Completion of the PJSC Detsky Mir’s reorganisation and start of share repurchase programs

THIS PRESS RELEASE AND INFORMATION CONTAINED HEREIN ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO, OR TO ANY PERSON IN, ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION.

30 May 2023, Moscow, Russia. Detsky Mir Group (“Detsky Mir”, “PJSC Detsky Mir” or the “Company”, MOEX: DSKY), a specialised retailer and the leader in the children’s goods sector in Russia and Kazakhstan, informs that in line with a plan of gradual transformation of the Company into a private business, announced in November 2022, the Company completed its reorganisation in the form of a spin-off of LLC Detsky Mir, as a subsidiary operating company (the “Reorganisation”), following the approval at the Extraordinary General Meeting of Shareholders (the “EGM”) on 29th December 2022.

Following that, the subsidiaries of the Company launched share repurchase programs to acquire ordinary shares of PJSC Detsky Mir (hereinafter referred to as the “Shares”) from the Company’s shareholders.

As a general rule, payments for the acquired Shares will be made in the currency of the Russian Federation (rubles) at a price of 71.5 rubles per Share, which is equal to the buyback price of one Share in the course of the completed reorganization of the Company (except the case when non-resident investors from unfriendly countries[1] select special conditions for transferring funds abroad as indicated below).

Shareholders of the Company have a few options to sell their Shares:

1. By submitting an order at PJSC Moscow Exchange in the trading mode “Redemption: Address orders” (the terms of sale were posted on the Internet page of Moscow Exchange: https://www.moex.com/n56394/?nt=0). Repurchase of Shares from the shareholders of the Company under the share repurchase program at the auctions of PJSC Moscow Exchange will be carried out by the Company’s subsidiary, JSC DMK, from May 30, 2023 to July 28, 2023 at a price of 71.5 rubles per Share. JSC “DMK” has the right to terminate the repurchase program ahead of schedule, from the moment of concentration in its possession of 25% of all outstanding Shares.

2. By accepting the Voluntary Tender Offer of LLC DMI received by the Company on May 29, 2023 (the terms of sale are set out in the text of the Voluntary Offer of LLC DMI posted on the Internet page at: https://www.e-disclosure.ru/portal/company.aspx?id=38862); And

3. By accepting the Voluntary Tender Offer of JSC DMFA received by the Company on May 30, 2023 (the terms of sale are set out in the text of the Voluntary Offer of JSC DMFA posted on the Internet page at: https://www.e-disclosure.ru/portal/company.aspx?id=38840).

Shareholders’ submitted applications under the voluntary tender offers of LLC DMI and JSC DMFA will be accepted from the date of receipt of the voluntary tender offers by the Company to August 8, 2023 (the deadline for accepting voluntary tender offers). The payment period for the Shares acquired under each voluntary tender offer will be 90 days from the expiration date for the acceptance of the voluntary tender offer. Shareholders of the Company accepting the voluntary tender offer of JSC DMFA will also have the opportunity, at their discretion, to receive ordinary shares of JSC DMK, which owns a 100% stake in LLC DM, as payment for the Shares, on the terms specified in the voluntary tender offer of JSC “DMFA”.

The Company has received a permission from the sub-committee of the Government Commission for Control over Foreign Investments in the Russian Federation (hereinafter referred to as the “Government Commission”) to proceed with transactions with non-resident investors from unfriendly countries and persons under their control. In accordance with the decision of the Government Commission and in accordance with the conditions specified in the voluntary tender offers of LLC DMI and JSC DMFA non-resident investors from unfriendly countries will be entitled to sell their Shares on the following terms:

• At a price of 71.50 rubles per ordinary share and the payments in rubles will be made to C-type accounts or,

• At a price of 60.77 rubles per ordinary share and the payments in rubles will be made to respectively indicated accounts of non-resident investors by bypassing C-type accounts. 

Voluntary tender offers of LLC DMI and JSC DMFA received by the Company, in accordance with the requirements of the legislation of the Russian Federation, passed the procedure of state control by the Bank of Russia. Within the period stipulated by the legislation of the Russian Federation, recommendations of the Company’s Board of Directors will be accepted in respect of the tender offers, which will be published along with other necessary information on the Company’s website.

If any of the Company’s subsidiaries acquires more than 30% of the outstanding Shares (including Shares held by its affiliates), as a result of the share repurchase programs, it will be required to send a mandatory tender offer to the remaining shareholders of the Company within 35 days from the date of such acquisition. In accordance with the decision of the Government Commission, non-resident investors from unfriendly countries will be able to receive funds for the Shares sold during the mandatory tender offer (in case the mandatory tender offer will take place) only to the “C” type accounts.

Following the completion of the current share repurchase programs and the mandatory tender offer (in case the mandatory tender offer will take place) the Company may be liquidated, subject to the necessary corporate approvals. In this case, non-resident investors from unfriendly countries who, for any reason do not take part in the tender offers prior to such liquidation, will be able to receive the property of the liquidated company remaining after the completion of settlements with creditors (liquidation value) as part of the voluntary liquidation of the Company.

The Company draws attention to the fact that participation in the announced share repurchase programs is a right and not an obligation of the shareholders. It is up to shareholders to make their own decisions as to whether to sell their Shares under any such acquisition programs and, if so, how many Shares to sell. Prior deciding to sell the Shares under any share repurchase program, the Company’s shareholders should carefully read the content and terms of the share repurchase program at the Moscow Exchange and the voluntary tender offers of LLC DMI and JSC DMFA, as well as the content of Articles 84.1 , 84.2 and 84.3 of the Federal Law “On Joint-Stock Companies”, recommendations of the Board of Directors regarding the voluntary tender offers of LLC “DMI” and JSC “DMFA” and other materials that will be published on the Company’s website. Shareholders are advised to consult with their financial, tax and legal advisors if they have any questions in connection with the announced share repurchase programs.

