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The Bidvest Group Limited - Acquisition By Bidvest Of Deli Xl From Ahold Group And Cautionary Announcement THE BIDVEST GROUP LIMITED (Incorporated in the Republic of South Africa) (Registration number 1946/021180/06) Share code: BVT ISIN: ZAE000050449 ("Bidvest") ACQUISITION BY BIDVEST OF DELI XL FROM AHOLD GROUP AND CAUTIONARY ANNOUNCEMENT 1. Introduction Bidvest announces that it has entered into an agreement, under the terms of which it will acquire 100% of the issued share capital of Deli XL B.V. ("Deli XL"), a company incorporated in the The Netherlands, from Koninklijke Ahold N.V. ("Ahold") ("the vendor"), subject to the fulfillment of the condition precedent referred to in paragraph 5 below ("the acquisition"). HSBC Bank plc is acting as transactional financial advisor to Bidvest in relation to the acquisition. 2. History and nature of business Deli XL is the market leading delivered foodservice wholesaler in The Netherlands (estimated 13% market share) and Belgium (estimated 4% market share), with Deli XL Belgium also providing foodservice products to the Luxembourg institutional market, having combined sales in 2004 of Euro819 million. Consolidation of the foodservice industry in these markets has started and Bidvest intends partaking in such process. Deli XL"s Dutch customer base consists of approximately 30 000 clients across three principal segments, being institutions, catering and regional hospitality, with a particularly strong position in the institutions and catering segments. Deli XL"s Belgium customer base of approximately 4 000 clients is segmented into two sectors, being institutions and catering & key accounts. 3. Rationale The acquisition of Deli XL will compliment the existing foodservice business of Bidvest in the United Kingdom. Europe represents a strategic market with growth opportunities in which to continue expanding Bidvest"s international interests in the foodservice industry. The acquisition provides a unique opportunity to acquire a market leading European foodservice business with sufficient scale to realise customer and purchasing synergies. Whilst Deli XL currently has below average returns, as part of the Bidvest foodservices division with Bidvest"s management focus, it is expected to contribute significantly to group performance over time. 4. Salient Terms of the acquisition Bidvest will purchase 100% of the issued shares in Deli XL from the vendor for a consideration of approximately Euro56.7 million and will procure that Deli XL will repay its outstanding net inter-company debt obligations to Ahold on completion, valuing Deli XL at an enterprise value of approximately Euro140 million. The acquisition will be funded from existing banking facilities of Bidvest. The vendor has given warranties which are usual in a transaction of this nature. 5. Condition Precedent The acquisition is subject to receiving European Union competition clearance. 6. Effective Date of the acquisition The effective date of the acquisition is expected to be in the third quarter of the year, once European Union competition clearance is obtained. 7. Financial effects of the acquisition The table below sets out the pro forma financial effects of the acquisition for the 6 month period ended December 31 2004. This is provided for illustrative purposes only. Published Pro forma Increase / Differenc
before after (decrease) % Earnings per share (cents) 319.2 323.3 4.1 1.3% Headline earnings per share 319.5 323.6 4.1 1.3% (cents) Net asset value per share 2,184.1 2,188.1 4.0 0.2% (cents) Net tangible asset value per 1,500.8 1,345.6 (155.2) -10.3% share (cents) Number of shares in issue 304.729 304.729 (million) Weighted average number of 302.991 302.991 shares (million) The "Pro forma after" column assumes that: - the acquisition was implemented with effect from July 1 2004 to determine the earnings and headline earnings financial effects and at December 31 2004 to determine the net asset value and tangible net asset value financial effects; - the financial effects have been determined using Deli XL"s forecast earnings for the six months to 31 December 2005 and a net asset value of approximately nil; - an exchange rate of R8.0848 / Euro1 was applied to convert the financial results of Deli XL to Rand; and - an average interest rate of 2.5 % per annum before tax for the six months ended December 31 2004 was paid on the consideration and the loan indebtedness. 8. Categorisation of the acquisition The acquisition is not a categorised transaction in terms of the JSE Listings Requirements, but in terms of section 9.16 of the JSE Listings Requirements, the acquisition will result in Deli XL becoming a subsidiary company of Bidvest and accordingly the articles of association of Deli XL will be amended to conform to schedule 10 of the JSE Listings Requirements. 9. Cautionary announcement Bidvest is continuing to explore business opportunities, both locally and internationally, in relation to its foodservice business and Bidvest shareholders are accordingly advised to exercise caution in dealing in their shares until a further announcement in this regard is published. Johannesburg July 15 2005 Transaction Dutch legal Belgian legal advisor advisory advisory HSBC Bank plc Houthoff Liederkerke Buruma Wolters
Waaelbroeck Kirkpatrick Advisor and lead sponsor to Bidvest Joint sponsor Investec Bank Deutsche Limited Securities Date: 15/07/2005 09:40:05 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
