Acquisition of the Zebro’s chicken business announcement and withdrawal of cautionary TASTE HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 2000/002239/06) JSE code: TAS ISIN: ZAE000081162 (“Taste" or "the company") ACQUISITION OF THE ZEBRO’S CHICKEN BUSINESS ANNOUNCEMENT AND WITHDRAWAL OF CAUTIONARY 1. INTRODUCTION AND EFFECTIVE DATE Shareholders are referred to the cautionary announcement, dated 13 December 2013, and are advised that Taste, through a wholly owned subsidiary has entered into a sale of business agreement to acquire the business operated under the brand name Zebro’s Chicken(“the acquisition”). The effective date of the acquisition is 1 March 2014 and all of the suspensive conditions have now been fulfilled. 2. NATURE OF THE BUSINESS OF ZEBRO’S CHICKEN Zebro’s Chicken is a 15-year old brand located mainly in the Western and Eastern Cape, represented through 40 outlets. It is unique in the South African chicken market in that it prepares its products over an open fire similar to a South African ‘braai’, and has a unique flavour profile in the chicken market. It is arguably the only chain of its size using this preparation method and flavour profile. It has since inception targeted mainly the lower income consumer (Living Standards Measure “LSM” 4-6) through low prices and large portions. Its core menu consists of chicken on the bone, chicken burgers, russian-style sausages, fresh- cut chips and assorted salads. Its limited menu and simple preparation method result in the lowest set-up costs for new stores in its category as well as simplified in-store operations. This makes the brand accessible to a wider audience of franchisees and promotes multiple store ownership. Current site locations include shopping malls, rural towns, taxi-ranks, as well as selected higher LSM locations. (www.zebros.co.za) 3. RATIONALE FOR THE ACQUISITION The acquisition follows Taste’s stated strategy of acquiring: - businesses that have significant overlap with the group’s existing vertical integration capacity in both manufacturing and distribution; and - additional brands targeting consumers in the LSM 4-6 category, thereby complementing the over 300 store The Fish & Chip Co. business. As such the rationale for the acquisition is as follows: 3.1. Zebro’s targets lower LSM consumers, a market that is currently underserved by formalised quick service restaurant (“QSR”) brands; 3.2. its trading format is similar to other existing Taste food brands in that: 3.2.1. it has the lowest set-up costs in the chicken segment, which targets similar franchisees to those of the existing The Fish & Chip Co. business; 3.2.2. its focused menu results in easy to manage operations which promotes multiple- and company store ownership; and 3.2.3. its site criteria are similar to those of The Fish & Chip Co. brand, allowing leverage into the existing national property infrastructure of the Taste group; 3.3. as the current Zebro’s business is not vertically integrated there is substantial value to be unlocked by adding its volume to existing Taste capabilities; 3.4. there is significant opportunity for expansion of the brand within South Africa. The current footprint does not include any meaningful penetration outside of the Western and Eastern Cape. Taste envisages accelerated store growth due to Zebro’s similarity to its existing The Fish & Chip Co. business; 3.5. the ability to leverage the existing Taste franchisee base and by utilising the national property; and 3.6. the acquisition is expected to be earnings enhancing to Taste from the first year of consolidation. 4. OTHER SALIENT DETAILS 4.1. The purchase price is R17 million and will be discharged by a combination of cash and vendor placed Taste shares. 50% of the purchase price will be discharged by way of Taste shares issued to the vendors on 3 March 2014 the number of shares being calculated using a 5% discount to the 30 day volume weighted average price on 28 January 2014. 4.2. Mr John Hickman, a co-founder, will remain employed by Zebro’s for at least one year from the effective date. 4.3. Due to its relative size, the acquisition falls below the threshold of a categorised transaction in terms of the Listings Requirements of the JSE Limited and its announcement is therefore voluntary. The board of directors of Taste however deemed it appropriate to provide shareholders with the salient features of the acquisition. 5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are hereby advised of the withdrawal of the cautionary announcement issued on 13 December 2013 and caution is no longer required when dealing in the company’s securities. Johannesburg 29 January 2014 Sponsor Merchantec Capital Legal advisor to Taste Eversheds Attorneys Date: 29/01/2014 07:05:00 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. 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