FULL TAKEOVER OFFER FOR MR CHIPS HOLDINGS LIMITED
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Mr Chips Holdings Limited (MCH) | 3:49 pm, Friday 8 August 2008 | MCH | 2.740 |
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DATE: 8 August 2008
TO: Jon Davison
Mr Chips Holdings Limited Email Jon.D@Mr-Chips.co.nz
Roger Macassey
Gallaway Cook Allan Roger.Macassey@gcalegal.co.nz
Tom Barnes
Takeovers Panel Tom.Barnes@takeovers.govt.nz
NZX Announcements
New Zealand Exchange Limited announce@nzx.com
Registrar of Companies
Companies Office By Delivery
FROM: Matt Yates
Direct Phone: +64 4 474 0768
mattyates@quiggpartners.com
IMPORTANT NOTICE: This email contains confidential information. If you have
received this email in error, please delete it
immediately, and inform us of the mistake by return email. Any form of
reproduction, or further dissemination of this email is strictly
prohibited. Thank you
FULL TAKEOVER OFFER FOR MR CHIPS HOLDINGS LIMITED BY SIMPLOT MR CHIPS
LIMITED:
NOTICE OF DESPATCH OF TAKEOVER OFFER
1. We refer to the takeover notice given by Simplot Mr Chips Limited
(Simplot) to Mr Chips Holdings Limited (Mr Chips) on 11 July 2008 in relation
to Simplot's full takeover offer for all ordinary shares in Mr Chips.
2. On behalf of Simplot, we give notice pursuant to Rule 45 of the Takeovers
Code that the Offer
Document has been sent to Mr Chips shareholders today. A copy of the Offer
Document is enclosed.
Yours sincerely
Matt Yates
Solicitor
Quigg Partners
and acting for
Simplot Mr Chips Limited
MY125526
CONTEXT TO SIMPLOT'S OFFER
The potato business is a cyclical business in which Simplot has had a long
history and has extensive knowledge and experience. The projected increased
returns by Mr Chips, a 64% increase on immediate historical earnings, are not
considered to be sustainable at that level going forward.
There is inherent operating uncertainty in achieving the significant step up
in Mr Chips EBIT from its historical base earnings.
Simplot intends spending $7 million in a capital upgrade to plant. This is
significantly above the average annual capital expenditure incurred by Mr
Chips. While this capital will benefit
Mr Chips in the medium term, it will have an adverse impact on short term
cash flow returns to shareholders in the business.
The offer price per share represents a 51.8% premium to Mr Chips closing
price of $1.91 on 16 April 2008, the last day of trading prior to the
announcement by Mr Chips that it was expecting an offer from Simplot.
Since the offer was made and accepted by 81.7% of the existing Mr Chips
shareholders, the New Zealand stock market has retracted by 9.7%, in line
with a tightening global economy and softer regional economic conditions.
SUMMARY OF OFFER
Offer
On 11 July 2008, Simplot Mr Chips Limited ("Simplot") gave notice that it
would make a full offer under the Takeovers Code to acquire all of the
ordinary fully paid shares ("Mr Chips Shares") that are on issue by Mr Chips
Holdings Limited ("Mr Chips").
Key Terms
The key terms of this Offer are:
the consideration will be $2.643 per Mr Chips Share, together with an
entitlement to retain a single cash dividend of up to $0.257 per Mr Chips
Share paid by Mr Chips which has a record date prior to the closing date
under the Offer (the dividend
component being the "Permitted Dividend");
the Offer will be conditional on receipt of acceptances which take Simplot's
voting rights to 90% or more of the voting rights in Mr Chips (Simplot may
waive this condition but a minimum acceptance condition of 50% applies under
the Takeovers
Code); and the Offer will close at 5:00 pm on 19 September 2008 (unless
extended).
Full Terms of Offer
The detailed terms of this Offer are set out in this document.
HOW TO ACCEPT THIS OFFER To accept this Offer by Simplot, you should complete
the Acceptance and Transfer Form enclosed with this Offer in accordance with
the instructions set out on the form.
Then deliver or mail the form(s) in the enclosed prepaid addressed envelope
to:
Simplot Mr Chips Limited
c/- Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Private Bag 92119
Auckland
New Zealand
or fax the completed Acceptance and Transfer Form(s) to:
09 488 8787 (from within New Zealand) or +64 9 488 8787 (from outside New
Zealand).
If you have sold all or some of your Shares, please refer to the instructions
on the cover page of this Offer. Your early response to this Offer will
assist in the processing of acceptances and, if sufficient acceptances are
received, may enable Simplot to declare this Offer unconditional prior to the
closing date.
IMPORTANT: ACCEPTANCES MUST BE RECEIVED BY 5:00 PM ON 19 SEPTEMBER 2008
(SUBJECT TO CLAUSE 1.2 OF THIS OFFER)
A copy of the Terms and Conditions of full Takeover Offer can be requested by
e-mailing lcr@nzx.com