* Sees FY profit at about 21 mln stg, below analysts'
* To buy Naked Wines for 70 mln stg
* Appoints Rowan Gormley as CEO
* Shares fall as much as 12 pct
(Adds Chairman, CEO comment, details; updates share price)
By Aastha Agnihotri
April 10 British wine retailer Majestic Wine Plc
said it would buy Naked Wines International Ltd for 70
million pounds ($102.89 million) in a cash-and-stock deal and
forecast full-year profit below analyst expectations.
The wine retailer also said it would withhold final dividend
for 2015 and interim dividend for the next year, sending its
shares down as much as 12 percent.
Majestic Wine, which faces competition from major
supermarkets and discounters such as Aldi and Lidl, has
appointed Rowan Gormley, founder and CEO of Naked Wines, as
Gormley replaces Steve Lewis, who stepped down in February
after a difficult Christmas trading period.
"The group of people we are targeting are the people in the
middle and the key thing for these people is that they like to
try new and different wines ... we are not going to worry about
the rest of the market or the rest of the competition," Gormley
Under the terms of the deal, Majestic Wine will pay about 50
million pounds in cash, to be funded through new debt, and 20
million pounds in shares.
The transaction is expected to add to Majestic Wine's fully
diluted earnings per share in 2017, it said in a statement on
Majestic Wine said the deal would give it access to new
international markets where Naked Wines operates, such as the
United States and Australia.
"It's more about the Majestic Group growing globally," said
Chairman Phil Wrigley, adding that Majestic and Naked Wines will
continue to operate as independent brands.
Naked Wines, founded in the UK in 2008, operates an online
business model where its subscription customers help fund
independent winemakers worldwide in exchange for access to
exclusive wines at preferential prices.
Majestic expects an adjusted pretax profit of about 21
million pounds for the year ended March 31, lower than analysts'
average estimate of 22.66 million pounds, according to Thomson
Shares in the company were down 4 percent at 305.5 pence at
0922 GMT on the London Stock Exchange. They have fallen about 26
($1 = 0.6804 pounds)
(Editing by Anupama Dwivedi)