arnotts takeover bid for Snackfoods

  1. 3,290 Posts.

    HOMEX - Melbourne

    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

    "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

    * 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."


    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

    * 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).


    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 and Arnott's at

    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:

    John Doumani Simon Rowell
    Arnott's Biscuits Snack Foods Limited
    Ph (02) 9394 3555 Ph (02) 9855 7500
    Mobile 0419 971 108

    Anna Burr
    Arnott's Biscuits
    Ph (02) 9394 3801
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