XXL ASA – Fraser Group plc' intended offer, update on the Alternative Rights Issue and EGM notice

13 Dec 2024 08:00 CET

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Reference is made to the announcement made by Frasers Group plc ("Frasers") on 6
December 2024 in which Frasers announced an intention to launch a conditional
voluntary offer for all shares in XXL ASA ("XXL" or the "Company") at a price
per share of NOK 10 (the "Offer"), and the Company's announcement in that
respect on the same date.

The board of directors of XXL (the "Board") has discussed the intended Offer and
the Company's continued process towards implementation of the announced
Alternative Rights Issue. After dialogue with owners representing more than 60%
of the shares in the Company, the Board is of the view that the intended Offer,
if made, is not likely to be successful and the Company will therefore continue
towards implementation of the Alternative Rights Issue.

Due to restrictions set out in Section 6-17 of the Norwegian Securities Trading
Act limiting the Board and management from taking certain actions in a take-over
situation, the Board has decided to call for an extraordinary general meeting to
be held on 7 January 2025 to resolve that the Alternative Rights Issue shall be
implemented and that the Board and CEO of the Company shall be authorized to
make any resolutions and take any steps on behalf of the Company and its
subsidiaries in connection therewith. Shareholders representing in total 60.86%
of the shares and 51.77% of the votes in the Company have undertaken to vote in
favor of the resolutions. These votes will accordingly represent more than the
50% majority votes cast required to approve the Alternative Rights Issue.

The Company has now secured underwriting of the Alternative Rights Issue for the
maximum amount of NOK 600 million. Further, the Company has agreed with the
underwriters that the subscription price in the Alternative Rights Issue shall
be equal to a price for the shares in XXL of NOK 1.65 per share, an increase
from the NOK 0.10 per share in XXL implied by the close price on Oslo Børs on 12
December 2024.

Frasers and XXL
XXL has since late September 2024 been in dialogue with Frasers regarding the
Company's financial position and need to strengthen its liquidity. Frasers has
been invited to discuss and participate in XXL's planned equity raise, but have
repeatedly responded that they will neither support nor contribute to any equity
issue. Instead, they have indicated solutions that by XXL have been considered
to neither being in the best interest of the Company nor its shareholders. Based
on this, the Company on 6 November 2024 announced the fully underwritten Rights
Issue. Further, in the event that Frasers' would use its approximately 32.5% of
the votes in the Company to vote against the Rights Issue at the extraordinary
general meeting, the Alternative Rights Issue was introduced as a back-up
alternative.

On 26 November 2024, XXL received a litigation notification letter from Frasers'
Norwegian legal counsel pursuant to the Norwegian Dispute Act (Norwegian;
prosessvarsel), informing the Company that Frasers is considering filing
invalidity and compensation claims with respect to both the proposed Rights
Issue and the Alternative Rights Issue. Frasers is in the notification letter
inter alia alleging XXL for discrimination of shareholders, circumvention of
mandatory voting regulations by implementing the Alternative Rights Issue, and
that the Company will not be adhering to its purpose as stated in articles of
association following the implementation of the Alternative Rights Issue.

XXL does not agree to these accusations. Despite repeatedly stating that they
will not support or contribute to the Company's equity raise, Frasers has both
before and after the extraordinary general meeting held 28 November 2024 been
invited into the underwriting syndicate for the rights issues on the same terms
and conditions as other shareholder underwriters, but Frasers has chosen not to
accept these invitations. The terms of the underwriting agreement (including the
size and form of settlement of the underwriting commission) reflect market terms
and were negotiated with underwriters not being shareholders of the Company. The
Alternative Rights Issue is, in the view of the board of directors of XXL, the
best alternative available to the Company and its shareholders following Frasers
voting against the Rights Issue on 28 November 2024, and represents no unlawful
circumvention of mandatory voting regulations, nor any unlawful discrimination
of shareholders.

The Offer Announcement
Contrary to market practice, Frasers announced the Offer without any
pre-acceptances having been obtained from shareholders. The Company has the
following comments on certain statements made in the announcement:

• Funding: Frasers states that XXL, as Frasers understand it, is short of funds
to pay its suppliers. That is not correct. XXL will honour all its supplier
agreements and continue to develop its already strong brand & supplier
relationships. An attempt to create uncertainty amongst the Company's suppliers
can not be seen as an act of a shareholder who is supporting the Company.

• Interim financing solution: Frasers is indicating interim financing solutions
in the announcement. It should be noted that the solutions indicated in the
announcement are supposed to be established following completion of the Offer,
i.e. at a point in time when Frasers is in control of the Company. Frasers has
in the Offer announcement not offered any financing solution that will be
available earlier.

