| Mon 27 Jul 2009, 9:52 | | FBR - Famous Brands Limited - Acquisition By Famous Brands Of Mugg And Bean |
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FBR
FBR
FBR - Famous Brands Limited - Acquisition By Famous Brands Of Mugg And Bean
Franchising Companies ("Mugg & Bean")
Famous Brands Limited
(Incorporated in the Republic of South Africa)
Registration number: 1969/004875/06
Share Code: FBR
ISIN: ZAE000053328
("Famous Brands" or "the Group")
ACQUISITION BY FAMOUS BRANDS OF MUGG AND BEAN FRANCHISING COMPANIES ("MUGG &
BEAN")
1. INTRODUCTION
Further to the cautionary announcement that was released on the Securities
Exchange News Service of the JSE Limited ("SENS") on 9 June 2009 and published
in the South African press on 10 June 2009, it is announced that Famous Brands
has reached an agreement, subject to the conditions precedent set out in
paragraph 3 below, in terms of which Famous Brands will acquire the shares in
the companies housing the South African and African business of Mugg & Bean
("the acquisition").
2. THE ACQUISITION
2.1 Rationale for the acquisition
The acquisition supports Famous Brands` focus on the growth and development of
its best-in-class food service franchise brands. Mugg & Bean is a unique fast
casual coffee themed concept and a leader in this category, therefore ideally
suited to complement Famous Brands` brand portfolio. The acquisition will also
reinforce Famous Brands` position as a leading Quick Service and Casual Dining
Restaurant franchisor.
2.2 The business of Mugg & Bean
The companies comprise the conduct and operations of the coffee themed Mugg &
Bean restaurant franchisor and the procurement of products on behalf of the Mugg
& Bean franchisees.
2.3 Purchase consideration
Famous Brands will, subject to the conditions precedent set out in paragraph 3
below, acquire Mugg & Bean, for a cash consideration of R104 million.
The effective date of the acquisition will be 1 September 2009.
2.4 Financial effects of the acquisition
The unaudited pro forma financial effects set out in the tables below have been
prepared in accordance with the Listings Requirements of the JSE Limited and the
Guide on Pro Forma Financial Information issued by The South African Institute
of Chartered Accountants to assist Famous Brands shareholders to assess the
impact of the acquisition on the earnings per share ("EPS"), headline EPS
("HEPS"), the net asset value ("NAV") and the tangible NAV ("NTAV") per Famous
Brands ordinary share as at 28 February 2009 and for the year then ended. The
pro forma financial effects have been prepared for illustrative purposes
only and, because of their nature, they may not fairly present Famous Brands`
financial position at 28 February 2009 and the results of its operations for the
year then ended. It has been assumed for the purposes of the pro forma
financial effects that the acquisition took place with effect from 1 March 2008
for Income Statement purposes and 28 February 2009 for Balance Sheet purposes.
The Directors of Famous Brands are responsible for the preparation of the
financial effects which have been reviewed by Famous Brands auditors. The
"After" column represents the effects after the acquisition. The "% Change"
column compares the "After" column to the "Before" column. The number and
weighted average number of shares in issue have been stated net of treasury
shares.
Before After % Change
(cents per (cents per
share)(1) share)(2,4&5)
EPS 159.25 159.68 0,27
Headline EPS 159.20 159.60 0,25
NAV per share(3) 521.50 521.50 0
NTAV per share(3) (71.33) (195.59) (174,2)
Weighted average shares 94 397 94 397
(`000)
Shares in issue (`000) 94 397 94 397
1. Extracted from Famous Brands` published audited financial statements for the
year ended 28 February 2009.
2. The figures for Mugg & Bean were extracted from Mugg & Bean`s audited annual
financial statements for the twelve months ended 28 February 2009.
3. Net tangible asset value and net asset value include tangible assets acquired
in respect of the acquisition and intangible assets acquired in terms of the
acquired intellectual property. Consistent with Famous Brands existing
practise, it has been assumed that the intangible assets are indefinite useful
life assets and have not been amortised.
4. Transaction costs of R0,8 million relating to the acquisition were included
in determining the financial effects. 5. A notional after tax
interest rate of 8,5% has been provided for on the cash consideration for the
acquisition.
3. CONDITIONS PRECEDENT
The implementation of the acquisition is subject to the fulfilment of, inter
alia, the following conditions precedent:
a) the satisfactory conclusion of a due diligence by Famous Brands within 20
business days;
b) approval by the Board of Directors of Famous Brands; and
c) the procurement, within 30 days of the conclusion of a due diligence, of the
necessary funding by Famous Brands.
4. CLASSIFICATION OF THE ACQUISITION
The acquisition is classified as a Category 2 transaction in terms of the
Listings Requirements of the JSE Limited. Accordingly, shareholder approval is
not required.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS
Famous Brands shareholders are advised that the cautionary announcement referred
to in the first paragraph of this announcement is hereby withdrawn and caution
is no longer required to be exercised by Famous Brands shareholders when dealing
in Famous Brands` securities.
Midrand
27 July 2009
Sponsor: Standard Bank
Corporate law advisers to Mugg & Bean: Jurgens Bekker Attorneys
Corporate law advisers to Famous Brands: H R Levin Attorneys, Notaries &
Conveyancers
Date: 27/07/2009 09:52:49 Produced by the JSE SENS Department.
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