Introduction
The boards of Almarai Company ("Almarai") and Hail Agriculture Development Company ("Hadco") have reached an agreement on the terms by which Almarai proposes to acquire the entire issued share capital of Hadco (the "Transaction") in accordance with the applicable rules and regulations of the Capital Market Authority ("CMA") (including the Regulations) and the Companies Law. Upon completion of the Transaction, Hadco will be a wholly-owned subsidiary of Almarai. Almarai is making this announcement of its firm intention to proceed with the Transaction in accordance with Article 6(f) of the Regulations.
Almarai has been informed by the Hadco Directors that, provided the terms of the Offer Document reflect the terms of the Transaction as set out in this Announcement, they intend to recommend that Hadco Shareholders vote in favour of the proposed resolutions to approve the Transaction at the Hadco EGM. This recommendation, and any views of the Hadco Directors on the Transaction, will be contained in the Hadco Circular (which will be included within the Offer Document) to be prepared in accordance with the Regulations.
2. Terms of the Transaction
Under the terms of the Transaction, Almarai is proposing to acquire, on the terms set out below and subject to the Conditions, the entire issued share capital of Hadco on the following basis:
For every 5 Hadco Shares held: 1 New Almarai Share; and
For every 1 Hadco Share held: a cash payment of SAR0.50
The terms of the Transaction represent:
• a transaction value of SAR30.1 per Hadco Share, based on Almarai's Closing Price of SAR148.0 on 6 May 2009 (being the last trading day prior to the announcement by Almarai that it had reached an agreement with Hadco dated 9 May 2009 in relation to the Transaction) and the SAR0.50 per Hadco Share cash payment, which together represents a premium of approximately 16 percent in relation to Hadco's Closing Price of SAR26.0 on 6 May 2009 (being the last trading day prior to the announcement by Almarai that it had reached an agreement with Hadco dated 9 May 2009 in relation to the Transaction); and
• a premium of approximately 58 per cent. in relation to Hadco's Closing Price of SAR18.15 on 5
November 2008 and based on Almarai's Closing Price of SAR140.5 on the same date (being the last trading day prior to the announcement by Almarai on 8 November 2008 that it had submitted a formal offer to Hadco).
On the basis of Almarai's Closing Price of SAR 155.75 on 30 June 2009 (being the last trading day prior to this Announcement), and the SAR0.50 per Hadco Share cash payment, the Transaction values Hadco at approximately SAR 949.5 million.
Assuming the Transaction is approved by the Hadco Shareholders at the Hadco EGM, and that the Transaction and the Capital Increase are approved by the Almarai Shareholders at the Almarai EGM and that all the other Conditions are satisfied (or, where appropriate, waived), Hadco Shareholders will hold approximately 5.2 per cent. of the enlarged issued ordinary share capital of Almarai (based on the existing issued ordinary share capital of Almarai and the proposed ordinary share capital of Almarai to be issued to Hadco Shareholders).
3. Financing the Transaction
Almarai will fund the cash consideration payable under the Transaction from its own resources. Morgan Stanley Saudi Arabia is satisfied that Almarai has sufficient resources to satisfy the full amount of the cash consideration payable under the terms of the Transaction.
4. Conditions to the Transaction
The Transaction is (from the time of the release of this Announcement) subject to the Conditions, including (but not limited to) the following:
• Almarai acquiring the entire issued share capital of Hadco.
• The requisite approval of the Transaction by the Hadco Shareholders at the Hadco EGM.
• The passing at the Almarai EGM (or at any adjournment of the meeting) of all resolutions necessary to approve the terms of the Transaction and the related consideration to be received by Hadco Shareholders from Almarai; (ii) approve, fund, effect and implement the Transaction and the acquisition of the entire issued share capital of Hadco; (iii) approve the increase in the share capital of Almarai; and (iv) confer authorities for the creation and allotment of the New Almarai Shares.
• The Hadco Directors recommending, and not having withdrawn or adversely modified their recommendation, to Hadco Shareholders to vote in favour of the Hadco Resolutions.
• The Transaction completing before the Longstop Date.
• The Transaction Agreement not having being terminated by Almarai or Hadco serving notice in writing on the other at any time after a failure by the other to comply with any terms of the Transaction Agreement or any applicable laws or regulations.
• The Transaction being approved by the CMA and other regulatory authorities and the applications for the listing of the New Almarai Shares on the Exchange being approved by the Exchange and the CMA and the New Almarai Shares being admitted to listing and trading by the Exchange in accordance with the Listing Rules.
In addition to the Conditions set out above, the Transaction is subject to other Conditions. All the Conditions will be set out in full in the Offer Document, which will also contain financial and other information in relation to Almarai and the Transaction, and this will be made available in due course (including on Almarai's website on www.almarai.com).5. Information relating to Almarai
Almarai commenced business in 1397H (corresponding to 1976G) under the leadership of HH Prince Sultan bin Mohammed bin Saud Al Kabeer. On 19/12/1411H (corresponding to 1/7/1991G), "Almarai Company Limited" was established as a Saudi Arabian limited liability company with Commercial Registration Number 1010084223. In August 2005, Almarai entered into a new phase of its business development and converted from a private company to a joint stock company and its shares were listed on the Exchange. Almarai is headquartered in Riyadh, Saudi Arabia and its registered office address is Exit 7, North Circle Road, Al Izdihar District, P.O. Box 8524, Riyadh
11492, Kingdom of Saudi Arabia. As at the date of this Announcement, Almarai employs approximately 12,000 employees.
