Mar. 28, 2014 Notice Regarding Change in Equity-Method Affiliate (Sale of Shares)

At a meeting held on March 28, 2014, the Board of Directors of FamilyMart Co., Ltd. ("FamilyMart" or "the Company") passed a resolution for the sale of all of the shares that the Company holds in BGFretail Co., Ltd. ("BGFretail") an equity-method affiliate (6,160,030 shares). As a result, FamilyMart intends to sell its BGFretail shares accompanying BGFretail's initial public offering (IPO) on the KOSPI Market of the Korea Exchange (KRX). Details are as follows.

1. Reason for the sale of shares

The Company established a presence in South Korea in 1990 when it signed a licensing contract with the BOKWANG Co., Ltd.. In 1999, the Company took an equity stake in the successor to that arrangement, BOKWANG FAMILYMART CO., LTD. (currently BGFretail Co., Ltd.), and commenced business development in South Korea through this joint venture. Through aggressive store openings, BGFretail established a strong position in the South Korean market and recorded substantial success as an overseas area franchiser.


BGFretail established a new brand - CU - in 2012, and recently began working toward this IPO in order to strengthen its management foundation. At the same time, FamilyMart has taken steps to determine the best way for the two companies to handle their businesses. As a result, FamilyMart reached the conclusion that the best course of action from the viewpoint of maximizing enterprise value is to reorganize its overseas operations through the sale of these shares and recover the capital that it invested while accelerating the growth strategy for FamilyMart operations in Japan and overseas. Consequently, the Company decided to sell all of its holdings in BGFretail through the sale of shares accompanying BGFretail's IPO.

2. Method for the sale of shares

Sale through an agreement with the lead underwriter for all of the shares

3. Outline of the equity-method affiliate that is the subject of this share sale

(1) Corporate name

BGFretail Co., Ltd.

(2) Location

405 Teheran-ro Gangnam-gu Seoul

(3) Title and Name of Representatives

President, Hong, Seok-joh ; Vice President, Park, Jae-gu

(4) Principal business activities

Convenience store business in South Korea

(5) Amount of capital

24,640,080 thousand won

(6) Date of establishment

December 1, 1994

(7) Major shareholders and shareholding ratios

Hong, Seok-joh (34.9%), FamilyMart Co., Ltd. (25.0%)

4. Number of shares to be sold, sales price, and status of holdings before and after the sale

(1) Number of shares held before the sale

6,160,030 shares (number of voting rights: 6,160,030) (shareholding ratio: 25.0%)

(2) Number of shares to be sold:

6,160,030 shares (number of voting rights: 6,160,030) (shareholding ratio: 25.0%)
* The sales price and the gain on the sale will be confirmed through the subsequent listing procedures.

(3) Number of shares held after the sale

0 shares (number of voting rights: 0) (shareholding ratio: 0.0%)

5. Schedule

(1) Resolution of the Board of Directors

March 28, 2014

(2) Date of conclusion of the agreement for the sale of all the shares

April 2, 2014 (planned)

(3) Date of sale of shares

Mid-May 2014 (planned)

6. Outlook

Accompanying this share sale, the Company plans to record gain on sale as extraordinary income. In regard to the influence on the Company's results in the fiscal year ending February 2015, at this point the sales price has not been determined, and notice will be provided when the price is confirmed through the listing procedures.


After the sale, BGFretail will cease to be an equity-method affiliate of the Company.


This sale of shares is based on the assumption that BGFretail's IPO is completed. It is possible that the IPO could be cancelled in the event of fluctuations in market conditions that exceed expectations or unforeseen events in the listing environment.

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