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ANNUAL REPORT 2013 CARPHONE WAREHOUSE GROUP PLC 77
BUSINESS REVIEW GOVERNANCE FINANCIAL STATEMENTS
20 RESERVES AND ACCUMULATED PROFITS continued
On 30 January 2012 under the B/C Share Scheme, 342.9m B shares and 129.7m C shares were allotted to shareholders through the
capitalisation of £589.8m of the share premium reserve. On 31 January 2012 the Company redeemed 323.8m B shares for 172p per
share, being £556.9m in total, and a dividend was declared on each C share of 172p, totalling £223.0m. Following the declaration of
dividends onthe C shares, these shares became deferred shares which carry no rights to participate in the profits of the Company or
areturn ofcapital. TheBshares, Cshares and deferred shares have no rights to attend or vote at a general meeting of the Company.
Net purchase of own shares reflects the purchase of 9.0m shares in the Company for gross consideration of £28.1m offset by £11.7m
cashcompensation paid by Best Buy Europe in April 2012 in relation to the shares gifted to senior Best Buy Europe executives,
asdetailed innote 4, and £0.4m received in option costs on the exercise of non-nil-priced share option exercises.
On 20 January 2012, the Company issued 15.7m ordinary shares to participants in the Best Buy Europe VES.
21 POST BALANCE SHEET EVENTS
On 26 June 2013 the Group is scheduled to complete the CPW Europe Acquisition for a net consideration of £471m, at which point
BestBuy Europe will become a 100% owned subsidiary of the Group. £341m of the net consideration will be paid in cash on completion
with the balance satisfied by the issue of the Consideration Shares and £50m of deferred cash consideration payable in two equal
instalments of £25m in June 2014 and June 2015.
The primary reasons for the acquisition were to bring a simplified ownership structure, making day-to-day management easier,
thestrategic decision-making process more streamlined and the ability to better leverage CPW Europe’s asset base and know-how.
Such a structure will provide full ownership of growth opportunities across Europe and other potential markets.
On 30 April 2013 the Group placed 47.2m ordinary shares at a price of 222 pence per share. The placing raised net proceeds of £103.2m,
which were used to fund part of the cash consideration for the acquisition.
Additional funding for the cash consideration was provided through a new £250m Sterling term loan facility, provided by the Group’s
core relationship banks. This facility matures in April 2017, and has amortisation of £25m and £50m respectively in June 2015 and June
2016. Interest on the facility is at margins over LIBOR. The actual margin depends on the level of fixed charges cover (based on interest
and operating lease expenditure) in the most recent accounting period. The facility has covenants limiting the ratio of net debt to EBITDA
and requiring a minimum level of fixed charges cover.
On 25 June 2013 the Group issued 42.1m Consideration Shares to Best Buy. Best Buy has agreed to waive any rights to dividends
payable on these shares subject to certain conditions.
An acquisition accounting exercise in relation to the CPW Europe Acquisition has not yet been undertaken, and details will therefore
beprovided in due course.
On 15 April 2013 the Group completed the sale of a freehold property in Acton, London, for £10.5m in cash. The net book value of this
property at 31 March 2013 was £10.5m and the transaction did not result in a profit or loss on disposal. Following the disposal the
market value of properties owned by the Group was £20.0m.
22 RELATED PARTY TRANSACTIONS
During the year, the Group had the following disclosable transactions and balances with its joint ventures (see also note 13):
2013 2012
Virgin Virgin
Best Buy Mobile Best Buy Mobile
Europe France Europe France
£m £m £m £m
Revenue for services provided 3.6 —3.1 —
Net interest and other finance income —0.8 0.3 1.2
Loans owed to the Group —20.5 —24.3
Other amounts owed to the Group 1.4 —15.4 —
Other amounts owed by the Group (6.4) —— —
Revenue for services provided relates to investment property rental income.
Amounts owed to the Group by Best Buy Europe at 31 March 2012 primarily reflect amounts due in relation to shares gifted to senior
BestBuy Europe executives, as detailed in note 4, which were settled in April 2012.