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TAS
TAS
TAS - Taste Holdings Limited - Acquisition of BJ`s franchise agreements located
in Caltex service station forecourts within South Africa
Taste Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2000/002239/06)
(JSE code: TAS & ISIN: ZAE000081162)
("Taste" or "the company")
1. INTRODUCTION
Shareholders are advised that Taste, the owner of the Scooters Pizza and Maxis`s
brands, has entered into an agreement with BJ`s Franchising (Pty) Limited, BJ`s
Fast Foods CC ("BJ`s") and Chevron South Africa Limited ("Caltex") for the
acquisition of BJ`s franchise agreements located in Caltex service station
forecourts along the national highways within South Africa with effect from 1
March 2008 ("the BJ`s transaction").
2. BACKGROUND TO THE BJ`S TRANSACTION
Maxi`s acquired the agreement that currently exists between BJ`s and Caltex
which allows BJ`s to exclusive access to all Caltex highway sites within South
Africa, including high profile sites such as "The Bridge" in Midrand. Other
sites are located along the N3 and the N4 highways. Maxi`s did not purchase the
BJ`s brand, but will take over the franchise agreements of the highway sites
only. Once the sites are converted to the Maxi`s brand and image, franchisees
will sign new Maxi`s franchise agreements. The BJ`s sites will fall under the
management of the Maxi`s infrastructure, and new franchisees will have access to
Maxi`s and Taste`s economies of scale. There are currently eight existing BJ`s
sites which will be converted to new image Maxi`s outlets and there is potential
to increase this to approximately 13 sites within the Caltex highway network.
This will increase the Maxi`s national footprint to over 50 outlets and the
total number of Scooters Pizza and Maxi`s to over 165 outlets.
3. RATIONALE FOR THE ACQUISITION
The rationale for the BJ`s transaction is inter alia as follows:
- The BJ`s transaction is both earnings and margin enhancing for the MAXI`S
brand in that the revenues from the sites accrue immediately to Maxi`s from
1 March 2008, and have no incremental operating costs;
- The BJ`s transaction supports the growth strategy of the Maxi`s brand by
targeting high traffic, high profile sites that cater predominantly for
breakfast and lunch trade;
- The sites will provide the Maxi`s brand the opportunity to enhance its
profile through strategically placed sites such as "The Bridge" in Midrand;
- Access to the highway network will provide Maxi`s with an added platform
for new store growth in the future; and
- It will increase the Maxi`s footprint nationally and distinguish Maxi`s
from other competitors in its sector.
4. Conditions precedent
There are no further conditions precedent and the BJ`s transaction is therefore
unconditional.
5. Unaudited pro forma financial effects of the transaction
No financial effects are disclosed as the financial effects are not significant
in terms of the JSE Listings Requirements.
Designated Adviser
Vunani Corporate Finance
Johannesburg
27 February 2008
Date: 27/02/2008 11:42:01 Produced by the JSE SENS Department.
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