Completion of the Combination Agreement with Cineworld Group Plc
The Board of Directors of Global City Holdings N.V. (formerly Cinema City International N.V.) with its corporate seat in Amsterdam, the Netherlands (the “Company”), referring to the current report no 2/2014 dated 10 January 2014, hereby announces that following the satisfaction and/or waiver of all conditions thereto, completion of the combination agreement entered into between the Company and Cineworld Group Plc ("Cineworld") on 10 January 2014 (the "Combination Agreement") occurred yesterday, 27 February 2014 (“Completion”).
Summary of the closing of the Combination Agreement:
- In accordance with the terms of the Combination Agreement, the Company has transferred the entire issued share capital of Cinema City Holding B.V. ("CCH"), the entity which held the Company's cinema operations, to Cineworld in consideration for shares in Cineworld and cash (the "Combination").
- Cineworld has issued shares to the Company, representing 24.9% of Cineworld at Completion and paid £272 million cash as consideration under the terms of the Combination Agreement, which together represent an enterprise value of approximately £503 million.
- The Company received, under the terms of the Combination as earnings consideration, additional amounts in cash of €14,488,000 and €25,900,000 at Completion.
- Mr Moshe (Mooky) Greidinger and Mr Israel Greidinger have joined the board of directors of Cineworld as Chief Executive Officer and Chief Operating Officer respectively. Mr Moshe Greidinger and Israel Greidinger have stepped down as managing directors of the Company and have become non-executive directors of the Company. Mr Scott Rosenblum has stepped down from the Supervisory Board as a supervisory director and as chairman and has joined the board of directors of Cineworld as a non-executive director.
- The Company has agreed that, save in certain limited circumstances, the Company and its remaining group companies will not compete with the business of CCH and its subsidiaries (the "Target Group") for two years following Completion and it will not solicit employees of the Target Group for three years following Completion.
- The relationship agreement entered into between the Company and Cineworld on 10 January 2014 has also become fully effective. This agreement contains, amongst others, provisions: (i) to ensure that the Cineworld and its subsidiaries are capable of carrying on its business independently of the Company; (ii) permitting the Company to appoint a non-executive director to the Cineworld board (if none of Moshe Greidinger, Israel Greidinger or Scott Rosenblum is still on the Cineworld board) for so long as it holds at least 10 per cent. of the voting rights in Cineworld; (iii) restricting the disposal by the Company of its shares in Cineworld for 12 months following Completion; and (iv) after that initial 12-month period, requiring the Company to, where reasonably practicable, consult with and consider the reasonable views of the Chairman or the Senior Independent Director of Cineworld prior to a sale of its shares in Cineworld.