06-30-2006, 08:33 AM
Allegro (QXL Poland) is Poland's largest auction site and holds a huge lead over eBay Poland - it has been increasing that lead in recent months. Allegro is the 299th most visited website in the world, while eBay Poland is ranked 10,866 in traffic
Quote:The online auction house QXL Ricardo swallowed its pride today and agreed to buy back its Polish subsidiary from the people it had accused of stealing the business.
The former dotcom star will pay the parties it has been pursuing through the Polish courts about £56m in QXL stock...
Mark Zaleski, chief executive of QXL, admitted a deal had been struck for pragmatic reasons. QXL's profits will more than double, from £11.1m to £27.7m, if the Polish assets are returned to the fold...
full article: http://business.guardian.co.uk/story/0,,1809280,00.html
The announcement from QXL:
Quote:Conditional agreement to settle litigation and obtain control and
ownership of QXL Poland
QXL ricardo plc (âQXLâ or âthe Companyâ), which provides an online trading platform in
Europe, announces that it has entered into a conditional agreement with, amongst others,
Wouwer Investeringen B.V. (âWouwerâ) and Tomasz Dudziak (together the âVendorsâ) to
settle litigation and thereby obtain undisputed ownership and control of its former subsidiary
QXL Poland Sp z o.o. (âQXL Polandâ) as well as acquiring ownership of certain other
companies in Poland and Eastern Europe which carry on related businesses (together with a
holding company the âPolish Groupâ) (the âSettlementâ).
Background to the Settlement
⢠QXL has been pursuing legal claims relating to the ownership of QXL Poland since early
2003
⢠QXL ceased to have control of QXL Poland following the disputed issue of new shares
representing 92% of QXL Poland in December 2002
⢠QXL claims that the purported share issue was invalid since it was undertaken without the
consent of the Company. This is disputed by the new owners of those shares
⢠The Polish Group consists of online trading platforms and related internet businesses in
Poland, Czech Republic, the Ukraine and a Hungarian joint venture
Settlement terms
⢠QXL will issue up to a maximum of 566,640 ordinary shares of £1 each (the âSettlement
Sharesâ), representing 21.76% of its fully diluted share capital or 24.28% of its Enlarged
Share Capital (i.e. excluding existing options) over three years to the Vendors or as they
direct. The Settlement Shares will be issued in exchange for the entire share capital and
undisputed control of QXL Poland and related businesses and the settlement of the
various civil disputes between the parties (the âCivil Disputesâ)
⢠All the Settlement Shares (whenever issued) will be allotted at a price per share equal to
the average of the mid market closing price for an ordinary share on each of the business
days from the date of the Settlement Agreement to the business day immediately prior to
completion of the transaction (âCompletionâ). For example, assuming an allotment price of
£100.00 (being the closing price of an Ordinary Share on 27 June 2006), the total value of
the maximum number of Settlement Shares that may be issued would be £56.66 million
Reasons for Settlement
⢠The significance of QXL Polandâs revenue and operating profits (£18.2m and £7.9m
respectively) in the year ending 31 March 2006 in relation to QXL ricardo plc (£11.3m and
£2.0m respectively)
⢠The length of time that it has taken to progress the Companyâs claims to date and the
Directorsâ expectation that the litigation will continue to be protracted
⢠The Directorsâ belief that the Settlement will facilitate a much faster and smoother
integration of the Polish Group with QXL (together the âEnlarged Groupâ) and significantly
increase the Enlarged Groupâs opportunities to grow and develop in Eastern Europe
Shareholder approval
⢠Shareholder approval is required at an EGM on 24 July 2006 to approve the issue of new
shares, including 98,010 shares to Beleggingsmaatschappij Florissant N.V. (âFlorissantâ),
QXL ricardo plc
The Matrix Complex
91 Peterborough Road
London
SW6 3BU
T: 020 7384 6300 F: 020 7384 6320
a substantial shareholder of the Company and a related party for the purpose of the
Settlement
⢠Undertakings to vote in favour of the Settlement have been received from shareholders
representing 29.3% of the Companyâs share capital at the date of this announcement
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Mark Zaleski, Chief Executive Officer, said:
âTodayâs announcement represents a significant step for QXL ricardo. Obtaining undisputed
ownership of QXL Poland will have a material impact not only on the Enlarged Groupâs
financial metrics, with a 200%+ increase in pro-forma earnings per share, but also
significantly enhances our position in the important Eastern European region.â
                              Â
full announcement (pdf format): http://www.qxl.co.uk/contents/uk/qxlmedi...elease.pdf