arnotts takeover bid for Snackfoods

SNACK FOODS LIMITED 2002-06-05 ASX-SIGNAL-G

HOMEX - Melbourne

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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