Stock Options - A Strategy to Leverage the Advantage of Strategic Acquisition

Transcription

1 GL events A French corporation (société anonyme) governed by a Board of Directors with a capital of 63,627,344 Registered office: route d Irigny ZI Nord BP Brignais RCS Lyon OFFERING CIRCULAR MADE AVAILABLE TO THE PUBLIC FOR THE ISSUANCE AND LISTING ON EUROLIST OF EURONEXT PARIS OF NEW SHARES TO BE SUBSCRIBED IN CASH IN CONNECTION WITH THE CAPITAL INCREASE WITH PREFERENTIAL SUBSCRIPTION RIGHTS OF , INCLUDING SHARE PREMIUM THROUGH THE OFFERING OF NEW SHARES RESULTING IN A POTENTIAL INCREASE IN CAPITAL TO , INCLUDING SHARE PREMIUM, AND THE ISSUE OF NEW SHARES IN THE EVENT OF THE EXERCISE OF ALL OPTIONS TO SUBSCRIBE FOR SHARES GRANTED BY GL EVENTS AND EXERCISABLE DURING THE SUBSCRIPTION PERIOD AT A UNIT PRICE OF 39 ON THE BASIS OF 1 NEW SHARE FOR 8 EXISTING SHARES SUBSCRIPTION PERIOD: 13/09/2007 TO 26/09/2007 The legal notice will be published in France in the Bulletin des Annonces Légales Obligatoires of 12 September Approval of the Autorité des Marchés Financiers Pursuant to articles L and L of the code monétaire et financier and notably the provisions of articles to of general regulations of the Autorité des Marchés Financiers (hereinafter the AMF ), the latter has approved the French version of the prospectus under No on 09/11/2007. This prospectus was prepared by the issuer whose signatories are liable for its content. In accordance with article L of the code monétaire et financier, this approval was granted after the AMF verified that the document was complete and comprehensible and the information presented therein consistent. As such, it does not constitute an approval of the merits of the offering nor an authentication of the accounting and financial information therein. The prospectus registered with the AMF consists of: the shelf registration document (Registration Document), filed by the company with the AMF on 17/04/2007 under number D (hereafter the "registration document"); the updated registration document of 09/11/2007 filed under number D A01, the French original of this English translation of the offering circular that provides a summary of the prospectus (hereafter the "offering circular"). Copies of the prospectus can be obtained at no cost from the registered office of GL events. The prospectus can also be consulted at the websites of the company (gl events.com) and the Autorité des Marchés Financiers ( france.orq). 2/9

2 SUMMARY OF THE PROSPECTUS This summary briefly presents key information contained in the prospectus of GL events. As such, it should be read as an introduction to the prospectus. Any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor. Where a claim relating to the information contained in a prospectus is brought before a court, the plaintiff investor might, under the national legislation of EC Member States, or parties to the EEA agreement, have to bear the costs of translating the prospectus before the legal proceedings are initiated. No civil liability will attach to those persons who have tabled the summary including any translation thereof, and requested its notification pursuant to article of the AMF General Regulation, unless the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus. (A) GENERAL INFORMATION CONCERNING GL EVENTS AND ITS FINANCIAL STATEMENTS Information on the company's business Created in 1978, under the name Polygone Services, GL events is today a global provider servicing all participants of the event industry: organizers, communications agencies, companies, institutions, etc In this environment, with its historical business covering the delivery of services, since 2001 GL events has completed its upstream offering, expanding into the organization of events and venue management (convention centres, exhibition centres, concert halls) to offer comprehensive event industry solutions. As a result, the Group is today able to propose an offering covering the organization (design, marketing, event communications), venues and associated logistical services. Strategy GL events' goal is to pursue this strategy of integration to cover the entire event industry cycle. This goal will be achieved through the integration of new fields of expertise enriching the global offering of venues under management, the acquisition of businesses with higher added value such as the organization of trade shows and exhibitions and proprietary events France, Europe and other regions where the Group currently manages or will manage venues and the integration of new facilities for hosting events in France and in other countries to complete the network available to organizers of professional, institutional and corporate events. The goal of this strategy, combining organic growth and targeted acquisitions, is to achieve Group sales by 2010 of approximately 900 million by increasing the contribution in the revenue of the activity of the organization of events and venue management and strengthening the Group's presence in international markets. The development of business from venues added to the offering in recent years, contributions from new concessions announced will contribute to organic growth. The Group's continued active participation in calls for tender as concession agreement for venues in France and other countries are renewed in the years ahead will also fuel this expansion. Finally, the development of event organization activities will fuel the growth of logistical services. Growth through strategic acquisitions will focus on the following areas: The acquisition of activities with higher added value such as the organization of trade fairs, exhibitions and events in France Europe and other regions where the Group manages or will manage venues, the integration of new facilities for hosting events in France and other countries. Integration of new services in the offering of venues under management The Group's development also offers synergies between its two major divisions, enriching its offering by providing Group customers the possibility to work in France and in international markets through its expanding global network of venues. Growth in the activity of organizing trade fairs, exhibitions and events and venue management should contribute to significant gains in margins. 3/9