IMPORTANT NOTICE

THIS PRESS RELEASE AND INFORMATION CONTAINED HEREIN ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO, OR TO ANY PERSON IN, ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION.

THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS PRESS RELEASE AND/OR THE VOLUNTARY TENDER OFFER DOCUMENT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS. PERSONS INTO WHOSE POSSESSION THIS PRESS RELEASE, THE VOLUNTARY TENDER OFFER DOCUMENT AND/OR ANY RELATED MATERIALS MAY COME ARE REQUIRED TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.  FAILURE TO OBSERVE SUCH RESTRICTIONS MAY CONSTITUTE A BREACH OF SECURITIES LAWS IN THE RELEVANT JURISDICTIONS.

THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR ADVERTISEMENT OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF THE COMPANY, NOR SHALL ANY PART OF IT NOR THE FACT OF ITS DISTRIBUTIONS FORM PART OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR INVESTMENT DECISION RELATING THERETO, NOR DOES IT CONSTITUTE A RECOMMENDATION REGARDING SECURITIES OF THE COMPANY. ANY SUCH OFFER OR SOLICITATION IS MADE ONLY BY MEANS OF THE VOLUNTARY TENDER OFFER DOCUMENT RECEIVED BY THE COMPANY.

THE TERMS OF THE VOLUNTARY TENDER OFFER ARE CONTAINED IN THE VOLUNTARY TENDER OFFER DOCUMENT. INVESTORS AND SHAREHOLDERS OF THE COMPANY ARE STRONGLY ADVISED TO READ THE VOLUNTARY TENDER OFFER DOCUMENT AND RELATED MATERIALS AS SOON AS THEY HAVE BEEN PUBLISHED, AS THESE WILL CONTAIN IMPORTANT INFORMATION. IN CONSIDERING THE VOLUNTARY TENDER OFFER, THE COMPANY SECURITYHOLDERS SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THE VOLUNTARY TENDER OFFER DOCUMENT.

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY U.S. STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED OF THE VOLUNTARY TENDER OFFER, PASSED UPON THE FAIRNESS OR MERITS OF THE VOLUNTARY TENDER OFFER OR DETERMINED WHETHER THE VOLUNTARY TENDER OFFER IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

THE OFFEROR DOES NOT PLAN TO PURCHASE THE COMPANY’S ORDINARY SHARES, OTHER THAN PURSUANT TO THE VOLUNTARY TENDER OFFER, DURING THE VOLUNTARY TENDER OFFER PERIOD. IN ACCORDANCE WITH APPLICABLE RUSSIAN LAW, ANY ADVISER TO THE OFFEROR OR ANY OF THE OFFEROR’S AFFILIATES, AND ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, IN CONCERT WITH ANY SUCH PERSONS, MAY FROM TIME TO TIME MAKE PURCHASES OF, OR ARRANGEMENTS TO PURCHASE, THE COMPANY’S ORDINARY SHARES OTHER THAN PURSUANT TO THE VOLUNTARY TENDER OFFER, BEFORE OR DURING THE PERIOD OF THE VOLUNTARY TENDER OFFER, SO LONG AS THOSE ACQUISITIONS OR ARRANGEMENTS COMPLY WITH APPLICABLE LAW.  ANY OF THE PURCHASES REFERRED TO IN THIS PARAGRAPH MAY OCCUR EITHER IN THE OPEN MARKET AT PREVAILING PRICES OR IN PRIVATE TRANSACTIONS AT NEGOTIATED PRICES.  INFORMATION ABOUT SUCH PURCHASES WILL BE DISCLOSED AS AND IF REQUIRED BY APPLICABLE SECURITIES LAWS.

THIS ANNOUNCEMENT, AND ANY INVESTMENT ACTIVITY TO WHICH IT RELATES, IS AVAILABLE ONLY TO (I) PERSONS WHO ARE OUTSIDE THE UNITED KINGDOM, (II) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”), (III) HIGH NET WORTH COMPANIES FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, (IV) PERSONS WITHIN THE SCOPE OF ARTICLE 43 OF THE ORDER, OR (V) ANY OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE MADE UNDER THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS ANNOUNCEMENT MAY NOT BE ACTED OR RELIED ON IN THE UNITED KINGDOM BY ANYONE WHO IS NOT A RELEVANT PERSON.

THE COMPANY IS A COMPANY ORGANISED UNDER THE LAWS OF THE RUSSIAN FEDERATION. THE VOLUNTARY TENDER OFFER IS MADE PURSUANT TO RUSSIAN LAW. THE VOLUNTARY TENDER OFFER IS SUBJECT TO DISCLOSURE AND PROCEDURE REQUIREMENTS OF THE RUSSIAN FEDERATION WHICH ARE DIFFERENT FROM THOSE OF THE UNITED KINGDOM OR THE UNITED STATES. IN ADDITION, U.S. INVESTORS SHOULD BE AWARE THAT THE VOLUNTARY TENDER OFFER DOCUMENT HAS BEEN PREPARED IN A FORMAT AND STYLE, WHICH DIFFER FROM THE U.S. FORMAT AND STYLE. FURTHERMORE, THE PAYMENT AND SETTLEMENT PROCEDURE WITH RESPECT TO THE VOLUNTARY TENDER OFFER FOR ORDINARY SHARES DIFFERS FROM U.S. PAYMENT AND SETTLEMENT PROCEDURES, PARTICULARLY WITH REGARD TO THE DATE OF PAYMENT OF CONSIDERATION.

[1] The list of unfriendly countries is set in accordance with the Decree of the Government of the Russian Federation No. 430-r dated March 5, 2022