Extraordinary Meeting 6/10

[chmurf]

Oh now I have no idea what to do. I was toying with buying 80 shares for our trip in 3 weeks but not sure when we'll be offered the new offer? Anyone know?

from what I get, you need to be a shareholder to be eligible for that offer.

the offer won't come before 2015 first quarter

 

[cherrymarzipan]

you would hold 10 times more shares, but those shares would be worth much less

say you have 100 shares and buy 900 more at 1€ a piece

TDWC will offer to buy them out at 1€25

you'll get 1250€ if TDWC buys out.

if you bought your 100 first shares at 3€50 (350€) + the 900€ for the next 900 shares, you would get 1250€ guaranteed for a 1250€ investment.

If I read this right, many small shareholders will see a way to cut their losses and will sell
meanwhile you lend EuroDisney 900€ per 100 shares, without any gain.

I'm no expert in this field, but it seems like TDWC is getting ready to take control at the expense of the smaller shareholders

Thanks for explaining, I suppose we have a while to think about it but it sounds rather depressing from a small shareholder point of view. I suppose we have to think of the bigger picture.

 

[bpeacock]

So I get the impression that we can keep our shares as in one of the Q&A was:

How will this transaction impact admission criteria to the shareholders Club?

There will be no changes to the admission criteria for existing members of the Club due to this transaction. However we may adjust admission criteria in the future for new shareholders.


So I am right in thinking that from now on anyone who bought the 100 shares will still get the current benefits and anyone wanting to buy shares there may be a change in terms and conditions like there was last year (e.g. from 20 shares to 100).

I really do not want to sell my shares as I had only just bought 80 more in August.

 

[DLPDreams]

from what I get, you need to be a shareholder to be eligible for that offer.

the offer won't come before 2015 first quarter

I am a shareholder but just own the initial 20. We didn't envisage returning to DLRP (and haven't been for 2 years anyway) so I decided against buying the 80 more shares needed to stay a member of the Club. We have an upcoming trip and I had been toying of buying although I know it would take a long time to get back that investment in terms of discounts etc. My original 20 paid for themselves in one trip!

So, if I buy today at around 2.7 euro or whatever it is now, a share, I stand to lose out when TWDC decide if they are going to buy them back in? 1 euro a share isn't particularly enticing - or am I reading that all wrong?

We are off to WDW next year so I can't see us doing a DLRP trip at all next year, so I'm thinking not to bother - really don't know! The 10% off in the DS was always useful, I have to say.... but financially, not a deal breaker!

 

[chmurf]

So, if I buy today at around 2.7 euro or whatever it is now, a share, I stand to lose out when TWDC decide if they are going to buy them back in? 1 euro a share isn't particularly enticing - or am I reading that all wrong?

if you buy today at 2.70 you'll pay 80 * 2.7 = 216€

TWDC will offer to buy at 1€25 (as it stands now, but nothing is for sure)

so you'll be losing out big time.

the only way to make it work would be to buy the 900 additional shares for 900€

your total investment will be 1116€ (plus your initial 20 shares, but those must have paid for themselves right now with the benefits if you ever used them)

so you'll be offered to sell your 1000 shares for 1250€ so that's about 100€ in your pocket.
but TBH that's not something I'd invest 1110+ euros in, not even knowing when I will be able to sell them back (or if the stock will go up again)


---

now what's interesting is that out of the 1 billion TDWC will inject, 750 million will be used to buy EuroDisney's Debt (part of)

What the Forbes magazine pointed out in July this year, is that Euro Disney has paid over $700 million to TWDC (royalties, rights, interests and so on) since 1992
Last year alone, Euro Disney paid over $85 million to what we call "mommy" (TDWC)

so basically, TDWC buys EuroDisney (part of) with Eurodisney's money.
when a poster on the other thread said that TDWC can't buy back what they didn't own, well they just will, because they will buy a 750 million euros chunk of EuroDisney with money they do not even need to spend, because they took it from royalties.
if you see what I mean.

