+++++++++++++++++++++++++ Arnotts Biscuits Holdings Pty Ltd (ABN 84 080 889 621) ("Arnott's") and Snack Foods Limited (ABN 92 007 130 501) ("Snack Foods") today announced that Arnott's intends to make a recommended cash offer for all of the shares in Snack Foods.
Under the terms of the offer, Snack Foods shareholders will receive $2.025 per share comprising:
* $2.00 in cash for each share from Arnott's; and
* a fully franked special dividend of 2.5 cents per share from Snack Foods. The franking credit which attaches to the special dividend represents 1.071 cents per share.
The record date for the dividend will soon be announced but is intended to be within five days after the takeover offer documents have been despatched to Snack Foods shareholders.
The directors of Snack Foods have evaluated Arnott's offer and unanimously recommend that Snack Foods shareholders accept Arnott's offer in the absence of a higher offer. All Snack Foods directors intend to accept Arnott's offer in respect of their personal shareholdings within two weeks after the offer period opens in the absence of a higher offer.
The aggregate value of the consideration of $2.025 per share provides a substantial premium for Snack Foods shareholders and represents:
* a premium of 31% over the one month volume weighted average price of $A1.55 per share for Snack Foods' shares to the close of trading on 4 June 2002;
* a premium of 33% over the three month volume weighted average price of $A1.52 per share for Snack Foods' shares to the close of trading on 4 June 2002; and
* a premium of 37% over the six month volume weighted average price of $A1.48 per share for Snack Foods' shares to the close of trading on 4 June 2002.
Arnott's has entered into an option agreement with Snack Foods' largest shareholder, Thorney Holdings Pty Limited (ABN 37 006 262 835) ("Thorney"), which holds 30.7% of the issued share capital in Snack Foods. Under this agreement, Thorney has granted an option to Arnott's to acquire under the takeover offer approximately 20% of the shares in Snack Foods (subject to FIRB approval for approximately 5.1%) and Thorney has agreed not to solicit or to discuss any alternative takeover or similar transaction. Thorney intends to accept Arnott's offer in respect of its remaining shares within two weeks after the offer period opens, in the absence of a higher offer.
The Executive Chairman of Thorney, Mr Alex Waislitz, said: "The offer represents an excellent outcome for all Snack Foods shareholders."
Snack Foods' Chairman, Mr Kevin Hayes, said: "The offer is in the best interests of Snack Foods shareholders and the future of the business.
"If the offer is accepted by the shareholders, this will allow Snack Foods to move to the next stage of its growth.
"Arnott's will expand Snack Foods' distribution and have a greater capacity to invest in all areas of the business. It really is an exciting next step in our development."
If the offer is successful, the combined companies will make a significant contribution to food manufacturing in Australia. They will:
* employ more than 3,500 Australians;
* buy approximately $250 million worth of raw materials and services from Australian farmers and businesses;
* operate manufacturing and/or distribution facilities in five states; and
* create an Australian-managed consumer food business with the scale, high profile brands and reputation to continue growing strongly in Australia and overseas.
Arnott's Managing Director, Mr John Doumani, said: "The two businesses complement each other well, as there is little overlap in their product ranges.
"Snack Foods is a great business and I believe we will fit well together. We share the same strong commitment to building great Australian brands and the same commitment to quality and to our people. This will reinforce our commitment to continuing to invest in food manufacturing in Australia.
"Snack Foods' presence in the salty snack food market with its range of mainstream brands, such as Thins, Samboy and CC's, will complement and substantially strengthen our small, niche position in this area held by our Kettle Chip and Rix brands. Our combined expertise will help drive growth in the salty snacks market and give us the scale and knowledge to continue to be successful in Australia's increasingly competitive food industry."
THE BID
Snack Foods' board has agreed to an accelerated offer timetable and Arnott's bidder's statement and Snack Foods' target statement will be despatched as soon as practical. Snack Foods has entered into a letter agreement with Arnott's under which it has agreed not to solicitor, subject to fiduciary duties, to discuss any alternative takeover or similar transaction, and Snack Foods has agreed to pay Arnott's a break fee of 1% of the bid value, if necessary in certain circumstances. The full terms of the letter agreement will be summarised in Arnott's bidder's statement.
Arnott's cash offer will extend to include any new Snack Foods shares issued on the exercise of options. As this is a recommended offer and in accordance with the option terms, Snack Foods will enable options over shares in Snack Foods to be exercised before the record date for the special dividend.
The Arnott's offer will be subject to the following limited conditions:
* a 90% minimum acceptance condition;
* obtaining the required Foreign Investment Review Board (FIRB) approval under the Foreign Acquisitions and Takeover Act;
* the Australian Competition and Consumer Commission advising that it does not propose to take any action in relation tothe offer;
* no material adverse change occurring in relation to Snack Foods;
* no standard prescribed occurrences (as specified under section 652C of the Corporations Act).
TIMING AND NEXT STEPS
Arnott's bidder's statement and Snack Foods' target's statement will be lodged in approximately two weeks with Australian Stock Exchange Limited and the Australian Securities and Investment Commission.
For information about the respective companies, shareholders can visit SnackFoods at www.snackfoods.com.au and Arnott's at www.arnotts.com.au.
Arnott's is being advised by the Caliburn Partnership as financial adviser and Mallesons Stephen Jaques as legal adviser. Snack Foods is being advised by Corrs Chambers Westgarth as legal adviser.
For further information:
ARNOTT'S SNACK FOODS John Doumani Simon Rowell MANAGING DIRECTOR MANAGING DIRECTOR Arnott's Biscuits Snack Foods Limited Ph (02) 9394 3555 Ph (02) 9855 7500 Mobile 0419 971 108
Anna Burr CORPORATE COMMUNICATIONS Arnott's Biscuits Ph (02) 9394 3801