per share, which represents 4.82% above current share price.

With this, Fosun increased its shareholding in TOM TAILOR to 35.35 percent.

The company noted that by exercising the capital increase, Fosun will exceed the threshold set by the German Securities Takeover Act for acquisition of control and is principally obliged pursuant to section 35 of the WpÜG to publish and implement a takeover bid to all shareholders. On current information the Board of Management acts under the assumption that Fosun will issue an exempting voluntary public tender offer.

So far, the company has no information on the possible conditions of an offer.

The capital increase is expected to be completed on February 22. The new shares will be eligible for profit participation as of January 1, 2018.

The net proceeds of around 8.6 million euros are primarily to be used to support the ongoing restructuring measures at BONITA as well as to improve the equity and financing situation.

Heiko Schäfer, CEO of TOM TAILOR, said, "2019 will be a challenging year for the TOM TAILOR Group - we will be further strengthening the growth of our core TOM TAILOR brand in a difficult environment, and we want to make consistent progress in restructuring our subsidiary BONITA. The capital increase is an important step on this path. We consider the fact that Fosun is taking over all of the new shares as a sign of faith towards the path we have taken."

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