 

[DLPDreams]

if you buy today at 2.70 you'll pay 80 * 2.7 = 216€

TWDC will offer to buy at 1€25 (as it stands now, but nothing is for sure)

so you'll be losing out big time.

the only way to make it work would be to buy the 900 additional shares for 900€

your total investment will be 1116€ (plus your initial 20 shares, but those must have paid for themselves right now with the benefits if you ever used them)

so you'll be offered to sell your 1000 shares for 1250€ so that's about 100€ in your pocket.
but TBH that's not something I'd invest 1110+ euros in, not even knowing when I will be able to sell them back (or if the stock will go up again)


---

now what's interesting is that out of the 1 billion TDWC will inject, 750 million will be used to buy EuroDisney's Debt (part of)

What the Forbes magazine pointed out in July this year, is that Euro Disney has paid over $700 million to TWDC (royalties, rights, interests and so on) since 1992
Last year alone, Euro Disney paid over $85 million to what we call "mommy" (TDWC)

so basically, TDWC buys EuroDisney (part of) with Eurodisney's money.
when a poster on the other thread said that TDWC can't buy back what they didn't own, well they just will, because they will buy a 750 million euros chunk of EuroDisney with money they do not even need to spend, because they took it from royalties.
if you see what I mean.

Thanks - that is effectively what I thought - I really don't think it's worth me buying in. I certainly wouldn't want to buy 900!! Think I'll just sit tight and see what happens.

It was nice while we used it, but honestly, without regular trips, it really doesn't pay for itself at all - at least I get dividends from my other (non DLRP) shares! .

It is interesting as you say, but honestly, not before time!

 

[Jonjo]

Here is the offical overview of the proposal being presented by Euro Disney S.C.A and TWDC to it's shareholders.

Overview of the Proposal

Euro Disney S.C.A. announces a proposal for a €1 billion recapitalization

Overall rationale
The proposal is designed to improve the financial position of Euro Disney and enable it to continue investing in the guest experience.

Context of the operation
Challenging economic conditions in Europe coupled with Euro Disney’s debt burden have negatively impacted its financial performance. Due to these factors, Euro Disney has been constrained in its ability to make investments in Disneyland Paris

Details of the proposal
•Cash infusion of approximately 420 million euros, made or guaranteed by Disney through capital increases of Euro Disney S.C.A. and of its principal operating subsidiary;
•Conversion of 600 million euros of part of the debt owed to Disney into equity of Euro Disney S.C.A. and of its principal operating subsidiary;
•Deferral of all amortization payments of loans granted by Disney until revised maturity in 2024 (currently 2028); and
•Consolidation of the existing lines of credit granted by Disney maturing in 2014 (which has been already extended by Disney to 2015), 2017 and 2018 into a single 350 million euros revolving credit facility maturing in 2023

Objectives of the proposal
•Improve the cash position of the Euro Disney Group by approximately 250 million euros;
•Reduce the Euro Disney Group’s indebtedness, currently exclusively owed to Disney, from 1,748 million euros to 998 million euros, reducing its net leverage ratio from approximately 15x to 6x;
•Improve the Euro Disney Group’s liquidity through interest savings and deferral of amortization of loans until final repayment in 2024.

Parties involved
Euro Disney S.C.A. shareholders would have an opportunity to participate in the capital increases of Euro Disney S.C.A. alongside with Disney, at the same price.
As a result of the contemplated capital increases of Euro Disney S.C.A. and in accordance with applicable regulations, Disney would be required to launch a tender offer on Euro Disney S.C.A. shares.

Euro Disney S.C.A.’s Supervisory Board has expressed unanimous support for this proposal.

Indicative Timing of the operation and milestones
After the information and consultation of the Workers’ Council and the Shareholders’ approval during the general meeting of ED S.C.A.’s shareholders early 2015, the transactions contemplated by the proposal are expected to be completed in the first semester of calendar 2015.

