Al Futtaim wins control of Robinson

Al Futtaim Group has won the control of Robinson & Company (RCL), Singapore’s largest department store chain, after raising its offer on last week to S$7.20 a share.

The group, which last week, made a cash bid through its recently-launched investment arm Al Futtaim Global Private (ALF Global) to secure 88 per cent of the shares of RCL, on Tuesday said it is ready to pay Dh1.6 billion for the intended 100 per cent stake in Robinson.

“We plan to increase our stake in RCL to 95 per cent and eventually, 100 per cent,” said James G McCallum, Group Director-Retail at Al Futtaim.

“The plan is to buy the minority shares and also perhaps delist the company from the Singapore stock exchange later on,” added G T N Heine, Group Director, Finance at Al-Futtaim.

The group had originally made its offer to buy Robinson for S$6.25 per share, valuing the company at $537.1 million in January. The S$0.20 increase represents a marginal shift from the S$7 a share price set in March.

The acquisition of RCL, which operates department and specialty stores like Robinsons, John Little, Marks & Spencer, Principles, Trucco, River Island and Fat Face in Singapore and Malaysia, is poised to help Al Futtaim to increase its footprint into the Asia-Pacific. Robinson was 29.99 per cent owned by the Lippo Group of Indonesia.

“For many years, we have been looking for an entry into Singapore and Malaysia. And this deal has acted as something of a gateway into the Southeast Asia region. Robinson represents two-third of our retail scale in Singapore,” said McCallum.

With an entry into the Southeast Asia region, Al Futtaim further plans to expand its reach into markets such as Indonesia and Malaysia, according to McCallum. “These two markets are quite interesting. Besides, we also may look for suitable opportunities in Europe.”

“Southeast Asia is where we have chosen to start. There are some very big markets nearby and we will look to tap them as well over a period of time,” he said.

Furthermore, Al Futtaim also intends to bring Robinson’s retail business to the Middle East and North Africa region. “And vice-versa. There are lots of synergies,” said McCallum.

Having clocked a turnover of Dh2 billion in 2007, Al-Futtaim’s retail business has grown 100 per cent over the last five years, according to McCallum.

Dh1.6bn The amount Al Futtaim Group is paying for a 100 per cent stake in Singapore’s largest department store chain, Robinson & Company

Funding

With regards to raising finance for the Robinson deal, Al Futtaim is not looking to for an initial public offering though, it plans to seek loans from banks, according to Heine.

“We will take a reasonable portion of the funding from our books and borrow 60-70 per cent through loans. Issuing bonds is also an option,” he said, naming Standard Chartered and Baker and McKenzie Wong and Leow, Singapore, as the advisers for the transaction.