• Detrimental transaction structure: Frasers states that the Alternative Rights
Issue will be extremely detrimental to both Frasers and the other minority
holders of XXL shares. The Company would like to repeat that its preference was
to implement an ordinary rights issue, but was hindered from doing by Frasers
voting at the extraordinary general meeting on 28 November 2024. Frasers was at
that time fully aware that the Company's back-up solution was the Alternative
Rights Issue, and has unfortunately, yet intentionally, left the Company with no
option other than pursuing the Alternative Rights Issue to raise new equity. The
Board would also like to re-emphasize that all shareholders, including Frasers,
will be invited to participate in the Alternative Rights Issue on equal terms.

• Dilution by the Alternative Rights Issue: Frasers states that
non-participating shareholders will face a dilution of approximately 99% based
on a subscription price of NOK 0.10 per new share. Based on a subscription price
of NOK 0.10, that is mathematically correct. However, XXL emphasizes that all
shareholders, in line with market practice, will have equal rights to
participate in the Alternative Rights Issue, and thereby mitigating dilution.
The subscription rights will also be tradeable. It should also be noted that the
underwriting syndicate has agreed that the subscription price shall be set at a
level reflecting a price of NOK 1.65 per XXL share, which will reduce the
dilutive effect for shareholders choosing not to participate in the Alternative
Rights Issue.

• Dilution by fees: Frasers states that shareholders will be diluted by the
underwriting fee. That is factually correct as any underwriting comes at a cost.
The level of the underwriting fee is, inter alia, a consequence of the
complexity of the transaction which again is a result of Frasers blocking the
proposed Rights Issue and the need to increase the level of underwriting due to
uncertainty created by Frasers' Offer announcement on 6 December 2024. Frasers
has been invited to participate in the underwriting, but has declined that
invitation and thereby actively chosen any dilution caused by the underwriting
fee. It is also correct that the shareholders will be diluted by the bridge
loan guarantee fee. The reason for the bridge loan guarantee being required by
the lending banks is the uncertainty and complexity created by Frasers'
unwillingness to support any equity raise.

• Offer premium: It is correct that the Offer price represents a premium of 25%
over the closing price of NOK 8.00 on 5 December 2024. Providing bid-premium
only by comparing to the closing price the last day before announcement of an
offer is not in line with market practice and in the Company's view does not
give a fair impression of the attractiveness of the Offer. The Offer price
represents a discount of: (i) 80% to the closing price of NOK 51.00 on 5
November 2024, which was the last trading day prior to announcement of the fully
underwritten Rights Issue, (ii) 82% to the volume weighted average price of NOK
57.11 over the 30 day period up to and including 5 November 2024, and (iii) 86%
to the volume weighted average price of NOK 71.66 over the 90 day period up to
and including 5 November 2024.

The Offer Conditions
Pursuant to Frasers' announcement on 6 December 2024, the offer document for the
Offer – if the Offer is made – will be published in January 2025 and will
include full details of the Offer, including all of its conditions. The Board
will make a statement on the Offer and the offer conditions on the basis of the
offer document no later than one week prior to the expiry of the offer period in
accordance with Section 6-16 of the Norwegian Securities Trading Act.

However, based on indications received from shareholders other than Frasers, the
Board finds it unlikely that the minimum acceptance condition (i.e. Frasers
becoming the owner of more than 50% of the shares and votes on a fully diluted &
converted basis) will be satisfied. On that basis, the Company will proceed
towards implementation of the Alternative Rights Issue, which means that
condition no. 5 for the Offer, pursuant to which completion of the Offer will be
conditional upon no share issuance by XXL or its subsidiaries and no
distributions being made, will also not be satisfied.

Update on the Alternative Rights Issue
Given the uncertainty created by Frasers’ statements, and to provide more
visibility on the amount being raised in the Alternative Rights Issue, the
Company has now secured underwriting of a total amount of NOK 600 million for
the Alternative Rights Issue.

It has further been agreed with the underwriters that the subscription price to
be applied in the Alternative Rights Issue shall reflect a share price of NOK
1.65 per share in XXL, an increase from the NOK 0.10 per share in XXL implied by
the close price on Oslo Børs on 12 December 2024.

Extraordinary general meeting

The notice of the extraordinary general meeting to be held on 7 January 2025 is
attached to this stock exchange announcement.

Chairman of the Board of Directors, Håkan Lundstedt, says:
“With the challenging sporting goods and outdoor market as backdrop, XXL
continues to focus operations, improve the Company’s cost position and
ultimately strengthen its commercial offering and thus also its position as the
Nordic market leader. By securing new financing we will be able to capture
growth and market share in a Nordic market expected to return. The proposed
structure represents a holistic financing solution with short- and long term
bank financing interlinked with an equity raise, and we are grateful for most
shareholders’ and the banks' continued support and belief in the long-term
prospects of the Company.”

