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FBR - Famous Brands Limited - Acquisition By Famous Brands Of Mugg And Bean

Release Date: 27/07/2009 09:52
Code(s): FBR
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FBR - Famous Brands Limited - Acquisition By Famous Brands Of Mugg And Bean Franchising Companies ("Mugg & Bean") Famous Brands Limited (Incorporated in the Republic of South Africa) Registration number: 1969/004875/06 Share Code: FBR ISIN: ZAE000053328 ("Famous Brands" or "the Group") ACQUISITION BY FAMOUS BRANDS OF MUGG AND BEAN FRANCHISING COMPANIES ("MUGG & BEAN") 1. INTRODUCTION Further to the cautionary announcement that was released on the Securities Exchange News Service of the JSE Limited ("SENS") on 9 June 2009 and published in the South African press on 10 June 2009, it is announced that Famous Brands has reached an agreement, subject to the conditions precedent set out in paragraph 3 below, in terms of which Famous Brands will acquire the shares in the companies housing the South African and African business of Mugg & Bean ("the acquisition"). 2. THE ACQUISITION 2.1 Rationale for the acquisition The acquisition supports Famous Brands` focus on the growth and development of its best-in-class food service franchise brands. Mugg & Bean is a unique fast casual coffee themed concept and a leader in this category, therefore ideally suited to complement Famous Brands` brand portfolio. The acquisition will also reinforce Famous Brands` position as a leading Quick Service and Casual Dining Restaurant franchisor. 2.2 The business of Mugg & Bean The companies comprise the conduct and operations of the coffee themed Mugg & Bean restaurant franchisor and the procurement of products on behalf of the Mugg & Bean franchisees. 2.3 Purchase consideration Famous Brands will, subject to the conditions precedent set out in paragraph 3 below, acquire Mugg & Bean, for a cash consideration of R104 million. The effective date of the acquisition will be 1 September 2009. 2.4 Financial effects of the acquisition The unaudited pro forma financial effects set out in the tables below have been prepared in accordance with the Listings Requirements of the JSE Limited and the Guide on Pro Forma Financial Information issued by The South African Institute of Chartered Accountants to assist Famous Brands shareholders to assess the impact of the acquisition on the earnings per share ("EPS"), headline EPS ("HEPS"), the net asset value ("NAV") and the tangible NAV ("NTAV") per Famous Brands ordinary share as at 28 February 2009 and for the year then ended. The pro forma financial effects have been prepared for illustrative purposes only and, because of their nature, they may not fairly present Famous Brands` financial position at 28 February 2009 and the results of its operations for the year then ended. It has been assumed for the purposes of the pro forma financial effects that the acquisition took place with effect from 1 March 2008 for Income Statement purposes and 28 February 2009 for Balance Sheet purposes. The Directors of Famous Brands are responsible for the preparation of the financial effects which have been reviewed by Famous Brands auditors. The "After" column represents the effects after the acquisition. The "% Change" column compares the "After" column to the "Before" column. The number and weighted average number of shares in issue have been stated net of treasury shares. Before After % Change (cents per (cents per
share)(1) share)(2,4&5) EPS 159.25 159.68 0,27 Headline EPS 159.20 159.60 0,25 NAV per share(3) 521.50 521.50 0 NTAV per share(3) (71.33) (195.59) (174,2) Weighted average shares 94 397 94 397 (`000) Shares in issue (`000) 94 397 94 397 1. Extracted from Famous Brands` published audited financial statements for the year ended 28 February 2009. 2. The figures for Mugg & Bean were extracted from Mugg & Bean`s audited annual financial statements for the twelve months ended 28 February 2009. 3. Net tangible asset value and net asset value include tangible assets acquired in respect of the acquisition and intangible assets acquired in terms of the acquired intellectual property. Consistent with Famous Brands existing practise, it has been assumed that the intangible assets are indefinite useful life assets and have not been amortised. 4. Transaction costs of R0,8 million relating to the acquisition were included in determining the financial effects. 5. A notional after tax interest rate of 8,5% has been provided for on the cash consideration for the acquisition. 3. CONDITIONS PRECEDENT The implementation of the acquisition is subject to the fulfilment of, inter alia, the following conditions precedent: a) the satisfactory conclusion of a due diligence by Famous Brands within 20 business days; b) approval by the Board of Directors of Famous Brands; and c) the procurement, within 30 days of the conclusion of a due diligence, of the necessary funding by Famous Brands. 4. CLASSIFICATION OF THE ACQUISITION The acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of the JSE Limited. Accordingly, shareholder approval is not required. 5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS Famous Brands shareholders are advised that the cautionary announcement referred to in the first paragraph of this announcement is hereby withdrawn and caution is no longer required to be exercised by Famous Brands shareholders when dealing in Famous Brands` securities. Midrand 27 July 2009 Sponsor: Standard Bank Corporate law advisers to Mugg & Bean: Jurgens Bekker Attorneys Corporate law advisers to Famous Brands: H R Levin Attorneys, Notaries & Conveyancers Date: 27/07/2009 09:52:49 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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