Dufry brings Advent on board, launches rights issue

ZURICH (Reuters) - Private equity outfit Advent International could get a stake of nearly a fifth in Dufry DUFN.S as the Swiss duty free group raises capital via a rights issue to fund a buyout of its Hudson Ltd HUD.N unit, Dufry said.

FILE PHOTO: The logo of Swiss Dufry is seen at its headquarters in Basel March 30, 2015. REUTERS/Arnd Wiegmann)

Dufry last month agreed to buy the rest of Hudson for $7.70 per share in an all-cash deal worth around $311 million that will delist Hudson from the New York Stock Exchange.

Dufry’s rights issue aims to raise around 500 million Swiss francs ($549 million). Advent has committed to provide up to 415 million francs as an equity investment, Dufry said on Thursday. Shareholders must approve the plan at a meeting on Oct. 6.

The new shares will be offered first to existing shareholders. Advent has first crack at buying rump shares not taken up for as much as 415 million.

Advent has committed to buy shares for 28.50 francs each even if the offer price set by bookbuilding is below that level. If the offer price is above 28.50, Advent does not have to buy. Shares closed at 28.00 on Wednesday.

“Advent International has confirmed that it currently has no intention to acquire a controlling stake in Dufry,” Dufry said, noting Advent’s stake after the issue would not exceed 19.99%.

“We are pleased to have secured the commitment of an experienced strategic partner, Advent, to support Dufry during the re-opening of operations globally and the growth acceleration beyond,” Dufry Chief Executive Julian Diaz said.

Dufry has reeled under the hit of COVID-19, which has dramatically reduced traffic at airports, gutted sales and pushed the group to a first-half loss.

The previously announced rights issue has been fully underwritten by UBS UBSG.S and Credit Suisse CSGN.S, Dufry has said.

($1 = 0.9110 Swiss francs)

Reporting by Michael Shields; editing by Brenna Hughes Neghaiwi