| Tue 31 May 2005, 16:50 | | Proposed acquisition of Retailer Brands |
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All Joy - Proposed acquisition of Retailer Brands (Pty)
Limited
All Joy Foods Limited(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
JSE Share code: ALJ & ISIN: ZAE000017240
(`All Joy` or `the Company`)Proposed acquisition of Retailer Brands (Pty) Limited
Warning: Investors are warned that investing in companies
listed on ALTx is speculative in nature and the JSE does not
guarantee the viability or success of the Company. Inaccordance with ALTx`s Listing Requirements, All Joy is
required to appoint a Designated Advisor whose
responsibility it will be to guide and assist the Company in
complying with and discharging its responsibilities underthe Listing Requirements. If All Joy fails to retain a
Designated Advisor, it faces possible suspension and the
subsequent termination of its listing without the prospect
of an appropriate offer being made to shareholders. 1. INTRODUCTION
Further to the cautionary announcement dated 11
February 2005 and 29 March 2005 shareholders are
advised that, on Friday, 27 May 2005, All Joy entered into an agreement with the shareholders of Retailer
Brands (Pty) Ltd (`Retailer Brands`) to acquire 100%
of the shares and claims from the shareholders of
Retailer Brands (`the transaction`) and entered into an agreement to acquire from Jenshan Property (Pty)
Limited the property which Retailer Brands occupies
(`the property acquisition`).
2. TERMS OF THE ACQUISITION 2.1 Purchase Consideration
The purchase consideration in terms of the
transaction is R 54 million and will be settled
as follows: * R 20,5 million in cash; and
* the balance by the issuing of 33 168 317
new shares in All Joy at an issue price
of 101 cents per ordinary All Joy share. The purchase consideration was based on
Retailer Brands achieving an after tax profit
of R 9 000 000 for the period ending 30 June
2005 and the net tangible asset value of R16 000 000.
The purchase consideration in terms of the
property acquisition for the property is R 4,55
million and is payable in cash. The property acquisition is conditional on the successful
implementation of the transaction
2.2 Transaction Structure
All Joy acquired 100% of the entire issued share capital and claims in Retailer Brands
from The Hylton Cohen Family Discretionary
Trust and the Errol Frielick Family Trust.
Hylton Cohen and Errol Frielick, executive directors of Retailer Brands, have signed a
management contract for a period of 5 and 3
years respectively and will be appointed to the
All Joy board of directors. All Joy acquired the property from Jehnsan
Property (Pty) Limited. The property acquired
is Erf 410 Chloorkop Extension 22, Registration
Division IR, Gauteng, measuring 11 189m2 situated at 2 Energy Road, Chloorkop, Edenvale.
Transfer of ownership of the property and
payment therof shall occur on the date of
registration of the transfer thereof, which is expected to be in September 2005.
2.3 Conditions Precedent
The transaction is subject to the fulfillment
of the following suspensive conditions by no later than 24 September 2005:
* Successful completion of a due diligence
on Retailer Brands by no later than 19
August 2005; * The approval of the terms of the
transaction by All Joy shareholders by no
later than 24 September 2005;
* The approval, to the extent required, of the JSE Securities Exchange South Africa
(`JSE`) and any other regulatory approvals
as may be required;
* The approval of the transaction by the relevant competition authorities;
* The Articles of Association of Retailer
Brands will be changed to be in line with
JSE requirements. 2.4 Effective Date
The effective date of the acquisition is 1 July
2005.
3. Rationale for the transaction Retailer Brands produces and packs a range of
jellies, spices, packet and instant soups, baking
aids and specialised powdered flavours for the snack
industry. The acquisition will expand All Joy`s product range and client base while Retailer Brands
will obtain the empowerment shareholding required to
secure long-term supply contracts with the large food
retailer groups and industrial packing contracts. All Joy will also obtain the expertise and experience of
the senior management of Retailer Brands.
4. Pro-forma financial effects
4.1 The table below sets out the unaudited pro forma financial effects of the transaction on the earnings,
headline earnings and the net asset value and tangible net
asset value per All Joy share, based on the assumption that:
4.1.1 for the purpose of calculating the earnings and headline earnings per share as if the transaction was
implemented on 1 March 2004 and using a weighted average of
67 583 317 ordinary All Joy shares in issue for the 12
months.4.1.2 For the purpose of calculating the net asset value
and net tangible asset value per share, the transaction was
effected on 28 February 2005.
Before After Change (cents) (cents) (%)
(1)
Earnings per share (cents) 6,4 14,05 120%
Headline earnings per share 6,3 14,01 122% (cents) (2)
Net asset value per share 36,3 63,05 73,7
(cents) (3)
Net tangible asset value per 34,8 13,07 (62,4)% share (cents) (3)
Notes:
1. Extracted from the audited financial statements of All
Joy for the year ended 28 February 2005.2. Based on a weighted average of 67 583 317 ordinary All
Joy shares in issue for the 12 months ended 28 February
2005.
3. Based on 77 301 650 shares in issue at 28 February2005.
4.2 The financial effects contained in table 4.1
above have been prepared for the purposes of
illustrating how the transaction would have affected the relevant financial results and
position of All Joy for the historical financial
period indicated and on a pro forma basis.
Accordingly, such effects do not necessarily represent a true reflection of the financial
effects of the transaction on All Joy`s current and
future earnings.
5. Further documentation A circular setting out the detailed terms of the
transaction, property acquisition and convening a
general meeting of shareholders to approve the
transaction will be posted to the shareholders after the successful completion of the due diligence, which
is expected to be on or about 26 August 2005.
31 May 2005
JohannesburgDesignated Advisor
Exchange SponsorsDate: 31/05/2005 04:53:10 PM Produced by the JSE SENS Department
