Cen­tral says Pace deal not in the off­ing

Bangkok Post - - BUSINESS -

Lead­ing re­tailer Cen­tral Group has de­nied a re­port that it was approached to ac­quire the op­er­a­tions of high-end gro­cer Dean & DeLuca from SET-listed lux­ury property de­vel­oper Pace Devel­op­ment Plc for US$50 mil­lion (1.67 bil­lion baht).

A source from Cen­tral Group said yes­ter­day that the com­pany did not know where the re­port came from.

The re­port said Cen­tral pro­posed to buy the right to op­er­ate Dean & DeLuca’s cafe, restau­rant, business-to-business and e-com­merce busi­nesses out­side the US, with Pace main­tain­ing own­er­ship of con­sumer goods un­der the Dean & DeLuca brand world­wide.

Pace Devel­op­ment is a high-end property de­vel­oper, with no­table projects in­clud­ing Ma­haNakhon Tower, Hua Hin lux­ury re­sort Ma­haSa­mutr and lux­ury condo Nimit Lang­suan.

Pace ac­quired Dean & DeLuca, one of the world’s most iconic gourmet food brands, as well as its global business and as­sets, for $140 mil­lion from Dean & DeLuca Hold­ings Inc in the US in 2014.

The move was meant to raise Pace’s ca­pa­bil­i­ties as a de­vel­oper of pre­mium mixed-use devel­op­ments and fuel rapid global growth of Dean & DeLuca’s gourmet food and drinks business.

The pur­chase in­cluded the sup­ply chain and op­er­a­tions of 11 out­lets and two com­mis­saries in the US, as well as li­cens­ing agree­ments in 31 in­ter­na­tional lo­ca­tions, among them four out­lets in Thai­land.

In other news, the Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) yes­ter­day or­dered Pace Devel­op­ment to clar­ify in­for­ma­tion re­gard­ing the com­pany’s joint ven­ture agree­ment with three in­vestors, a deal that in­curs an obli­ga­tion for Pace to re­pur­chase a cer­tain amount of its pre­ferred stock from the coun­ter­par­ties.

With ref­er­ence to Pace’s dis­clo­sure through the Stock Ex­change of Thai­land on Feb 28 re­gard­ing an in­vest­ment and loan from three in­vestors who in­vested in two Pace sub­sidiaries — Pace Project One Co Ltd and Pace Project Three Co Ltd — Pace has re­ceived money through an is­suance of pre­ferred stock in the amount of 7.78 bil­lion baht and a loan of 658 mil­lion baht.

Later, Pace dis­closed in the fi­nan­cial state­ments for the sec­ond quar­ter of 2017 that the com­pany had en­tered into a con­sent con­di­tions un­der­tak­ing (CCU) with the three in­vestors, re­sult­ing in an obli­ga­tion for Pace to re­pur­chase a cer­tain amount of the pre­ferred stock.

Be­cause the CCU may cause a sig­nif­i­cant change to the con­di­tions un­der agree­ment and the com­pany’s dis­clo­sure is di­rectly in­volved, the SEC has in­structed Pace’s board to clar­ify the facts about the CCU and its ef­fect on the com­pany and dis­close such clar­i­fi­ca­tion through the SET within seven days.

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