FBR - Famous Brands - Acquisition By Famous Brands Of Cape Franchising

FBR - Famous Brands - Acquisition By Famous Brands Of Cape Franchising          
         (Proprietary) Limited ("Cape Franchising") Master Licence Business     
Famous Brands Limited                                                           
("Famous Brands" or "the company")                                              
Share Code: FBR & ISIN: ZAE000053328                                            
Registration number: 1969/004875/06                                             
ACQUISITION BY FAMOUS BRANDS OF CAPE FRANCHISING (PROPRIETARY) LIMITED ("CAPE   
FRANCHISING") MASTER LICENCE BUSINESS                                           
1.   INTRODUCTION                                                               
    Famous Brands is pleased to announce that it has entered into an agreement  
    with Cape Franchising in terms of which Famous Brands will acquire from     
Cape Franchising the master licence for the Western Cape franchise business 
    ("the Cape Franchising acquisition").                                       
    The effective date of the Cape Franchising acquisition is 1 March 2008,     
    subject to fulfilment of the conditions precedent set out below.            
The Cape Franchising acquisition is a Category 2 transaction in terms of    
    the JSE`s Listings Requirements.                                            
2.   THE ACQUISITION                                                            
2.1  Rationale for the Cape Franchising acquisition                             
Famous Brands, as part of its long term strategy going forward, took the    
    decision to acquire all master licence agreements to ensure that all its    
    franchise businesses are aligned with the current Famous Brands business    
    model and that the manufacture and distribution of product is optimised.    
The Cape Franchising acquisition concludes the buy back of master licenses, 
    with Famous Brands having bought the KwaZulu-Natal master licence in        
    September 1997 and the Eastern Cape license in 2002. The Cape Franchising   
    acquisition ensures that Famous Brands gains ownership and control of all   
aspects of its business.                                                    
2.2  The business of Cape Franchising                                           
    The business of Cape Franchising includes a licensing agreement for the     
    Steers and Debonairs Pizza brands as well as a distribution agreement which 
entitled Cape Franchising to manufacture and distribute all of Famous       
    Brands` products within the Western Cape.                                   
2.3  Purchase consideration                                                     
    The purchase price in respect of the Cape Franchising acquisition comprises 
a cash consideration of R150 million plus an additional amount in respect   
    of the Cape Franchising inventory (which at the date hereof is less than R4 
    million). The aggregate purchase price will be payable on implementation of 
    the Cape Franchising acquisition.                                           
2.4  Financial effects of the acquisition                                       
    The pro forma financial effects of the Cape Franchising acquisition set out 
    below are the responsibility of the company`s directors and have been       
    prepared for illustrative purposes only, to show how the terms of the Cape  
Franchising acquisition would have affected Famous Brands` results for the  
    six month period ended 31 August 2007 ("the interim results"). Due to their 
    nature, the pro forma financial effects may not fairly present the          
    company`s financial position, changes in equity, results of operations or   
cash flows.                                                                 
                           Before         After           Percentage            
                                                          Change                
Net tangible asset value    0.64           (0.50)          (177.5)              
per share ("NTAV") (cents)                                                      
Notes:                                                                          
-    The "Before" column reflects the NTAV as per the interim results;          
-    The "After" column reflects what the NTAV would have been at 31 August 2007
had the Cape Franchising acquisition taken place on 31 August 2007;         
-    The effect of the Cape Franchising acquisition on earnings per share,      
    headline earnings per share and net asset value per share is not material   
    and is therefore not shown.                                                 
3.   CONDITIONS PRECEDENT                                                       
    The implementation of the acquisition is subject to the fulfilment of the   
    following conditions precedent:                                             
-    the completion of a due diligence;                                         
-    approval by the Competition Commission; and                                
-    Famous Brands obtaining the necessary funding.                             
Midrand                                                                         
16 November 2007                                                                
Sponsor                                                                         
Java Capital (Proprietary) Limited                                              
Date: 16/11/2007 08:00:01 Supplied by www.sharenet.co.za                     
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