The Management Board of AmRest Holdings SE (“AmRest”, the “Company”) informs about signing on April 24th, 2017 the Binding Head of Terms (the “HoT”) determining the key terms and conditions on, and subject to which, Pizza Hut Europe Sarl US Branch („PH Europe”) and Yum Restaurants International Russia and CIS LLC (“PH Russia”) would be willing to proceed with a potential transaction with AmRest, whereby the Company’s controlled entity (the “Subsidiary”) would become Pizza Hut master franchisee for Russia and acquire 18 Pizza Hut restaurants operated by PH Russia (“Contemplated Transaction”).
As the result of the Contemplated Transaction AmRest’s controlled entity would become the master-franchisee for 36 restaurants currently operated by multiple sub-franchisees in Russia and would have the right to grant the license to the third parties to operate Pizza Hut restaurants (sub-franchise) in that market. Additionally the Subsidiary would acquire 18 Pizza Hut equity restaurants (“Equity Business”) from PH Russia. The purchase price for the Equity Business is subject to the results of a due diligence to be carried out by AmRest.
The HoT provides for signing of the agreements required for the acquisition of the Equity Business from PH Russia (“Purchase Agreements”) as well as certain agreements with PH Europe: International Franchise Agreement for each of the equity units and the Master Franchise Agreement (“MFA”).
It is the intention of the parties that the MFA and the Purchase Agreements shall be signed and closed (including transfer of ownership of the Equity Business and signing of sub-franchised agreements under the MFA) no later than September 30th, 2017. If the parties fail to sign the MFA and the Purchase Agreements by that date the HoT shall terminate immediately, unless otherwise agreed in writing by both parties.
In the opinion of the Management Board of AmRest there is a great potential for growing the presence of Pizza Hut brand in Russia. The master franchise rights for another country will contribute to strengthening the partnership with Yum! Brands and AmRest’s position as restaurant operator in the Russian market.
Art. 17 Sec. 1 of Regulation (EU) No 596/2014 of The European Parliament and of The Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC