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Astral Foods Limited - Acquisition By Astral Foods Of Afgri Limiteds 50% Equity
Release Date: 16/03/2004 17:27:01 Code(s): ARL
Astral Foods Limited - Acquisition By Astral Foods Of Afgri Limited"s 50% Equity
Interest In Earlybird Farm (Pty) Ltd- Amendments And
Withdrawal Of Cautionary Announcement
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") - AMENDMENTS AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
Further to the terms announcement that was released on SENS on 5 March 2004 and
published in the press on 8 March 2004, regarding the acquisition by Astral
Operations Limited (a wholly-owned subsidiary of Astral Foods)("Astral
Operations") of all the shares held by Afgri Operations Limited (a wholly-owned
subsidiary of Afgri)("Afgri Operations") in the issued share capital of
Earlybird, comprising 50% of the entire issued share capital of Earlybird ("the
acquisition"), the directors would like to inform the shareholders of Astral
Foods ("the shareholders") of the following amendments. Astral Foods and Astral
Operations are herein after referred to as "the Astral Group" and Afgri and
Afgri Operations are herein after referred to as "the Afgri Group".
Revised financial effects of the acquisition
Further to a review by the reporting accountants of Astral Foods of the
unaudited pro forma financial information, which report will be included in the
circular to be posted to shareholders on or about 31 March 2004, the financial
effects of the acquisition have been amended to reflect the effect of the
acquisition on the 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 as at 30 September 2003:
Before the After the Percentage
acquisition acquisition increase
(cents per (cents per /(decrease)
share)(1) share)(2)
EPS 487.8 540.3 10.8%
Headline EPS 487.2 563.7 15.7%
NAV per share 1,418.3 1,418.3 -
NTAV per share 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 adjustment 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. All intergroup transactions
have been excluded.
3. The average interest rate on debt is linked to 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. The goodwill will be affected by
dividends paid by Earlybird after 30 September 2003, by an increase in the
equity of Earlybird from 30 September 2003 to the effective date of the
acquisition and by the transaction costs. The goodwill still needs to be
allocated to the fair value of the underlying assets of Earlybird.
CONDITIONS PRECEDENT
The acquisition is subject to the fulfilment of the following conditions
precedent, as set out in the sale and purchase agreement to be entered into
between the Astral Group and the Afgri Group:
a) Afgri Operations and Earlybird enter into an agreement in terms of which
Afgri Operations shall supply to Earlybird certain of its feed requirements
for the next ten years;
b) the declaration of an interim dividend in the amount of R50 million by
Earlybird for the period ended 29 February 2004;
c) the necessary approvals are obtained from the JSE Securities Exchange South
Africa; and
d) the approval of the acquisition by the Competition Authorities of South
Africa.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that a circular will be posted to them on or about 31
March 2004 and caution is no longer required to be exercised by shareholders
when dealing in their securities.
Pretoria
16 March 2004
Financial adviser and sponsor:
HSBC Investment Services (Africa) (Pty) Limited
Corporate law advisers and consultants:
Edward Nathan & Friedland (Pty) Limited
Reporting accountants and auditors:
PricewaterhouseCoopers Inc.
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