Charlie s Group receives cash takeover offer from Asahi

Transcription

1 offer 1 Monday, 4 July 2011 Charlie s Group receives cash takeover offer from Asahi - Asahi Beverages New Zealand Limited (Asahi) is to offer NZ$0.44 in cash for each share in Charlie s Group Limited (Charlie s) - Charlie s major shareholders, including the founders, representing per cent of the Charlie s shares have agreed to accept the Offer - The Charlie s Board of Directors recommends that Charlie s shareholders accept the Offer in the absence of a superior proposal and subject to the offer price being within or higher than the Independent Adviser s valuation range - The Offer is subject to a number of conditions, including Asahi obtaining acceptances for 90 per cent of the shares in Charlie s and consent from the Overseas Investment Office (OIO) The Board of Directors of Charlie s (Charlie s Board) advises that it has received a Takeover Notice from Asahi Beverages New Zealand Limited, a wholly owned subsidiary of Asahi Group Holdings, Ltd., stating Asahi s intention to make an offer under the New Zealand Takeovers Code to purchase 100 per cent of the issued share capital of Charlie s (the Offer). The Offer is for NZ$0.44 in cash for each Charlie s share and represents a 57 per cent premium to Friday s closing share price of NZ$0.28. The Offer is subject to a number of conditions, including Asahi receiving acceptances for shares which confer 90 per cent or more of the voting rights in Charlie s and all consents required from the OIO. The full conditions of the Offer are set out in the Takeover Notice, which has been lodged with NZX. Approach by Asahi and commitment to accept by major shareholders Following an approach by Asahi in relation to a potential acquisition of all the shares in Charlie s, the Charlie s Board agreed to provide Asahi with a short period of due diligence on the Charlie s business. Upon completion of that due diligence, Asahi has entered into lock in agreements with interests associated with the founders of the business (Stefan Lepionka, Marc Ellis and Simon Neal), Collins Asset Management and Charlie s director Tim Cook. Together these shareholders hold a total of per cent of the shares in Charlie s and have committed to accept the offer when it is made.

2 Offer 2 The Offer Document is expected to be despatched to shareholders in the week commencing 18 July Charlie s Chief Executive Officer and co founder, Stefan Lepionka says the Offer represents a great outcome for the business and its brands at this stage of the group s lifecycle. As a proud New Zealand company, we have fought hard to take Charlie s to the world, and we continue to do so. To take Charlie s to the next level, our brands will benefit from the substantial resources that Asahi brings to the table. Asahi admires our team and recognises the value in keeping Charlie s as it is, to nurture our honest ideology and reputation for innovation. Asahi s intentions for Charlie s If Asahi acquires all of the Charlie s Shares, it intends to continue to operate the Charlie s business as a standalone business, while supporting the existing management team in their current plans for growth, as well as providing access to the Asahi Group s distribution network, innovation and other technical capabilities. Asahi has indicated that it intends to continue to invest in Charlie s to grow its brands, while retaining their premium positioning and strong culture of innovation. Managing Director of Asahi Group Holdings, Ltd. s wholly owned subsidiary, Schweppes Australia Pty Ltd, David Beguely said We are thrilled to be part of this very exciting venture and are excited to partner with such an innovative organisation with quality, premium brands. Charlie s complements the Schweppes Australia business very well. It particularly enhances our position in the premium beverage segments as well as providing a foothold in the New Zealand market. We are very much looking forward to working with Stefan and Charlie s to help grow and expand the reach of their brands. Director s recommendation Asahi s offer price of NZ$0.44 per Charlie s share, which the major shareholders have agreed to accept, represents: a 57 per cent premium to the closing price and a 55 per cent premium to the one month volume weighted average price of Charlie s shares on NZX; and EV/EBITDA multiples of 27.4 times the midpoint of Charlie s EBITDA guidance for the financial year ended 30 June 2011 and 11.5 times Charlie s EBITDA guidance for the financial year ending 30 June Enterprise Value to Earnings Before Interest, Tax, Depreciation and Amortisation (EV/EBITDA) calculated on the basis of Charlie s market capitalisation of NZ$129.3 million at the offer price of NZ$0.44 per Charlie s share and net debt as at 31 December 2011 of NZ$0.8 million.

