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Standard Bank Group facilitation of Woolworths' ground-breaking acquisition wins Deal of the Year
18 February 2015

The R21.4 billion acquisition by Woolworths of David Jones has won the Deal of the Year 2014 award at the Cell C DealMakers Annual Gala Awards Banquet, hosted in Johannesburg, South Africa last night.

Standard Bank Group, Africa's largest lender by assets, acted as joint financial and debt advisor, lead debt provider, transaction sponsor, joint book runner and underwriter to Woolworths Holdings Limited, on the acquisition of the iconic Australian department store retailer and on the R2.2bn offer to the remaining Country Road minorities. Clive Potter, Executive Vice President and Global Head Consumer Sector at Standard Bank Group, says: "This is one of the largest outbound acquisitions by a South African corporate. Woolworths had been analysing David Jones for some time and were able to clearly articulate the rationale for the deal, securing overwhelming support from its local and international shareholders. This was an innovative but complex funding solution supported by both the South African and Australian cash flows of the entities in question."

Mr Potter explains that Woolworths funded its acquisition of 176-year-old David Jones Limited through a combination of cash, debt and equity bridge funding. The debt and equity bridge funding (supported by a standby equity underwrite) was underwritten by Standard Bank, JP Morgan and Citi, something that gave the retailer's management sufficient comfort to table the offer for David Jones. The stand-by underwriting facility was superseded by an underwriting agreement on the launch of the rights issue process, which closed on Friday, 26 September 2014.

As a result of the transaction, Woolworths will now generate approximately 43% of its sales in Australasia. Mr Potter says the deal was not only Australia's biggest retail takeover since 2007 when Wesfarmers Ltd bought Coles Group Ltd but also created one of the world's biggest department store conglomerates with combined annual revenue of more than R51 billion and a footprint of 1,151 stores across 16 countries. "That makes the transaction a game changer for Woolworths, allowing it to better compete against northern hemisphere apparel retailers, looking to enter its markets," he says. The Dealmaker Awards, in celebrating excellence, innovation and performance across the corporate finance and M&A arena, rewards the most deserving teams and candidates in the industry. "We are proud to have been acknowledged for our role in this historic transaction," said Mr Potter.

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