| Fri 29 Aug 2003, 15:53 | | Acquisition Of Pleasure Foods Including Wimpy And |
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Steers Holdings Limited - Acquisition Of Pleasure Foods Including Wimpy And
Whistle Stop Brands And Withdrawal Of Cautionary Announcement
Steers Holdings Limited
(Registration No.1969/004875/06)
Share Code STE ISIN ZAE000008330
("Steers Holdings" or "the company")
ACQUISITION OF PLEASURE FOODS INCLUDING WIMPY AND WHISTLE STOP BRANDS AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the announcement of 19 August 2003 regarding the
company"s conditional acquisition of Pleasure Foods (Pty) Limited ("Pleasure
Foods") for a price of R150 600 000, subject to certain adjustments. The funding
of the purchase price is as follows:
* R95 000 000 has been raised by Steers Holdings as medium term finance;
* R20 600 000 will be funded out of Steers Holdings" cash resources and
facilities; and
* R35 000 000 will be raised through a vendor consideration placement of
22 580 645 Steers Holdings shares to be issued at R1,55 each and placed at the
same price with parties who have irrevocably undertaken to acquire them on this
basis. These parties include some existing shareholders and directors of Steers
Holdings.
2. Financial effects of the acquisition
The pro forma financial effects of the acquisition on historical earnings,
headline earnings, net asset value and tangible net asset value per Steers
Holdings share set out in the table illustrate how the acquisition may have
impacted on Steers Holdings. Because of their nature, the pro forma financial
effects may not fully reflect the effect of the acquisition on Steers Holdings"
future earnings.
Per share Per share Change
Cents Cents after
before acquisition %
acquisition
Historical earnings 25.07 1 22.49 2 (10.29)
Historical headline 25.80 1 29.53 3 14.46
earnings
Historical fully diluted 25.80 1 28.63 4 10.97
headline earnings
Historical net asset 91.50 1 103.08 5 12.66
value
Historical tangible net 48.87 1 (63.53) 6 (230.00)
asset value
The decrease in the historical earnings per Steers Holdings share results from
the amortisation of goodwill, arising from the acquisition, over twenty years
(the "goodwill adjustment"). The historical headline earnings per Steers
Holdings share, which excludes the goodwill adjustment, indicates the positive
effect the acquisition has on the historical results of Steers Holdings.
In addition, the acquisition is enhancing on the net asset value of Steers
Holdings. The historical tangible net asset value decrease is a consequence of
excluding the value of Steers Holdings" intangible assets comprising,
principally, the Steers, Debonairs, Fishaways, Church"s Chicken, Wimpy and
Whistle Stop brands.
Notes:
1The historical earnings, headline earnings, fully diluted headline earnings,
net asset value and net tangible asset value per Steers Holdings share as set
out in the before acquisition column of the table are based on Steers Holdings"
audited results for the year ended 28 February 2003.
2The historical earnings per Steers Holdings share as set out in the after
acquisition column of the table is based on the assumption that the acquisition
took effect on 1 March 2002 and was funded by the requisite borrowings (raised
in respect of the acquisition and costs), cash and the issue of Steers Holdings
shares on that date. The net income before taxation and interest of Pleasure
Foods for the year ended 30 June 2003 (the "Pleasure Foods income") has been
adjusted to exclude all transactions involving Milky Lane and Juicy Lucy
occurring during that year. Interest on the borrowings has been raised at
13.86%, while interest on the net own cash resources paid out by Steers Holdings
has been accounted for at prime (collectively the "interest charge"). Taxation
at a rate of 30% was raised on the Pleasure Foods income after the deduction of
the interest charge. The required goodwill adjustment has been raised.
3The historical headline earnings per Steers Holdings share as set out in the
after acquisition column of the table was undertaken on the same basis as the
historical earnings calculation but excludes the goodwill adjustment.
4The historical fully diluted headline earnings per Steers Holdings share as set
out in the after acquisition column of the table was undertaken on the same
basis as the historical headline earnings calculation and adjusts for the effect
of R9 million of the medium term funding converting to equity at the election of
the debt provider at the end of five years. The conversion is assumed to take
place at R1,55 per Steers Holdings share.
5The historical net asset value per Steers Holdings share as set out in the
after acquisition column of the table is based on the assumption that the
acquisition took effect on 28 February 2003 and was funded by the requisite
borrowings (raised in respect of the acquisition and costs), cash and the issue
of Steers Holdings shares on that date. The Pleasure Foods balance sheet at 30
June 2003 has been utilised for the purposes of the calculation.
6The historical net tangible asset value per Steers Holdings share as set out in
the after acquisition column of the table was undertaken on the same basis as
the historical net asset value calculation but excludes all intangible assets.
3. Conditions precedent to the acquisition
One of the conditions precedent to the acquisition, the consent of existing debt
providers to Pleasure Foods, has been fulfilled.
4. Withdrawal of cautionary
Steers Holdings" shareholders are no longer required to exercise caution in
their dealings in Steers Holdings shares.
Johannesburg
29 August 2003
Corporate advisor and sponsor to Steers Holdings
Java Capital
Legal advisor to Steers Holdings
H R Levin and Associates
Debt providers to Steers Holdings
Investec Bank Limited
Reporting Accountants
Fisher Hoffman PKF (Jhb) Inc.
Legal Advisor to Ethos private Equity Fund (iii) and Pleasure Foods
Webber Wentzel Bowens
Date: 29/08/2003 03:10:41 PM
Produced by the JSE SENS Department
