Astral Foods Limited - Acquisition By Astral Foods Of Afgri Limited"s 50% Equity

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 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department