Castlereagh, a wholly-owned subsidiary of Dickson Concepts, is proposing to acquire Tommy Hilfiger Asia Pacific Limited (THAP). The consideration payable by Castlereagh for the THAP Acquisition is HK$396 million, which was determined after arms length negotiations. The price represents a price to earnings ratio of approximately 7.8 times the audited consolidated net profit after tax for the year ended March 31, 2006 of the THAP Group.
The THAP Group is principally engaged in the retailing and wholesaling of lifestyle apparel and accessories bearing the brand name Tommy Hilfiger in Hong Kong, Taiwan, the PRC, Singapore and Malaysia. The audited consolidated net profit before and after taxation and extraordinary items of the THAP Group amounted to approximately HK$61.86 million ($7.9 mm) and HK$49.45 million ($6.3 mm) respectively for the year ended March 31, 2005, and HK$61.19 million ($7.9 mm) and HK$50.71 million ($6.5 mm) respectively for the year ended 31 March, 2006. The audited consolidated net assets of the THAP Group amounted to approximately HK$32.99 million ($4.2 mm) and HK$60.18 million ($7.7 mm) as at March 31, 2005 and 2006 respectively.
The Tommy Hilfiger Licence has an initial term ending on March 31, 2009 with an option by THAP to extend for one additional 5 year term to March 31, 2014.
