* Dufry buys remaining 49 pct in HDF, two years ahead of
* To pay 328 mln euros in cash and shares
* Adds to signs of interest in Greek equity investments
By Angeliki Koutantou
ATHENS, Dec 12 Swiss travel retailer Dufry
has agreed to buy full control of Hellenic Duty Free,
which runs stores at Greek airports, casting a vote of
confidence in the troubled economy - albeit via the booming
Dufry said on Thursday it would buy the 49 percent of
Hellenic Duty Free (HDF) it does not already own from Greek
rival Folli Follie for about $452 million, exercising
an option to buy the stake two years ahead of plan.
HDF, which holds a monopoly on duty free shops in Greece
until 2048 and runs 111 shops at the airports plus border
crossings and seaports, is profitable unlike many other Greek
firms that have been battered by six years of recession.
Nevertheless, the purchase adds to early interest in Greek
companies following a debt crisis that nearly pushed the country
out of the euro.
"The deal reflects Dufry's confidence in Greek tourism and
the company itself, which is a high quality asset that produces
revenues," Eurobank Equities analyst Stamatis Draziotis said.
HDF reported sales of 300 million euros in 2012 and the firm
expects a double digit percentage rise this year.
After almost going bankrupt in 2012, Greece's fortunes have
improved this year thanks to efforts to bring its finances back
on track and a bumper tourism season that has boosted prospects
for HDF shops.
Greek tourism suffered during the global financial crisis,
which kept away some visitors from wealthier countries to the
north such as Germany and Britain, along with violence at
anti-austerity protests in Greece.
However, northern European economies are largely picking up
and Greek protests are ebbing, while competitors such as Egypt,
Tunisia and Turkey have suffered from violence or unrest.
This puts HDF in a strong position to capitalise on the
rebound in Greek tourism, which expects to see revenues rise 13
percent to a record high in 2014 and help the country finally
emerge from its deep recession.
"This deal is a vote of confidence in Greece. It's a vote of
confidence in Greek tourism," George Koutsolioutsos, CEO of
Folli Follie, told Reuters. "Although the economy and the
domestic market is suffering, HDF has not felt the squeeze. On
the contrary, they've had record profits and revenues."
GREEN SHOOTS OF INTEREST
Dufry joins other foreign firms sniffing out investments in
Greece in recent months as fears of a Greek euro exit fade.
Canadian investment fund Fairfax Holding bought a 5
percent stake in aluminium producer Mytilineos in
October for about 30 million euros. It also agreed to raise its
stake in property developer Eurobank Properties.
Greece also pulled off the privatisation of its betting
monopoly OPAP by selling a controlling stake to
Czech-Greek fund Emma Delta for 652 million euros in October.
Greece agreed on Wednesday to unfreeze a 7.6 billion euro
toll road project, reviving what was the biggest foreign
investment in the country until it was halted by the debt crisis
three years ago.
Dufry, which runs shops catering for tourists around the
world, bought a 51 percent stake in HDF in 2012 for 200.5
million euros, with the option of acquiring the remaining 49
percent in 2016.
It will pay for the remaining stake with a combination of
175 million euros in cash and shares worth 153 million euros,
which Koutsolioutsos said would give Folli Follie a roughly 4
percent stake in Dufry.
"We are optimistic about travel retail and traffic. We
believe that this is an upbeat market, globally," said
Koutsolioutsos, whose firm sells luxury goods in Greece and 27
other mainly Asian and European countries from over 800 shops.
"People will travel more and more and will spend even more
in airports, regardless of how the economy fares in each
Dufry said it is planning to refurbish and expand retail
space at leading airports in Greece, where HDF generates more
than 80 percent of revenue. It expects to achieve 10 million
euros in savings from the deal.
Dufry said it signed a 500 million euro, five-year loan with
a group of banks to finance the cash portion of the deal and to
repay 335 million euros of HDF's debts with local banks in