CEO Freddy Sobin, says:
“In the implementation of our Reset & Rethink plan, we have reached significant
milestones and made important changes to our concept and operations, and now we
are ready and eager to take the next step by further strengthening our inventory
with popular brands and products that our customers want, at increasingly low
price points but still with a good-better-best price ladder. However, already
now I experience that our stores are fully stocked with great brands, products
and prices and that we are back in better shape than in a long time.
Furthermore, our fantastic teams in Norway, Finland and Sweden are ready. We
thus welcome all customers back to experience what XXL can offer and to make the
best Christmas deals of 2024.”

Advisors
Carnegie AS, DNB Markets, a part of DNB Bank ASA, and Nordea Bank Abp, filial i
Norge, have been retained as global coordinators (the “Global Coordinators”) for
the Alternative Rights Issue. Advokatfirmaet Thommessen AS is legal advisor to
the Company.

For further queries, please contact:
Investor Relations
Tolle O. R. Grøterud
Tel: +47 90 27 29 59
E-mail: ir@xxlasa.com

Press contact:
Jan Christian Thommesen
Tel: + 47 918 21 387
E-mail: presse@xxl.no

ABOUT XXL ASA
XXL ASA is a leading sports retailer with stores and e-commerce in Norway,
Sweden and Finland. It is the largest among the major sports retailers in the
Nordics. XXL pursues a broad customer appeal, offering a one stop shop
experience with a wide range of products for sports, hunting, skiing, biking and
other outdoor activities. XXL's concept is to have the largest stores with the
best prices and the widest assortment of products, focusing on branded goods.

This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to section 5-12 of the Norwegian Securities Trading Act. This stock exchange
announcement was published by Tolle O. R. Grøterud, Investor Relations Officer
at XXL ASA, on 13 December 2024 at 08:00 CET.

Important information
The release is not for publication or distribution, in whole or in part directly
or indirectly, in or into Australia, Canada, Japan or the United States
(including its territories and possessions, any state of the United States and
the District of Columbia). This release is an announcement issued pursuant to
legal information obligations. It is issued for information purposes only, and
does not constitute or form part of any offer or solicitation to purchase or
subscribe for securities, in the United States or in any other jurisdiction. The
securities mentioned herein have not been, and will not be, registered under the
United States Securities Act of 1933, as amended (the “US Securities Act”). The
securities may not be offered or sold in the United States except pursuant to an
exemption from the registration requirements of the US Securities Act.

Neither the Company nor any of its affiliates intend to register any portion of
the offering of the securities in the United States or to conduct a public
offering of the securities in the United States. Copies of this announcement are
not being made and may not be distributed or sent into Australia, Canada, Japan
or the United States.

Any offering of the securities referred to in this announcement will be made by
means of a prospectus. This announcement is an advertisement and is not a
prospectus for the purposes of Regulation (EU) 2017/1129 of the European
Parliament and of the Council of 14 June 2017 on prospectuses to be published
when securities are offered to the public or admitted to trading on a regulated
market, and repealing Directive 2003/71/EC (as amended) as implemented in any
Member State. Investors should not subscribe for any securities referred to in
this announcement except on the basis of information contained in the
aforementioned prospectus, if a prospectus is published. Copies of any such
prospectus will, following publication, be available from the Company’s
registered office and, subject to certain exceptions, on the websites of
Carnegie AS (https://www.carnegie.no/ongoing-prospectuses-and-offerings/), DNB
Markets, a part of DNB Bank ASA (www.dnb.no/emisjoner) and Nordea Bank Abp,
filial i Norge (www.nordea.com/xxl).

The issue, subscription or purchase of shares in the Company or its affiliates
is subject to specific legal or regulatory restrictions in certain
jurisdictions. Neither the Company, its affiliates nor Carnegie AS, DNB Markets,
a part of DNB Bank ASA or Nordea Bank Abp, filial i Norge (acting as "Global
Coordinators" in the Alternative Rights Issue) assume any responsibility in the
event there is a violation by any person of such restrictions. The distribution
of this release may in certain jurisdictions be restricted by law. Persons into
whose possession this release comes should inform themselves about and observe
any such restrictions. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such jurisdiction.

The Global Coordinators are acting for the Company and no one else in connection
with the Alternative Rights Issue and will not be responsible to anyone other
than the Company providing the protections afforded to their respective clients
or for providing advice in relation to the offering and/or any other matter
referred to in this release. Forward-looking statements: This release and any
materials distributed in connection with this release may contain certain
forward-looking statements. By their nature, forward-looking statements involve
risk and uncertainty because they reflect the Company’s current expectations and
assumptions as to future events and circumstances that may not prove accurate. A
number of material factors could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking statements.

More information:
Access the news on Oslo Bors NewsWeb site

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