DP Eurasia, the master franchisee of Domino's Pizza in Turkey, Azerbaijan, and Georgia, has responded to a revised cash offer from Jubilant Foodworks for the remaining shares of the company. The revised offer is 95 pence per share, up from the initial offer of 85 pence per share. However, DP Eurasia's board has determined that the revised offer is significantly below the fair value of the company and its prospects. The board is not recommending the revised offer and urges minority shareholders to take no action.
DP Eurasia has provided an update on its current trading and EBITDA forecast. The company expects to marginally exceed its EBITDA guidance for FY 2023 of TRY 696 million. The board has reviewed the FY 2023 outturn and FY 2024 draft budget and has presented profit forecasts of approximately TRY 713 million for FY 2023 and approximately TRY 1,245 million for FY 2024.
The board acknowledges that the valuation of the company is complicated by the hyper-inflationary environment in Turkey. It has considered multiple valuation methodologies and compared the trading EV/EBITDA valuation multiples of the company with those of other listed Domino's franchises. The board believes that the revised offer is an excellent transaction for Jubilant and a poor one for minority shareholders.
The board also highlights the risks and lack of protections for minority shareholders regarding the revised offer. The offer is subject to the mandatory offer provisions in the company's articles of association, which provide less protection than the UK's Takeover Code. The acceptance period for the revised offer is until 1.00 p.m. (London time) on 18 January 2024, and there are no withdrawal rights for shareholders.
In conclusion, DP Eurasia's board is not recommending the revised offer from Jubilant Foodworks and urges minority shareholders to take no action. The board believes that the revised offer is significantly below the fair value of the company and its prospects.