3 Directors and officers and auditors Members of the Board of Directors Chairman and Chief Executive Officer: Olivier Ginon Vice Chairman and Managing Director: Olivier Roux Managing Director: Gilles Gouedard Comte Managing Director: Damien Bertrand Aquasourca Salvepar Philippe Marcel* André Perrier* Erick Rostagnat Marc Doncieux * Independent Director Auditors Statutory Auditors: Mazars Jean Paul Simoens Alternate Auditors: Olivier Bietrix Michel Maza GL events financial highlights ( thousands) IFRS IFRS IFRS IFRS IFRS Consolidated income statement 31/12/ /12/ /12/2006 Jun 06 Jun 07 Net sales 355, , , , ,916 Operating income 25,590 33,207 40,483 20,792 30,759 Current operating income 23,511 31,152 36,264 19,214 29,356 Income before minority interests 15,945 21,117 25,709 13,130 20,096 Net income 15,359 20,038 23,529 12,135 17,081 Working capital funds (negative WCR) (12,470) (16,875) (42,907) (17,307) (45,570) Net debts 50,281 69,729 46,588 80,470 79,303 Shareholder' equity 125, , , , ,945 Shareholder' equity (ex minority interests) 122, , , , ,524 Gearing 40% 39% 22% 44% 35% Cash Flow from operating activities 32,923 44,038 71,592 18,265 22,419 Capital Expenditure (34,994) (92,161) (43,149) (24,454) (41,353) Cash Flow from financing activities 22,905 80,175 (12,375) (9,032) 15,538 Net change in cash 20,574 32,635 14,855 (16,010) (3,103) Déc Déc Déc Juin Juin CA Résultat opérationnel Résultat net part du groupe Net Sales / Operating Income / Net Income 4/9

4 % 39% 44% 22% 35% Déc Déc Juin Déc Juin Shareholder Equity / Net debt / GearingShareholders' equity and debt ( thousands, estimated data) 30/06/2007 Current borrowings 31,585 Non current borrowings 157,264 Shareholders' equity excluding minority interests 203,524 Minority interests 21,421 Analysis of consolidated debt Capitaux propres (totaux) Endettement net Gearing ( thousands, estimated data) 30/06/2007 Cash and cash equivalents (109,547) Current borrowings 31,585 Net current borrowings (77,962) Non current borrowings 157,264 Net financial debt 79,302 Net borrowings at the end of August 2007 totalled 257 million, reflecting in part acquisitions of Promotor International and Agor financed notably by credit lines available from the club deal and in part changes in working capital requirements in July and August, traditionally very active in terms of events. Net working capital The Company notes that from its point of view it has sufficient consolidated net working capital to meet current obligations and those to arise over the 12 month period as from the date of the registration of the prospectus with the Autorité des Marchés Financiers before taking into account proceeds from the rights issue presented therein. SUMMARY OF KEY RISKS FACTORS Before making an investment decision, prospective investors should consider the risks presented below and described in detail in Chapter 4 of the Registration Document and Chapter 2 of the Offering Circular. Risks associated with the offering The market price of shares of the Company may be subject to fluctuations and fall below the subscription price of shares issued pursuant to the exercise of preferential subscription rights. No assurance can be given that a market will develop for the preferential subscription rights and if it does, said rights may be subject to greater volatility than that of the Company's shares. If the market price of the Company's shares declines significantly, the preferential subscription rights may lose their value. If such rights are not exercised by shareholders, their value will be diluted. Fluctuations in securities markets, economic trends and financial transactions in progress or in the future may increase the volatility of the GL events share prices. 5/9

