| Fri 5 Mar 2004, 16:20 | | Acquisition Afgri Limiteds 50% Equity In Earlybird |
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Astral Foods Limited - Acquisition By Astral Foods Of Afgri Limited"s 50% Equity
Interest In Earlybird Farm (Pty) Ltd
Astral Foods Limited
("Astral Foods")
Share Code: ARL
ISIN: ZAE000029757
Registration number: 1978/003194/06
ACQUISITION BY ASTRAL FOODS OF AFGRI LIMITED"s ("AFGRI") 50% EQUITY INTEREST IN
EARLYBIRD FARM (PTY) LTD ("EARLYBIRD")
1. INTRODUCTION
Further to the cautionary announcement that was released on SENS on 27 February
2004 and published in the press on 1 March 2004, it is announced that Astral
Foods has reached an agreement, subject to the conditions precedent set out in
paragraph 4 below, in terms of which Astral Operations Limited ("Astral
Operations"), a wholly-owned subsidiary of Astral Foods, will acquire from Afgri
50% of the entire issued share capital of Earlybird ("the acquisition"). Astral
Foods and Astral Operations are herein after referred to as "the Astral Group".
2. THE ACQUISITION
2.1 Rationale for the acquisition
Astral Operations currently holds 50% of the issued share capital of Earlybird.
The boards of directors of Astral Foods and Astral Operations are of the opinion
that the acquisition would be strategically beneficial to both the Astral Group
and Earlybird.
2.2 The business of Earlybird
Earlybird"s activities, based in Gauteng and Mpumalanga, include parent rearing,
laying, hatcheries, broiler production, processing, sales and distribution of
fresh and frozen whole birds and portions. Earlybird"s brands include the well
known Goldi and Festive labels.
2.3 Purchase consideration
Astral Operations will, subject to the conditions precedent set out in paragraph
4 below, acquire from Afgri its 50% interest in the issued share capital of
Earlybird, for a cash consideration of R250 million ("purchase consideration").
Interest on the purchase consideration will accrue to Afgri at a rate equal to
Nedbank Limited"s ("Nedbank") overnight call rate from time to time, from 1
March 2004 to the date on which the acquisition becomes unconditional.
The Astral Group has the necessary funds to pay Afgri the purchase
consideration.
The effective date of the acquisition, subject to the acquisition becoming
unconditional, will be 1 March 2004.
2.4 Financial effects of the acquisition
The acquisition would have had the following effect on earnings per share
("EPS") and headline EPS of Astral Foods for the year ended 30 September 2003,
assuming that the transaction had been implemented on 1 October 2002, and on net
asset value ("NAV") and net tangible asset value ("NTAV") per share of Astral
Foods, assuming that the transaction had been implemented at 30 September 2003:
Before the After the Percentage
acquisition acquisition increase /
(cents per (cents per (decrease)
share)(1) share)(2)
EPS 487.8 573.0 17.5%
Headline EPS 487.2 600.7 23.3%
NAV per share 1,418.3 1,418.3 -
NTAV per share (4) 1,374.8 1,127.8 (18.0%)
1. The financial information set out above is based on the audited financial
results of Astral Foods for the year ended 30 September 2003. The weighted
average number of shares in issue and the number of shares in issue for purposes
of the calculations is 42 742 565 and 42 260 903, respectively.
2. The adjusting of earnings for the year ended 30 September 2003 is based on
the assumption that the acquisition was implemented on 1 October 2002 for the
purpose of calculating EPS and headline EPS, and on 30 September 2003 for the
purpose of calculating NAV and NTAV.
3. The average interest rate on debt is based on Nedbank"s prime interest rate.
4. The goodwill that will result from the acquisition is approximately R104
million and will be amortised over a 10 year period in terms of Astral Foods"
current goodwill accounting policy.
4. CONDITIONS PRECEDENT
The implementation of the acquisition is subject to the fulfilment of the
following conditions precedent:
a) a sale and purchase agreement is entered into by the Astral Group and Afgri;
b) the necessary approvals are obtained from the JSE Securities Exchange South
Africa; and
c) the acquisition is unconditionally approved, alternatively approved subject
to conditions acceptable to the Astral Group, by the Competition Authorities of
South Africa.
5. CIRCULAR TO SHAREHOLDERS
A circular, providing full information on the above acquisition, will be posted
to Astral Foods" shareholders on or about 31 March 2004, for information
purposes only.
Pretoria
5 March 2004
Financial adviser and sponsor: HSBC Investment Services (Africa) (Pty) Limited
Corporate law advisers and consultants: Edward Nathan & Friedland (Pty) Limited
Date: 05/03/2004 02:30:08 PM Produced by the JSE SENS Department
