| Thu 14 May 2009, 17:06 | | CBH - Country Bird - Acquisition By Country Bird Of Ordinary Issued Shares In |
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CBH
CBH
CBH - Country Bird - Acquisition By Country Bird Of Ordinary Issued Shares In
Sovereign Food Investments Limited
Country Bird Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/008505/06)
Share Code: CBH & ISIN: ZAE000094835
("Country Bird" or "the Company")
ACQUISITION BY COUNTRY BIRD OF ORDINARY ISSUED SHARES IN SOVEREIGN FOOD
INVESTMENTS LIMITED
1. INTRODUCTION
Following the disposal of its equity interest in Elite Breeding Farms the
Board of Directors of Country Bird decided to reinvest the proceeds in the
form of a strategic equity stake in Sovereign Food Investments Limited
("Sovereign Foods").
Consequently, they would like to inform the shareholders that the Company
has, through a series of open market transactions, acquired 4 411 540
ordinary shares in the issued share capital of Sovereign Foods, which
represents an approximate 13.4% interest in Sovereign Foods ("the
acquisition").
2. THE ACQUISITION
2.1 Nature of Sovereign Foods` business
Sovereign Foods is the holding company to one of South Africa`s largest
producers of frozen poultry. Sovereign Foods` products are packed under
various brand names that serve different markets, a large percentage of
which are aimed at the lower income markets. Sovereign Foods is listed on
the exchange operated by the JSE Limited ("JSE") and had a market
capitalisation of R229 million at the close of trade on 13 May 2009, the
day immediately preceding this announcement.
2.2 Rationale for the acquisition
Country Bird believes Sovereign Foods to be a high quality company with an
excellent industry track record as well as good growth prospects, and
believes that a form of combination of the two companies will be able to
compete more effectively with the larger South African poultry producers.
This announcement does not constitute a firm intention to make an offer for
the purposes of the Securities Regulation Code on Takeovers and Mergers
("the Code"). Any decision to proceed with an offer is subject to an
internal strategic review by Country Bird and appropriate discussions with
the Board of Directors of Sovereign Foods.
2.3 Purchase consideration
Over the period 3 December 2008 to 14 May 2009, Country Bird entered into a
series of open market transactions, acquiring 4 411 540 of the ordinary
issued shares in Sovereign Foods, equating to approximately 13.4% of issued
share capital. The transactions were settled in cash for a total cumulative
consideration of R23.7 million. The highest price paid per share during
this period was R6.87, which, in terms of Rule 5 of the Code would, if
Country Bird were to extend an offer to all Sovereign Foods shareholders in
the foreseeable future, inform the price at which such a potential offer
would need to be made.
2.4 Conditions precedent
There were no conditions precedent to the acquisition
3. PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The table below sets out the unaudited pro forma financial effects of the
acquisition on Country Bird`s earnings per share ("EPS"), headline EPS, net
asset value ("NAV") per share and tangible NAV per share.
The unaudited pro forma financial effects have been prepared to illustrate
the impact of the acquisition on the reported financial information of
Country Bird for the interim period ended 31 December 2008, had the
acquisition occurred on 1 July 2008 for income statement purposes and on 31
December 2008 for balance sheet purposes.
The unaudited pro forma financial effects have been prepared using
accounting policies that comply with International Financial Reporting
Standards and that are consistent with those applied in the reviewed
results of Country Bird for the interim period ended 31 December 2008.
The unaudited pro forma financial effects, which are the responsibility of
the directors, are provided for illustrative purposes only and, because of
their pro forma nature may not fairly present Country Bird`s financial
position,
changes in equity, results of operations or cash flow.
Before the After the Percentage
acquisition acquisition change (%)
EPS 28.51 27.62 (3.1)
(cents)
HEPS 18.60 17.72 (4.7)
(cents)
NAV per share 163.95 162.83 (0.7)
(cents)
TNAV per 112.30 111.19 (1.0)
share (cents)
Weighted average number of 187 099 187 099 0
shares in issue (000`s)
Notes:
1 The amounts in the "Before the acquisition" column have been extracted
from the results of Country Bird for the interim period ended 31 December
2008.
2 The amounts in the "After the acquisition" column reflect the
financial effects of the acquisition on Country Bird.
3 The effects on EPS and HEPS are calculated based on the assumption that the
acquisition was effected on 1 July 2008.
4 The effects on NAV per share and TNAV per share are calculated based on the
assumption that the acquisition was effected on 31 December 2008.
4. CLASSIFICATION OF THE ACQUISITION
The acquisition is classified as a Category 2 transaction in terms of the
Listings Requirements of the JSE.
CAUTIONARY
Shareholders are advised that the Company is considering its strategic
alternatives in respect of Sovereign Foods and intends to engage in the
appropriate discussions with the Board of Directors of Sovereign Foods, which
may have a material effect on the price of the Company`s securities.
Shareholders are therefore advised to exercise caution when dealing in the
Company`s securities until a further announcement is made.
14 May 2009
Johannesburg
Sponsor
Investec Bank Limited
Investment Bank
Standard Bank
Date: 14/05/2009 17:06:46 Produced by the JSE SENS Department.
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