5 Risks associated with the Company The Registration Document of the Company presents risk factors associated with the business activities of GL events. These risks, summarized in the second chapter of this note d opération are listed below: Risks incurred by the company. In addition, within the framework of its activity, the Company is subject to the following risks: financial market risks (interest rate, foreign exchange and liquidity bank covenants), trade receivable risks, supplier risks, risks related to its business activities and markets, legal, tax and employee related risks, industrial and environmental risks, risks related to subcontractors. Other risks about which the company currently is unaware or that management considers marginal could also adversely affect its activity. B) KEY CHARACTERISTICS OF THE OFFERING Use of the proceeds The purpose of the issue is to strengthen GL Events financial structure and, in line with the group s strategy, provide resources to actively pursue targeted acquisitions and investments in the areas defined above. Number of new shares to be issued 1,988,517 new shares with a par value of 4 per share or an aggregate nominal amount of 1,995,017 if all stock options granted by GL events and exercisable before september 20 th Issue price 39 per share to be fully paid up in cash upon subscription representing a par value of 4 plus issue premium of 35. This price represents a discount of 19.75% in relation to the closing price on 09/07/2007 destined to offer shareholders of the company an incentive to participate in the offering by exercising their rights. Percentage of share capital and voting rights represented by the new shares On the basis of GL events authorized capital at 31th August 2007 of 63,632,544 representing 15,908,136 shares and 25,061,599 voting rights on said date, the capital increase for a total of 77,552,163 through the issuance of 1,988,517 new shares would represent 12.50% of the capital and 7.93% and the voting rights of the company on 08/31/2007 and 12.50% of the share capital and 7.95% of the voting rights on 08/31/2007 if all stock options granted by GL events and exercisable before september 20 th Record date for new shares The record date for new shares conferring rights to dividends shall be 1 January Preferential subscription rights Preferential subscription rights are reserved in priority to owners of the share capital or to the transferees of said rights. Every shareholder will be granted a preferential subscription right for each share held at the close of the trading session of 12 September 2007 and negotiable on Eurolist by Euronext from 13 September 2007 to 26 September 2007 inclusive (ISIN code FR ). On the basis of the closing price of the GL events share on September 07 th 2007 or 48.60, and with an issue price of 39, the theoretical value of the preferential subscription right would be 1.07 and the theoretical value of the GL events share ex rights Holders of preferential subscription rights may subscribe within the limit demand for shares on the basis of exact rights (à titre irréductible) according to a ratio of 1 new share for every 8 shares held and without trading rights rights for excess shares (à titre réductible) Pre emptive rights exercise period From 13 September 2007 to 26 September 2007 inclusive. 6/9

