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OFFER BY ASTRAL FOODS TO ACQUIRE ALL OF THE MINORITY SHARES IN NATCHIX

Release Date: 08/08/2001 12:30
Code(s): NCX ARL
Wrap Text
Astral Foods Limited
(Registration number 1978/003194/06)
("Astral Foods")
National Chick Limited
(Registration number 1980/008743/06)
("Natchix")

Offer by Astral Foods to acquire all of the minority shares in Natchix 1. Astral Foods' firm intention to make an offer
Further to the joint cautionary announcement dated 12 July 2001, Rand Merchant Bank and BoE Merchant Bank, a division of BoE Bank Limited, are authorised to announce that Astral Foods has indicated to the board of directors of Natchix its firm intention to make an offer ("the offer") to acquire all of the shares in Natchix not already owned by Astral Foods ("the minority shares"). 2. Rationale for the offer
Astral Foods' strategy is to become a leading company in the food industry in sub-Saharan Africa. Its key activities are in animal feeds, animal feed pre-mixes, broiler genetic breeding and broiler operations. Astral Foods already owns 34,9% of Natchix, which produces and sells day-old chicks for the broiler and egg-producing industries. By acquiring all of the shares in Natchix, Astral Foods will gain critical mass in the technical and genetic sector of the poultry industry. 3. Terms of the offer The material terms of the offer are as follows: 3.1. Price
Astral Foods will offer Natchix shareholders 200 cents per minority share in cash. This represents a premium of 53,8% to the closing price of Natchix shares on the JSE Securities Exchange South Africa ("JSE") on Tuesday 29 May 2001, the day before publication of the first cautionary announcement concerning the offer, and a premium of 11,5% to the closing price on Tuesday 7 August 2001 of 180 cents.
If the offer price is not paid to Natchix shareholders by 31 October 2001, the amount of 200 cents per share will bear interest, with effect from 1 October 2001, at a rate equal to Nedcor Bank Limited's overnight call rate from time to time.
In addition, the board of directors of Natchix will procure that Natchix declares a dividend for the financial year ending 30 September 2001, as follows:
- if the headline earnings per Natchix share are less than 32,5 cents, then Natchix shall not declare a dividend;
- if the headline earnings per Natchix share are 32,5 cents or more but less than or equal to 35,5 cents, then Natchix shall declare and pay a dividend of 10 cents per share; or
- if the headline earnings per Natchix share are more than 35,5 cents, then Natchix shall declare and pay a dividend of 12 cents per share.
"Headline earnings" for these purposes shall be calculated in accordance with Generally Accepted Accounting Practice and on a basis consistent with that applied in the last audited results, but shall exclude:
- any costs related to the implementation of the offer; and
- Secondary Tax on Companies in respect of the final dividend for the 2001 financial year. 3.2. Mechanism for the offer
Astral Foods intends to implement the offer by means of a scheme of
arrangement in terms of section 311 of the Companies Act ("the Act"), or in terms of section 440K of the Act should the scheme of arrangement fail. The alternative mechanism in terms of section 440K of the Act will be
conditional on acceptances being received for not less than 24,7% of the minority shares, so as to constitute Astral Foods the holders of not less than 51% of the entire issued share capital of Natchix.
Astral Foods also reserves the right to implement the offer through any other mechanism should it consider such other mechanism appropriate.
If Astral Foods acquires 100% of the shares in Natchix, it will apply for Natchix's listing on the JSE to be terminated. 3.3. Conditions precedent
The offer is subject to the following conditions precedent:
- due diligence investigations into the legal, financial, tax and
operational affairs of Natchix being conducted to the satisfaction of Astral Foods;
- approval by the JSE, Securities Regulation Panel ("SRP"), the Competition Commission or Tribunal and any other relevant regulatory bodies; and
- the Natchix board of directors approving all resolutions required to facilitate the implementation of the offer. 3.4. Effective date
The effective date of the transaction is intended to be 1 October 2001. 4. Cash confirmation
Astral Foods has received confirmation from its bankers, Nedcor Bank
Limited, that it has sufficient cash resources to carry out the transaction, and has furnished the confirmation to the SRP. 5. Irrevocable undertakings
Astral Foods has obtained irrevocable undertakings from shareholders holding 47% of the minority shares to support the offer (whether by voting in favour of the scheme or by accepting the offer in terms of section 440K of the Act or otherwise).
6. Financial effects of the offer on Natchix shareholders
The table below sets out the financial effects of the offer on the market value of Natchix shares. Shareholders should note that the amount of 200 cents in the "After the offer" column does not include the possible dividend referred to in paragraph 3.1 above.
Before After Percentage
the offer the offer change
Market value per share (cents)1 130 200 53,8%
Market value per share (cents)1 180 200 11,1% Net tangible asset value per
share (cents)2 226,2 200 (11,5)% Notes: 1. "Market value before the offer" is:
- the closing price of a Natchix share on the JSE on Tuesday 29 May 2001, the last trading day prior to publication of the joint cautionary announcement on 30 May 2001; and
- the closing price of a Natchix share on the JSE on Tuesday 7 August 2001, the last trading day prior to publication of this announcement.
2. "Net tangible asset value before the offer" is the net tangible asset value per Natchix share as reflected in the unaudited interim balance sheet as at 31 March 2001. 7. Documentation
A circular containing full details of the offer will be posted to Natchix shareholders by not later than 5 September 2001. An announcement will appear in the press on the same day, setting out the salient details of the offer and the timetable for its acceptance. Pretoria 8 August 2001
Advisers and transactional sponsor to Astral Foods Rand Merchant Bank Corporate Finance A Division of FirstRand Bank Limited Advisers to Natchix BoE Merchant Bank A Division of BoE Bank Limited Co. Reg. 1951/000847/06 Sponsor to Astral Foods ING Barings Sponsor to Natchix BoE Securities (Pty) Ltd
Member of the JSE Securities Exchange South Africa Co. Reg. No. 1995/012240/07

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