QXL regains control of Poland's largest auction site Allegro.pl

[mandy]

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

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:

Conditional agreement to settle litigation and obtain control and
ownership of QXL Poland
QXL ricardo plc (“QXL” or “the Company”), which provides an online trading platform in
Europe, announces that it has entered into a conditional agreement with, amongst others,
Wouwer Investeringen B.V. (“Wouwer”) and Tomasz Dudziak (together the “Vendors”) to
settle litigation and thereby obtain undisputed ownership and control of its former subsidiary
QXL Poland Sp z o.o. (“QXL Poland”) 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 “Polish Group”) (the “Settlement”).
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 “Settlement
Shares”), 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 “Civil Disputes”)
• 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 (“Completion”). 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 Poland’s 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 Company’s claims to date and the
Directors’ expectation that the litigation will continue to be protracted
• The Directors’ belief that the Settlement will facilitate a much faster and smoother
integration of the Polish Group with QXL (together the “Enlarged Group”) and significantly
increase the Enlarged Group’s 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. (“Florissant”),
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 Company’s share capital at the date of this announcement
  
Mark Zaleski, Chief Executive Officer, said:
“Today’s announcement represents a significant step for QXL ricardo. Obtaining undisputed
ownership of QXL Poland will have a material impact not only on the Enlarged Group’s
financial metrics, with a 200%+ increase in pro-forma earnings per share, but also
significantly enhances our position in the important Eastern European region.”
                                                            

full announcement (pdf format): http://www.qxl.co.uk/contents/uk/qxlmedi...elease.pdf

[amy]

17 July 2006
QXL ricardo plc (the “Company”)

Statement re Polish operations

In the interests of ensuring shareholders can make a fully informed decision in relation to
the proposed settlement arrangements regarding QXL Poland Sp z o.o. (“QXL Poland”)
at the Company’s EGM on 24 July 2006, the Board of QXL ricardo plc announces that its
Polish subsidiary, aukjce24 Sp z o.o., was informed last week that the Polish Office of
Competition and Consumer Protection has commenced a preliminary inquiry into the
Polish internet auctions market.

The Company anticipates that QXL Poland will also be considered a participant in this
market and is currently seeking clarification regarding the implications of this inquiry.
However the Company understands that the inquiry was commenced on 21 June 2006
and therefore believes that it is unrelated to the proposed settlement arrangements
regarding QXL Poland. Consequently the Board does not currently expect the inquiry to
affect the proposals described in the prospectus issued by the Company on 29 June
2006.

http://www.qxl.co.uk/contents/uk/qxlmedi..._final.pdf

[regic]

Update:

28 July 2006
QXL ricardo plc (the “Company”)

Completion of settlement agreement relating to QXL Poland

Further to the Company’s announcement on 24 July 2006, the Company is pleased to confirm that completion ("Completion") of the settlement arrangements entered into and announced on 29 June 2006 has occurred. Following the approval of these arrangements by a large majority of the Company’s shareholders at the Extraordinary General Meeting held on 24 July 2006, the initial 273,746 ordinary shares of the Company which have been issued in accordance with the terms of the settlement agreement have today been admitted to listing on the Official List and to trading on the London Stock Exchange’s main market for listed securities.

On Completion the Company obtained undisputed ownership of its former subsidiary QXL Poland Sp z o.o. ("QXL Poland") and acquired certain other companies in Poland and Eastern Europe which carry on related businesses. The Company and the other parties to the settlement agreement have also agreed to settle the various civil claims regarding the ownership of QXL Poland, details of which are contained in the prospectus published by the Company on 29 June 2006 ("Prospectus”). As explained in the Prospectus, the listing of the Company’s shares was suspended earlier today immediately after Completion and will remain suspended until the removal of the court appointed administrator of QXL Poland.

Therefore, although QXL Poland is now a subsidiary of the Company, the Administrator will continue to manage QXL Poland for a period after Completion. Although the Company cannot be sure how long the Administrator will continue in this role, a court hearing is scheduled to take place in Poland on 2 August 2006. The Company anticipates that at this hearing the court will approve the withdrawal of the main civil case and that the administrator's appointment will therefore terminate around 10 August 2006.

Further announcements regarding this process will be made in due course as appropriate.

http://www.qxl.co.uk/contents/uk/qxlmedi...LEASE1.pdf