FAQ

What are the details of the proposal?
The proposal is a 1 billion euro recapitalization of the Euro Disney group backed by The Walt Disney Company (“Disney”) and designed to put the company on better financial footing; it will improve cash balances and reduce debt. This proposal, if implemented would:
•Improves cash balances by €250 million
•Reduces debt by €750 million

Why are you doing this?
Despite continued investment in the resort, Euro Disney has been negatively impacted primarily by the challenging economic conditions in Europe. Euro Disney needs to improve its cash balances and reduce its debt to continue to invest in the guest experience. This proposal achieves these goals.

Do I have something to do now with respect to this proposal?
No. No immediate actions are required from you for now as the transaction is expected to take place first half of calendar year 2015. It’s important to understand all your options and take the time to review them.

What are the benefits of the transaction for shareholders?
The proposal will improve the financial position of Euro Disney and enable it to continue investing in the destination. This improved financial footing can only benefit the Euro Disney shareholders.

My shares were worth 3.46 euros before the announcement, will my holding lose value?
The proposal allows shareholders to preserve economic value of their holding
The example below demonstrates how to preserve your economic value but is one of many options you have as a shareholder. You have time to review all your investment options as the transaction will occur in the first half of 2015.

If you want to guarantee the full value of shares at their pre-announcement share price, you would participate fully in the rights offering and then sell all your shares into the mandatory tender offer.
•Pre-announcement: 1 share at €3.46
•Post transaction: 1 existing share: to be sold at €1.25 (i.e. TERP) to TWDC in mandatory tender offer + 9 new shares: subscribed at €1.00 per share through full participation in the rights offering. Then sell all nine new shares at €1.25 to TWDC in the mandatory tender and realize €2.25 net value
= €1.25 + €2.25 = €3.50 i.e. slightly above pre announcement value

You have the flexibility to pursue a range of options—among them, to fully realize the value of your shares at their pre-announcement share price; to maintain your ownership percentage; or to make no new investment, realize any value from selling your subscription rights, and hold or sell your shares.

What are the next steps for implementation of the proposal?
Next steps for the proposal include, first the workers’ council’s information and consultation period initiated today, then approval of the shareholders (at a general meeting expected in early 2015) and the delivery of a comfort letter by an independent expert regarding the preliminary opinion on the fairness of the mandatory tender offer price in November. The transaction is expected to take place first half of calendar year 2015.

How will this transaction impact admission criteria to the shareholders Club?
There will be no changes to the admission criteria for existing members of the Club due to this transaction. However we may adjust admission criteria in the future for new shareholders.

 

[Jonjo]

More on today's annoucement:

Disney and More
http://disneyandmore.blogspot.co.uk/2014/10/euro-disney-sca-announces-proposal-for.html

DLRP Today
http://www.dlptoday.com/2014/10/06/euro-disney-announces-e1bn-recapitalisation-proposal-to-clear-debt-and-invest/

Magical DLP
http://www.magicaldlp.co.uk/disneyland-paris-financial-news-in-normal-people-terms/

 

[gavvy]

From reading that I'd say you either buy in or sell your shares. Staying as you are is not an option :-(

 

[cazspence]

From reading that I'd say you either buy in or sell your shares. Staying as you are is not an option :-(

On the corporate website it says you can do nothing. You do not need to sell or buy if you don't want to. It just means the value of the shares you do have drop to 1/3 of what they are worth now.

 

[gavvy]

The feeling is at some stage TWDC will launch a takeover and buy up all the shares. Not sure how they can do it but there must be a way. So holding onto the shares may be a risk. I have 45 shares so I may just hold onto them if i can.

 

[Jonjo]

The feeling is at some stage TWDC will launch a takeover and buy up all the shares. Not sure how they can do it but there must be a way. So holding onto the shares may be a risk. I have 45 shares so I may just hold onto them if i can.

This is what it is, a take over by TWDC.

 

[katiesam]

I don't pretend to understand all the ins and outs of this!

But just wondering, is it time to sell my shares before they're only worth €1.25 each?

Or have I completely misunderstood?