Acquisition of the Ma Baker Companies in Kwa-Zulu Natal RHODES FOOD GROUP HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 2012/074392/06) JSE share code: RFG ISIN: ZAE000191979 ("RFG" or "the Company") ACQUISITION OF THE MA BAKER COMPANIES IN KWA-ZULU NATAL Introduction and overview Shareholders are advised that the Company's wholly owned subsidiary, Rhodes Food Group Proprietary Limited ("Rhodes Food"), has entered into an agreement ("Agreement") dated 28 October 2016 in terms of which Rhodes Food will acquire 100% of the issued share capital (“Sale Shares”) of Ma Baker Express Proprietary Limited, Ma Baker Foods Proprietary Limited, Ma Baker Properties (Pinetown) Proprietary Limited, Ma Baker Properties (Pietermaritzburg) Proprietary Limited and Ma Baker Pies Proprietary Limited (collectively the “Ma Baker Companies”) from the Ma Baker Companies’ shareholder (the "Seller") as well as all of the Seller’s loan claims (“Sale Claims”) against each of the Ma Baker Companies (the "Acquisition"). Description of the Ma Baker Companies’ business Ma Baker was founded in 1987 in Pietermaritzburg. It has grown rapidly since inception and today operates manufacturing plants in Pinetown and Pietermaritzburg. Its products are sold and distributed nationally to major retailers, independents and convenience stores through its distribution centres in Johannesburg, Bloemfontein, Port Elizabeth and Cape Town. Its well-established Ma Baker brand is market leader in KwaZulu Natal. Rationale for the Acquisition The board of directors of RFG believes the Acquisition presents an attractive investment opportunity which is aligned with RFG’s strategy of expanding its business operations through value accretive acquisitions. Rhodes Food has a well-established pies and pastries business, producing a range of pastry products under its Magpie and Saint Pie brands from its facility in Aeroton, Gauteng. Rhodes Food also produces pies and pastries under private label for Corner Bakery and Woolworths. The Acquisition will further strengthen Rhodes Food’s position in the pie market by adding another well-known pie brand to its range as well as diversifying its customer base and geographic presence. The board of RFG believes that the Acquisition will create meaningful synergies, not only in the pie business but also with the snacking (Alibaba Foods) and bakery (General Mills SA) operations that were acquired by Rhodes Food within the past year. Acquisition consideration and effective date The Acquisition consideration payable by Rhodes Food to the Seller is R212 240 000 (two hundred and twelve million two hundred and forty thousand rand) less the outstanding balance in respect of third party debt as at the effective date. The Acquisition consideration will be settled in cash. The effective date of the Acquisition is 5 (five) business days after the date of fulfilment or waiver, as the case may be, of the last of the conditions precedent referred to below. Conditions precedent The Acquisition is subject to the following conditions precedent: 1) the unconditional approval of the sale of the Sale Shares and the Sale Claims by the Seller to Rhodes Food by the relevant Competition Authorities or, in the event that such approval is given subject to any condition/s, that the Seller and Rhodes Food confirm in writing that such condition/s is or are acceptable to them, by not later than 28 February 2017; 2) completion of a comprehensive due diligence exercise by Rhodes Food and Rhodes Food being satisfied with the result of such due diligence in its sole and absolute discretion and communicating its satisfaction to the Seller by written notice on or before the 40th (fortieth) business day after the date of signature of the Agreement (“Due Diligence Condition”); 3) approval of the sale of the Sale Shares and the Sale Claims by the Seller to Rhodes Food by the board of directors of RFG, and RFG delivering notice of such approval to the Seller by no later than the 5th (fifth) business day after the date of fulfilment or waiver, as the case may be, of the Due Diligence Condition; and 4) approval of the sale of the Sale Shares and the Sale Claims by the Seller to Rhodes Food by the trustees for the time being of the Seller, and the Seller delivering notice of such approval to Rhodes Food by no later than the 5th (fifth) Business Day after the date of fulfilment or waiver, as the case may be, of the Due Diligence Condition. The revenue and profits attributable to the Ma Baker Companies EBITDA for the financial year ended 28 February 2016 amounted to R23.7 million on revenue of R248.3 million. Schedule 10 of the JSE Listings Requirements To the extent necessary, the board of RFG shall, as soon as possible after the effective date, procure that the memorandum of incorporation of each of the Ma Baker Companies is amended to ensure RFG’s continued compliance with its obligations in terms of the JSE Listings Requirements. Categorisation of the Acquisition The Acquisition does not constitute a categorised transaction in terms of the JSE Listings Requirements and this announcement is therefore made on a voluntary basis. Groot Drakenstein 31 October 2016 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Legal Advisor ENSafrica (Edward Nathan Sonnenbergs Incorporated) Date: 31/10/2016 07:30:00 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. 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