3 Offer 3 For shareholders who acquired shares on Charlie s listing in 2005, the offer price represents a 340 per cent total return. The Charlie s Board unanimously recommends that Charlie s shareholders accept the Offer in the absence of a superior proposal and subject to the offer price being within or higher than the Independent Adviser s valuation range. The Independent Directors have commissioned Grant Samuel to provide an Independent Adviser s report as required by the Takeovers Code. The Independent Directors have indicated they will accept the Offer in respect of the Charlie s Shares they own in the absence of a superior proposal and subject to the offer price being within or higher than the Independent Adviser s valuation range. Charlie s Chairman Ted van Arkel said that the Offer represents a strong endorsement of Charlie s and its market positioning, and that the Board has been pleased with Asahi s commitment to the process of making an offer for the group. Mark Darrow and I as independent directors are charged with representing the interests of all shareholders, and we have ensured that a robust process has been undertaken which has led to this offer. As a result, Asahi s intended offer represents a very strong premium over market for shareholders to consider. Mr van Arkel noted that no action in respect of the Offer is required from shareholders at this stage, however, in the interim if they are considering selling their shares they should seek independent advice. Update on Charlie s trading The Charlie s Board believes that Charlie s is well placed to continue to grow strongly and capitalise on recent successes including distribution agreements with Coles and Woolworths in Australia and several customers in Asia. Charlie s reiterates guidance previously provided on 12 April 2011 for the financial year ended 30 June 2011: Gross sales of between NZ$48 million and NZ$50 million; EBITDA (earnings before interest, tax, depreciation and amortisation) of between NZ$4.5 million and NZ$5.0 million; and NPAT (net profit after tax) of between NZ$2.2 million and NZ$2.5 million. The Charlie s Board has approved a budget for the year ending 30 June 2012 with gross sales growing to NZ$91 million, EBITDA rising to NZ$11.3 million and NPAT to NZ$7.1 million. The improvements in sales, EBITDA and NPAT reflect sales growth in the Australian grocery channel, including previously announced ranging by Coles and Woolworths of Charlie s products, as well as improved margin performance arising from increased economies of scale at Renmark and

4 Offer 4 Henderson and improved terms for certain raw material contracts. The budget figures stated above for the year ending 30 June 2012 do not include any costs relating to the potential sale of shares to Asahi Beverages New Zealand Limited. Takeover offer documents The Charlie s Board and Asahi have agreed to co ordinate the preparation of the documents they are each required to send pursuant to the Takeovers Code, with a view to Asahi sending its Offer Document together with the Charlie s Target Company Statement, including the Independent Adviser s report and the Charlie s Board s recommendation, to Charlie s shareholders in the week beginning 18 July. Charlie s is being advised by Macquarie Capital and Harmos Horton Lusk. Asahi is being advised by Rothschild, and Bell Gully. Announcement authorised by: Ted van Arkel Chairman Charlie s Group Limited David Beguely Director Asahi Beverages New Zealand Limited For further information on Charlie s, please contact: Stefan Lepionka Chief Executive Officer Ph: Pead PR Deborah Pead Ph: ; For further information on Asahi, please contact: Senescall Akers (New Zealand enquiries) Geoff Senescall Ph: ; Steve Murphy (Australian enquiries) FD Third Person Ph: About Charlie s: Charlie s Group Limited is a New Zealand owned company listed on the New Zealand Stock Exchange and operating principally in the Australasian market. The company manufactures and markets a range of not from concentrate and organic beverages. Principal brands are Charlie s and Phoenix Organics. The business was established by friends Stefan Lepionka (CEO), Marc Ellis (director) and Simon Neal (distribution manager) in 1999 and floated on the New Zealand Stock Exchange in July Charlie s operates in New Zealand and Australia and exports to territories in Asia, the Pacific, the Middle East and the Indian subcontinent. About Asahi Group Holdings, Ltd.: The Asahi group, headed by Asahi Group Holdings, Ltd., a Tokyo Stock Exchange listed company, is a leading Japanese alcoholic beverages and soft drinks manufacturer, which turns over 1.5 trillion Yen annually. Alcohol represents approximately 70 per cent of Asahi s business, with soft drinks comprising approximately 20 per cent. The remainder of Asahi s business is made up of food and

5 Offer 5 healthcare products. Asahi has operations in Japan, China and Australia. Schweppes Australia is a wholly owned subsidiary of Asahi. About Asahi Beverages New Zealand Limited: Asahi Beverages New Zealand Limited is a wholly owned subsidiary of Asahi Group Holdings, Ltd. About Schweppes Australia: Schweppes Australia is Australia s second largest non alcoholic beverage manufacturer, which makes, markets and sells soft drinks, fruit juices, mineral and still water, sports drinks and cordials. Leading brands include Schweppes, Solo, Cottee s, Cool Ridge and Spring Valley. It manufactures Pepsi, Gatorade and Sunkist products under licence and distributes Monster Energy under licence in Australia. Editors please note: Schweppes Australia does not operate within New Zealand. The Schweppes brand in New Zealand is not owned by Schweppes Australia and Schweppes branded products in New Zealand are manufactured by a company not associated with Schweppes Australia.