| Mon 11 Oct 2010, 10:00 | | PWK/PIK - Pick n Pay Holdings/Pick n Pay Stores - Pick N Pay Sale of Franklins |
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PWK PIK
PWK PIK
PWK/PIK - Pick n Pay Holdings/Pick n Pay Stores - Pick N Pay Sale of Franklins
Update
Pick n Pay Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1981/009610/06)
Share code: PWK ISIN code: ZAE000005724
Pick n Pay Stores Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1968/008034/06)
Share Code: PIK ISIN code: ZAE000005443
PICK N PAY SALE OF FRANKLINS UPDATE
Pick n Pay Stores Ltd today provided an update on the proposed sale of its
Franklins business to Metcash Trading Limited. This included its strategy to
effect the timely exit of the Australian business in the event the deal
previously announced is not approved by the Australian Competition and Consumer
Commission (ACCC).
The alternative exit strategy is the sale of the Franklins stores and other
strategic assets individually or in groups via a tender process.
However, the company said it would continue to work closely with the ACCC to
secure approval of the proposed sale to Metcash as its preferred option, and was
confident in its arguments to persuade the ACCC to approve it.
On 22 September 2010 the ACCC released its Statement of Issues as part of its
review of the proposed sale of Franklins to Metcash. Given the concerns raised
in the ACCC`s Statement of Issues and the fact that Pick n Pay has received no
other offers for the business since the strategic review was announced in April
this year, Pick n Pay considered it appropriate to initiate the alternative exit
strategy. The ACCC is expected to make its final decision on or before 11
November 2010.
Pick n Pay Chairman Gareth Ackerman commented: "Following the strategic review
announced earlier this year, Pick n Pay took a decision to exit the Australian
market. Our preferred option to achieve this is through the sale of Franklins to
Metcash. While our first priority is to complete the sale to Metcash, we
considered it prudent to put in place an alternative exit strategy in the event
the ACCC does not approve the sale to Metcash.
"The decision to sell Franklins was not taken lightly. Without the benefits of
scale in the market and in the face of unprecedented discounting by Woolworths
and Coles, we consider it essential to start this process immediately as any
further delay in selling the business would not be in the best interests of our
shareholders, Franklins employees, suppliers and other interested groups.
"We have been encouraged by Metcash`s reports of the strong interest in
acquiring Franklins` stores since the proposed sale to Metcash was announced in
July. While the Franklins business as a whole has not generated an acceptable
return on capital employed, Franklins` stores individually have strategic value
to existing grocery operators within Australia, including but not limited to
independent retailers supplied by Metcash," he said.
Pick n Pay expects to receive initial offers for the stores and brands by 26
October 2010. In conjunction with its advisors, Pick n Pay will then assess and
progress offers received for stores and brands so that it can move to complete
the alternative exit strategy in a timely fashion, should the proposed sale of
the Franklins business to Metcash not proceed.
For further information, please contact:
Tamra Veley on +27 83 251 3658 or
Dani Isaacs on +27 83 308 6260.
By order of the board
Cape Town
11 October 2010
Sponsor:
Investec Bank Limited
Date: 11/10/2010 10:00:01 Produced by the JSE SENS Department.
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