O Luxe Holdings Limited (SEHK:860) signed a memorandum of understanding to acquire GLM.Co.,Ltd. from a group of sellers on April 5, 2017. As on July 7, 2017, O Luxe Holdings signed 2 agreements for the deal. The offer per share is ¥364,700. O Luxe will acquire shares, preferred shares and options of GLM for approximately ¥12.8 billion in cash and stock. Under the terms of the first agreement being termed as O Luxe Holdings will acquire 29.4% stake of common shares along with Class A, B, C, D preferred shares of GLM and 75.1% of the outstanding options of GLM from Hiroyasu Koma,Tomohisa Tanaka and Sota Nagano. The consideration for this agreement will paid as ¥5.05 billion in cash and stock payable as ¥1.75 billion in cash and issuance of 230.8 million consideration shares of O Luxe Holdings. The balance of ¥595.6 million will be paid in cash in escrow account at the time of completion. Under the terms of the second agreement, O Luxe Holdings will pay ¥7.76 billion in cash in which ¥2.60 billion in cash and issue 440.13 million O Luxe Holdings consideration shares for 56.1% stake in common shares along with Class A, B, C, D preferred shares of GLM.Co.,Ltd and 24.9% of the outstanding options of GLM from two directors and eight employees of GLM, six individual investors and 25 corporate investors. Post these 2 agreements, O Luxe Holdings will hold 85.5% stake in GLM. As O Luxe Holdings will hold two-thirds or more of the voting rights in GLM upon acquisition, O Luxe intends to implement the share consolidation of GLM by (i) consolidation all – 12 – of the existing shares in issue in GLM, as a result of which the minority shareholders will hold fractional shares in GLM; and (ii) subsequently causing the O Luxe or GLM to acquire such fractional shares in cash in compliance with applicable rules and laws in Japan. The consideration for the fractional GLM shares shall be payable by O Luxe or GLM at ¥364,700 per existing GLM Share which is the same as the consideration for the GLM shares acquired under the previous 2 agreements. Assuming that fractional GLM Shares corresponding to 5,209 existing Target Shares will be cashed out pursuant to GLM share consolidation, the total consideration payable for GLM share consolidation is ¥1.9 billion. O Luxe intends to finance the cash consideration of the consideration and GLM share consolidation by the net proceeds of the subscription and existing financial resources.

For the year ended March 31, 2017, GLM.Co.,Ltd reported revenue of ¥203.95 million, net loss of ¥1.4 billion and net assets of ¥866.3 million. Following completion of GLM share consolidation, GLM shall become a wholly-owned subsidiary of O Luxe. Post-acquisition, GLM will continue to be managed by the existing key management under the supervision of the Board.

The memorandum of understanding is subject to into formal agreement. The agreements are conditional upon a subscription agreement of O Luxe Holdings, corporate approvals of O Luxe, including approval of the shareholders of O Luxe and GLM, Board approval of GLM, amendment to the articles of GLM, listing of shares, any and all requirements under the Financial Instruments and Exchange Act of Japan, termination of employment contract, GLM shareholders holding two-thirds or more of the total voting rights of GLM and GLM shareholders holding two-thirds or more of the voting rights of each class of shares in GLM having either (a) entered into the acquisition agreements; or (b) executed a letter waiving certain rights held by such GLM shareholder and agreeing to vote in favour of and provide other assistance required for any action that results in O Luxe holding 100% of the voting rights of GLM. The completion shall take place simultaneously with the subscription agreement closing of O Luxe on August 31, 2017 or such later date as may be agreed by the GLM and O Luxe. On August 31, 2017, the expected completion of the transaction is extended from August 31, 2017 to September 30, 2017. Extraordinary General Meeting of O Luxe Holdings Limited will be held on September 28, 2017. On September 28, 2017, the transaction is approved by the shareholders of O Luxe Holdings.

Optima Capital Limited acted as financial advisor and Ernst & Young Certified Public Accountants acted as accountant to O Luxe Holdings Limited. Consulting Group Limited acted as independent valuer of O Luxe Holdings Limited. Ipsos Limited acted as independent professional market research and Tricor Tengis Limited acted as registrar to O Luxe Holdings Limited. Clifford Chance LLP acted as legal advisor to O Luxe Holdings Limited