Edcon Acquires CNA
EDGARS CONSOLIDATED STORES LIMITED
("Edcon")
JSE code: ECO
ISIN code: ZAE000018388
EDCON ACQUIRES CNA
The Joint Provisional Liquidators of both Consolidated News Agencies
(Pty) Ltd and Central News Agency (Pty) Ltd (together "CNA") on 9
October 2002 advised Edcon that Edcon`s bid to acquire CNA had been
successful. In terms of the transaction, which is subject to the
approval of the Court and Competition authorities, Edcon has agreed to
acquire the assets (excluding foreign entities) and to assume certain
liabilities of CNA, valued at R11 million, for a net purchase price of
approximately R130 million.
CNA is a retailer of books, stationery, magazines, music, interactive
computer software and toys. Edcon will be taking over approximately 137
CNA stores. All but a few of these stores are in the same cities or
trading nodes as Edcon stores and there is a great similarity of
customer base between CNA and Edgars. The acquisition of CNA will
permit Edcon to expand its retail base profitably through product lines
that are complementary to those currently offered across the group.
Edcon expects CNA`s turnover in the first full trading year to be
approximately R800 million.
It is expected that the inclusion of CNA into the Edcon group will have
a small positive effect on the profitability of Edcon in the present
financial year. However, in the medium to longer term, Edcon expects
that CNA will make a positive contribution to the financial performance
of Edcon. Although CNA has weaknesses in logistics, retail disciplines,
customer marketing and brand disciplines, all of these areas are where
Edcon believes it can bring its strengths to bear, to restore the value
long associated with the CNA brand.
Further details of Edcon`s strategy with regard to CNA will be included
in the announcement of the company`s interim results for the half year
ended 28 September 2002, which will be on 12 November 2002.
Johannesburg
10 October 2002
SPONSOR
Cazenove
Date: 10/10/2002 08:20:00 AM Produced by the JSE SENS Department
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