Almarai is the largest integrated dairy foods company in the world. The vertically integrated company covers all key supply chain activities, including dairy farming, food processing, marketing, sales and distribution.
For the fiscal year ended 31 December 2008, Almarai generated a consolidated net profit of SAR910.3 million, which represents an increase of SAR243.0 million or 36.4 per cent. compared to the fiscal year ended 2007, when Almarai posted results of SAR667.3 million.
Further details in relation to Almarai will be contained in the Offer Document.
6. Information relating to Hadco
Hadco was established in 1403H (corresponding to 1982G), with Commercial Registration Number 3350003931. Hadco is a Saudi Arabian joint stock company with its shares listed on the Exchange. Hadco is currently headquartered in Hail, Saudi Arabia and its registered office address is Hail Qassim Main Road, P.O. Box 106, Hail
81411. As at the date of this Announcement, Hadco employs approximately 1,850 employees.
Hadco's primary business activities are poultry-related (including breeding, broiler production, poultry feed production, processing and distribution) and farming (including grain, fodder and vegetable production, poultry feed, horticulture and cold storage).
For the fiscal year ended 31 December 2008, Hadco generated a consolidated net profit of SAR65.4 million, which represents an increase of SAR11.9 million or 22.2 per cent. compared to the fiscal year ended 2007 when Hadco posted results of SAR53.5 million.
7. Transaction Agreement
Almarai and Hadco have entered into the Transaction Agreement which sets out the terms on which the parties intend to complete the Transaction.
Full details on the terms of the Transaction Agreement will be contained in the Offer
Document.8. Interests over Hadco Shares as at 30 June 2009
Except as set out below, Almarai, and persons acting in concert with Almarai (within the meaning given in the Regulations), do not hold any direct or indirect interests in Hadco or Hadco Shares or options to purchase Hadco Shares.
The directors, members of committees formed by the board and executives of Almarai own the following Hadco Shares:
Director / committee member | Number of shares | Percentage of issued share capital (%) |
Ibrahim Hasan Mohammed Al Madhun | 100 | 0.00 |
Abdulrahman bin Abdulaziz Al Muhanna | 65,000 | 0.22 |
Dr. Majed Abdullah Al Gassabi | 260,028 | 0.87 |
Mosa Omran Al Omran | 100 | 0.00 |
Total - Directors and committee members | 325,228 | 1.08 |
Executives | Number of shares | Percentage of issued share capital (%) |
Abdulrahman Al Fadley | 1,000 | 0.00 |
Andrew Mackie | 67,562 | 0.23 |
Georges Schorderet | 30,000 | 0.10 |
Total - Executives | 98,562 | 0.33 |
Total - Directors, committee members and executives | 423,790 | 1.41 |
Almarai has not received any irrevocable commitments from Hadco Shareholders stating that they intend to vote in favour of the terms of the Transaction at the Hadco EGM.
There are no indemnity arrangements involving Almarai, Hadco, or any person acting in concert with Almarai or Hadco, in relation to Hadco Shares.
9. Hadco Shareholder approval
In order for Almarai to acquire the entire issued share capital of Hadco and therefore complete the Transaction, Hadco Shareholders will need to vote in favour of the proposed resolutions to approve the Transaction at the Hadco EGM. Further details on the Hadco EGM, including its timing and the voting and quorum requirements, will be disclosed in the Hadco Circular (which will be included within the Offer Document).
10. Important Information
This Announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.
The implications of the Transaction for persons resident in, or citizens of, jurisdictions outside of Saudi Arabia may be affected by the laws of the relevant jurisdictions. The availability of the Transaction to persons not resident in Saudi Arabia may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements.
This Announcement is not being and must not be published or distributed, in whole or in part, in, into or from any Restricted Jurisdiction.
This Announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities pursuant to the Transaction, this Announcement or otherwise. The offer by Almarai to Hadco Shareholders will be made solely pursuant to the Offer Document, which will contain the full terms and conditions of the Transaction.
This Announcement will be available on Almarai's website at www.almarai.com by no later than 5pm on the date of this Announcement.
Morgan Stanley Saudi Arabia, which is authorised and regulated in Saudi Arabia by the CMA, is acting exclusively for Almarai and no one else in connection with the Transaction and will not be responsible to anyone other than Almarai for providing the protections afforded to clients of Morgan Stanley Saudi Arabia nor for giving advice in relation to the Transaction or any matter or arrangement referred to in this Announcement.
This is an unofficial English translation of the announcement of a firm intention to make an offer published in the Arabic language. No reliance should be placed on this English translation, which may not entirely reflect the official Arabic language announcement.
-Ends-Enquiries:
Almarai
Abdulrahman Al Fadley
C.E.O.
Tel: +966 1 470 0005
Morgan Stanley Saudi Arabia (financial adviser to Almarai)
Teofilo Masera
Managing Director
© Press Release 2011