6 Undertaking of abstention Commitment of 180 days by the Company and 90 days for Polygone SA, subject to certain exceptions. Stabilization in the market for shares and intervention in the market for preferential subscription rights In accordance with the terms of the underwriting agreement, CM CIC Securities may intervene for the purpose of stabilization in the name of and on behalf of the underwriters through any purchases or sales of preferential subscription rights or new or existing shares of GL events on Eurolist of Euronext Paris or in any other manner. Given the characteristics of this right issue, interventions on the market by the entity assuring the stabilization do not fall under definition of paragraph 7 of article 2 EC Regulation 2273/2003 of 22 December 2003 as such transactions relating to shares may be carried out at a price higher than the subscription price. In respect to transactions in the market for preferential subscription rights, they shall be carried out in a manner that assures the integrity and orderly functioning of the market notably for the purpose of ensuring liquidity and safeguarding equal access to the market of preferential subscription rights to all holders of said rights. Such transactions for stabilization purposes may be undertaken starting 12 September 2007 (13 September 2007 for preferential subscription rights and new shares) until 26 September 2007 (inclusive). Intention of the main shareholders Polygone SA (56.06% of the capital) and Banque de Vizille (5.06% of the capital) have issued a written, unconditional and irrevocable commitment to subscribe respectively for 85% of the total amount offering to which they are entitled on the basis of their exact rights (à titre irréductible). Underwriting An underwriting commitment (garantie de bonne fin) in compliance with article L of the Code de commerce has been issued by CIC Vizille Capital Finance and BNP Paribas dated 10 September Proceeds of the issuer Gross proceeds of the issue will be 77,552,163, issue premium included. Estimated net proceeds of the issue will be approximately 76,552,163, after payment of fees to financial intermediaries and legal and administrative costs. If all stock options granted by GL events and exercisable during the offering period are exercised before 20 September 2007, the gross proceeds of the issue would represent a maximum amount of 77,805,663 and a net proceeds approximately 76,805,663. C) DILUTION: IMPACT OF GROUP SHAREHOLDERS' EQUITY (EXCLUDING MINORITY INTERESTS) Share of shareholders' equity (in euros) Non diluted base (1) Diluted base Before issuance of new shares originating from the rights issue After issuance of 1,988,517 actions new shares originating from the rights issue _ After issuance of 1,995,017 new shares originating from the _ rights issue (1) (1) Based on the assumption of the exercise of the full amount of exercisable stock option. 7/9

7 Analysis of share capital and voting rights at 08/31/2007: Number of shares P ercentage of capital P ercentage of voting rights Polygone SA 8,917, Banque de Vizille 804, Corporate officers 361, Controlling interests in its own share capital 80, Free float 5,744, TOTAL 15,906, ,00 100,00 Polygone is a holding company that is 50.20% owned by Olivier Ginon, 19.70% by M Olivier Roux and 13% by various institutional investors. Analysis of share capital and voting rights after the operation: i) 1,988,517 new shares (out of 52,000 exercable options) ii) 1,995,017 new shares (with 52,000 exercised options) i) After capital increase and w ithout option ii) After capital increase and w ith exercised options Nr of shares % of capital % of voting % of capital % of voting rights rights Polygone SA 9,866, Banque de Vizille 905, Corporate officers 361, Controlling interests in its own share capital 80, Free float 6,683, TOTAL 17,896, (D) PRACTICAL INFORMATION Provisional timetable 10 September 2007 Authorization by the AMF of the prospectus 11 September 2007 Press release announcing the beginning of the offering. 12 September 2007 Publication of the summary describing the main characteristics of the rights issue. Publication of first half results for the period ending 30 June September 2006 Publication in the BALO of the announcements concerning the rights issue and suspension of the possibility of exercising preferential subscription rights. 13 September 2007 Beginning of the preemptive rights exercise period detachment and beginning of the listing of preferential subjection rights. 20 September 2007 Beginning of the suspension period for the exercise of stock options. 26 September 2007 Closing of the preemptive rights exercise period end of the listing of preferential subscription rights 8 October 2007 Publication of the Euronext notice of the admission of new shares 10 October 2007 Issuance of new shares settlement delivery Listing of new shares. 8/9

8 Articles of Association (statuts): the most recent updated version of the Company's articles of association have been filed with the registrar of the Lyon commercial court. Documents on display All legal and financial documents to be made available to shareholders in compliance with applicable regulations may be consulted at the company's registered office, route d Irigny, ZI Nord BP Brignais France. Availability of the prospectus Copies of the prospectus may be obtained on request at no cost from GL events, ZI Nord BP Brignais France and from the lead manager of the offering. The prospectus may also be consulted at the web sites of GL events ( events.com) and the AMF ( france.org). Financial intermediaries CIC Lyonnaise de Banque service émetteurs Chemin Antoine Pardon Tassin la Demi lune France. Investor relations Erick Rostagnat Chief Financial Officer GL events Tel: + 33 (0) infos.finance@gl events.com 9/9