I.T, a well-known fashion clothing group in Hong Kong, China, said it has agreed to privatize and delist through a cash transaction of approximately HK$1.3 billion. Its business has shrunk significantly due to the outbreak and the retail industry’s shift online.
On December 6, I.T and Brooklyn Investment (the offeror) issued a joint announcement stating that they would Article 99 of the Company Law stipulates that the offeror shall privatize I.T Limited by arrangement of agreement. According to a document on the Hong Kong Stock Exchange, the transaction is supported by private equity fund CVC Capital Partners (hereinafter referred to as CVC), which will purchase other shareholders (except founder and major shareholder Shen Jiawei) in the form of cash payment at a price of HK$3 per share. Non-founder shares held.
This is a premium of approximately 55% to the stock’s closing price of HK$1.940 per share on the last trading day, the filing said. The total cash required to implement the plan is approximately HK$1.3 billion. As part of the agreement, founder Jiawei Shen will retain approximately 51% ownership, with CVC owning the remaining ownership.
I.T Group stated that due to the severe market environment, interference from the digital transformation of the retail industry, and the impact of the COVID-19 outbreak, the company agreed to the transaction. It said: “These factors require the company to re-strategize and engage in deeper business transformation and restructuring to achieve long-term sustainable growth.”
The transaction is still subject to shareholder approval, Morgan Stanley serves as financial advisor to Brooklyn Investment.
I.T’s shares were suspended from trading on November 30 and applied to resume trading in Hong Kong on Monday.
I.T Group is a company established in Hong Kong in 1988 by brothers Shen Jiawei and Shen Jianwei. The group is mainly engaged in the sales of fashion and accessories, covering women’s clothing, men’s clothing, shoes, accessories and lifestyle. It has more than 450 international fashion brands and more than 10 independent fashion brands. It currently has 800 stores around the world, of which more than 700 are located in Hong Kong and mainland China. I.T Group operates and sells the products of the fashion brands it represents through its I.T concept stores, Beijing Dover Street Market and Beijing Galeries Lafayette (joint venture).
I.T Group is known for its creativity. It has introduced many well-known international brands to Hong Kong and mainland China, and has also created and developed many of its own brands, including FIVE CM, A BATHING APE, b+ab, Camper, :CHOCOOLATE, EXI.T, fingercroxx, FRENCH CONNECTIONFRED, PERRYHOOD, Sizzue, KURT GEIGERMINI, CREAM, MUSIUM DIV., tout à coup, Undefeated, WTAPS® and Venilla suite, etc.
Earlier this year, I.T’s discount stores also suffered financial losses during the social unrest in Hong Kong. In the 2019/2020 fiscal year on February 29, 2020, I.T Group’s loss expanded to HK$700 million. </p
