eXtra cancels letter of intent to acquire clothing retailer
United Electronics Co. (eXtra) announced today that it had cancelled its letter of intent to acquire a 51% stake in fashion retailer International Regions Co. due to failure to reach an agreement, and as the deal does not meet the company’s current strategic priorities. The letter of intent was signed in June 2015 for nine months and was then extended in March 2016 until 31 July 2016. eXtra will incur one-off advisory costs related to the deal of SAR5.2mn in 3Q16. We view the cancellation of the deal positively as we believe it was not a good strategic fit and lacked synergies. (Earnings release, Nada Amin, Hatem Alaa) eXtra: SAR26.58 as of 28 July 2016, Rating: Neutral, FV: SAR24.00 per share, MCap: USD255mn, EXTRA AB / 4003.SE
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