[UPDATED] Dufry to snap up remaining equity in Hudson; delisting on the cards

By Luke Barras-hill |

Dufry will increase its current 57.4% share in Hudson to 100% in a transaction valued at approximately $311 million.

Dufry Group has entered into a definitive agreement to acquire the remaining 42.6% equity interest it does not currently own in Hudson Group.

The transaction, expected to close in the fourth quarter, will delist the North American travel retailer from the New York Stock Exchange (NYSE).

Dufry would consequently own 100% of the North American travel retail, news and convenience retailer, which would become an indirect wholly owned subsidiary of the Basel-based travel retail giant.

In an announcement today (19 August), Dufry confirms it will pay $7.70 in cash per Hudson Class A share.


Hudson shareholders will receive $7.70 per Hudson Class A share in cash, without interest, which corresponds to a total purchase price of approximately CHF280 million/$311 million for the shares not already owned by Dufry.

Julián Diaz, CEO, Dufry.

Financing is intended to come from an equity capital increase by way of a rights issue subject to approval from Dufry’s shareholders at an extraordinary general meeting.

Dufry says the transaction is expected to yield annual cost savings of at least CHF20 million and aligns with previously reported cost-saving measures to improve cash flow.

The deal intends to boost both companies’ positions in a volatile trading environment to position them for growth, while further simplifying Dufry’s corporate structure.

It will also strip out costs associated with Hudson’s public listing and related regulatory requirements, which Dufry says ‘are no longer justified in the light of the limited trading liquidity of Hudson and the changed business environment due to the Covid-19 pandemic’.

Hudson Group first listed shares on the NYSE in 2018 following an initial public offering (IPO) on 31 January 2018.

Dufry International AG offered 42.6% or 39,417,765 Class A common shares of Hudson Ltd at a public offering price of $19 per share.

Julián Diaz, CEO, Dufry commented: “The delisting of Hudson is an important part of our re-organisation. It is expected to allow Dufry to realise considerable cost savings, both through synergies generated by simplifying our organisational structure and operating processes as well as by eliminating the costs and complexities of the separate listing.

“The stronger integration will further accelerate the decision-making process by adding more flexibility and efficiency to our business. The delisting of Hudson emphasises the strategic importance of the North American business for the overall Dufry Group and the integration of the duty free and duty paid businesses globally, with the Hudson convenience stores being an established brand across our operations worldwide.

“We will continue with the successful execution of our strategy for the North American travel retail market, which focuses on operating duty free and duty paid convenience shops, as well as the further penetration of the food & beverage market.

“The closer alignment with headquarters and with other global operations will support the North American business during the recovery period, and the fast implementation of the full re-organisation will help Dufry to focus the business on the re-opening and growth acceleration.”

Dufry will buyout the remaining shares in Hudson in an all-cash deal said to be worth approximately $311 million. The delisting and integration of Hudson ‘is expected to further reduce operating complexity, simplify governance and unlock synergies’.

The transaction, structured as a merger subject to the laws of Bermuda (Hudson will become a wholly owned Bermuda-incorporated subsidiary of Dufry) has been unanimously approved and recommended by the Boards of both companies and a special committee of independent directors of Hudson, as well as the Board of Directors of Hudson.

In an analyst note obtained by TRBusiness, Zurich-based investment management firm Vontobel commented: “Hudson was listed in January 2018 with the idea to move more into food & beverage. Due to the new environment, the public offering brings a simplification of the organisation and cost savings – dilution from capital increase – buy.”

As reported in Dufry’s half-year results, North America turnover reached CHF392.2 million compared to CHF954.5 million in the first half of 2019.

Organic growth was -57.9% in the period, with a slowdown in duty free and duty paid sectors, but especially in duty free, which suffered due to the dearth in international flights.

Domestic travel, which accounts for around 85% of the US’s flight movements, started to resume, while the Canadian business was still impacted by international travel restrictions.

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