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CNX
CNX
Conafex - Acquisition of an interest in Simply Cereal (Pvt) Limited
CONAFEX HOLDINGS SOCIETE ANONYME
Incorporated in Luxembourg
RC Luxembourg No. B 17789)
("Conafex" or "the company")
JSE CODE: CNX & ISIN: LU0243998001
Acquisition of an interest in Simply Cereal (Pvt) Limited
("Simply Cereal")
1. INTRODUCTION
The Board of Directors of Conafex is pleased to announce that the company
has acquired an interest in Simply Cereal through its wholly owned, South
African subsidiary, Conafex Cape Holdings Limited. Brief details of this
transaction are set out below and a circular letter giving full details
will be sent to shareholders within the next 28 days.
2. NATURE OF BUSINESS AND RATIONALE
Simply Cereal is a South African registered company started in 2003 and is
based in Durban. It specialises in the production and marketing of oat
products and, in particular, breakfast cereals, mueslis and cereal bars in
own brand and private label markets.
Simply Cereal fits Conafex"s strategic plan of an agri-business with good
local markets, a quality range of products, an established brand, a highly
experienced and motivated management team and export potential in the
rapidly growing health and natural foods sector.
3. SALIENT TERMS OF THE ACQUISITION
In terms of the agreement:
- The effective date of the acquisition is 24 July 2006.
- Conafex has acquired 25% of the issued share capital of Simply Cereal
from Morning Foods Limited ("Morning Foods"), a company incorporated
in the United Kingdom. Morning Foods is a leading oat miller and
manufacturer of cereal products in the United Kingdom and retains a
20% interest in Simply Cereal.
4. ACQUISITION CONSIDERATION
The total consideration payable to Morning Foods for the acquisition was
R4,846,950, representing:
- R50 for shares;
- R4,846,900 in respect of loans.
The consideration has been paid in full from the company"s own resources.
5. FINANCIAL EFFECTS OF THE ACQUISITION
- The value of the net assets that are the subject of the transaction is
US$748,000. The pro forma effect on net assets and net tangible
assets per share of Conafex is not significant.
- The profits attributable to the net assets, the subject of the
transaction is US$12,000. The pro forma effect on the historic
earnings and headline earnings of Conafex is not significant.
6. GENERAL PROVISIONS OF THE ACQUISITION
Implementation of certain of the provisions of the agreement between the
parties concerned may require the approval of the Exchange Control Division
of the Reserve Bank of South Africa.
7. CONCLUSION
The acquisition constitutes in excess of 20% but less than 30% of the
consideration to market capitalisation ratio and is categorised as a
Category 2 transaction by the JSE Limited. Thus, this announcement appears
for information only. The transaction is at arms length and does not
require shareholder approval.
By order of the Board
City Group P.L.C.
Group Secretaries
Luxembourg
16 August 2006
Sponsor: Imara Corporate Finance South Africa (Pty) Ltd
Date: 16/08/2006 04:41:03 PM Produced by the JSE SENS Department
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