Emperia Holding has convened the Extraordinary General Meeting of Shareholders to take place on 6 December. It has on its agenda amendments to the Articles of Association and adjustments to the Management Incentive Programme 2010-2012 targeting the Group’s key managers. The purpose of the resolutions proposed by Emperia’s Management Board is to make investment in Emperia’s shares more attractive, exclude income generated by one-off events from the financial objectives set for the managers participating in the incentive programme, and to realign the Management Incentive Programme with the dividend policy recommended by the Management Board.
“Emperia, as a public company with a highly fragmented shareholding structure, respects the vote of each, smallest as he or she may be, shareholder. We are well aware that with such a highly fragmented shareholding structure, holding over 20 percent of total votes may enable a single shareholder or a group of shareholders acting in concert to exert excessive impact on decisions made by the meeting of shareholders, and by so doing marginalise the votes of minority shareholders. By incorporating these amendments, we intend to make investment in Emperia’s shares more attractive, safeguard the interests of minority shareholders, and guarantee that they are also capable of having real impact on the resolutions adopted that determine the future of the Company,” said Artur Kawa, Chairman of Management Board, Emperia Holding SA.
The purpose of the amendment to the Articles of Association proposed by the Management Board, that vests minority shareholders with the right to sell their shares in a situation when an entity gains domination over the Company’s affairs, is to safeguard the legitimate business interests of all Emperia’s shareholders. In the Management Board’s opinion, the amendment will improve security of investment in the Company’s shares and by the same token will contribute to improving the attractiveness of that investment. It is also consistent with legal arrangements applied by many EU Member States, for which the protection of interests of minority shareholders is a significant component of the whole legal system and of the stability of the equity market.
“Many EU countries apply significantly lower thresholds than Poland at which an entity purchasing a major interest is required to announce a call to purchase 100 percent of shares. Also in Poland efforts are under way to amend the law in a way that increases the protection afforded to minority shareholders in a situation when one entity or a group of entities acting jointly achieves control over a target company,” said Dariusz Kalinowski, Vice-Chairman and Financial Director, Emperia Holding SA.
The amendments to the Company’s Articles of Association envisage also vesting fixed-term personal right of appointment to the Supervisory Board in Mr Artur Kawa and Mr Piotr Laskowski, founders of the Emperia Trading Group, highly trusted by shareholders, who have contributed greatly to the creation of the current value and the development of the present market standing of the Group.
The rights will be vested over a term of twenty-four months. They will guarantee stability of the Supervisory Board in the immediate future and enable the Management Board to focus on pursuing Emperia’s strategy. The key objectives of the strategy include divesting the retail business and real properties, distribution of cash among the shareholders, and making the Tradis Wholesale Group the leader of the Polish FMCG distribution. The vesting of the proposed personal rights will be instrumental in achieving the targets presented by the Management Board in the financial projection 2010-2011, ensuring further sustainable growth of the Emperia Trading Group.
The amendments proposed to the Management Incentive Programme 2010-2012, which is available to the key managers of the Emperia Trading Group, refine the Financial Objective concept by excluding from it any sale transactions of inter alia shares, enterprise or an organised parts thereof, and real properties to third parties. The modifications relate also to the need for the issue price of the P series shares to take into account a situation in which the Company distributes dividend or interim dividend exceeding 40 percent of unconsolidated net profit for the preceding year (following adjustment for the result of one-off events), i.e. the level set in the dividend policy adopted and recommended by the Management Board. Under such circumstances the issue price will be adjusted to account for any such higher distributions.
Emperia Trading Group Outline:
The Emperia Trading Group is one of the largest and most active trading groups in Poland. It engages in retailing and wholesaling food, cosmetic, and household chemical products, facility management, and property development. Emperia has been present in the Polish market since 1990; it operates nationally and has a workforce of nearly 14,000. The coordinator of the Group’s operations, Emperia Holding SA, is listed on the Stock Exchange in Warsaw.
Emperia’s wholesaling operations are conducted by the Tradis Wholesale Group, its retail business is managed by the Supermarket Division, while the Real Property Division is responsible for its properties.
Tradis Wholesale Group engages in the distribution of FMCG products through Cash & Carry locations and Distribution Centres located all over Poland. The wide range of food, cosmetic, and household chemical products offered, attractive terms of business, cutting-edge IT and logistic systems, as well as the constant efforts aimed at satisfying client needs make it the leading business partner to over 50,000 Polish retailers. It is the objective of Tradis to become the leader of FMCG distribution in Poland.
Tradis Wholesale Group comprises companies involved in the distribution of FMCG products, and in a joint effort with other Polish wholesalers it operates franchise and partner chains of shops and supermarkets of varying formats. Tradis is also the strategic partner of Społem cooperatives and together with them it co-organises modern cooperative retailing in Poland. The franchise and partner chains operating as part of the Tradis Wholesale Group currently include over 5,200 outlets, and the 60 cooperatives working in partnership with Tradis manage over 560 outlets.
The Tradis Wholesale Group includes the following companies: Tradis (distribution of FMCG products, household chemical products, and cosmetics), Ambra (distribution of chemical products and cosmetics), DEF (distribution of FMCG products), Detal Koncept (franchisor for the Groszek and Milea franchise chains), Euro Sklep (franchise chain), Lewiatan (franchise chain), Koliber (franchise drugstore chain), and PSD which, in conjunction with Społem Cooperatives, co-organises modern cooperative retailing in Poland as well as operating the Gama chain.
The operations of the wholesale subsidiaries are structured geographically or functionally into eight regions covering the entire Poland. The companies operate in aggregate 63 distribution branches, including Distribution Centres and 44 Cash&Carry locations, of the total area of some 306,000 sq. m.
The Supermarket Division operates supermarkets located in residential estates, mini shopping centres, and major shopping malls. The retail outlets of the division offer up to 1,400 sq. m of selling space and from 4,000 to 10,000 assortment items, including food products, cosmetics and toiletries, household chemical products, and alcoholic beverages plus fresh products: bakery products, cured meats, fruit and vegetables. Local products, produced in the regions of the relevant store-chain’s location, complement the offering.
The Supermarket Division of the Emperia Trading Group comprises the Stokrotka, Delima, Maro Markety, and Społem Tychy chains. At the moment, the auction process is under way at Emperia to select the purchaser of the retail division. The closing of the transaction is scheduled to take place in the first quarter of 2012.
The Real Property Division is responsible for the Emperia Trading Group’s properties. It invests exclusively in supermarket, Cash & Carry, Distribution Centre, and mini shopping centre facilities. The division manages Emperia’s real properties, acquires new locations, and engages in property development.