Dairy Crest Regulatory News (DCG)

9 Nov 2006 07:01

Dairy Crest Group PLC09 November 2006 For Immediate ReleaseDairy Crest Group plc9 November 2006 DAIRY CREST GROUP PLC PROPOSED ACQUISITION OF ST HUBERT FOR €370 MILLION (£248 MILLION) Dairy Crest Group plc ("Dairy Crest") today announces that it has entered intoan agreement intended to lead to the purchase of Saint Hubert SAS ("St Hubert"),the French and Italian spreads business of Uniq plc ("Uniq"), for €370 million(approximately £248 million). St Hubert is a leading participant in the Frenchspreads market with a market share of approximately 31%. It has a strong marketposition in the growing Healthy spreads category, with its core brands "StHubert Omega 3" and "St Hubert Cholegram". Its other brands include "St Hubert41" and "Le Fleurier". It is also the market leader in the small Italian spreadsmarket with its "Valle" brand. In the first full year the Directors expect that the Acquisition will beearnings accretive and will generate a return on invested capital in line withDairy Crest's weighted average cost of capital. Strategic Rationale for the Acquisition The fundamental aim of Dairy Crest's strategy is to grow its business byinvesting in sectors where it has the ability to add value through buildingstrong brands. The Directors believe that St Hubert has strong brands and goodmarket positions in both France and Italy and believe that the Acquisitionoffers many benefits and opportunities including: • Increasing the proportion of Dairy Crest profits deriving from brands. Together with the recent disposal of the majority of Dairy Crest's retailer brand cheese operations, the Acquisition will significantly improve the Group's overall quality of earnings;• Operational and commercial opportunities from linking St Hubert with Dairy Crest's existing UK spreads business; and• The move into Continental Europe should provide opportunities for future growth. St Hubert The French spreads market is principally a branded market with threemanufacturers (including St Hubert) holding a market share of over 90%. In theyear to August 2006 the market grew by 1% to €422 million (£283 million). Withinthis the Healthy spreads category, of which St Hubert has a 35% share, grew by10%. • St Hubert has: - a wholly branded portfolio with high levels of retail distribution and established relationships with all the major French retailers; - a 31% market share of the French spreads market; - an experienced and capable management team which is expected to remain with the business; - efficient production facilities at its Ludres plant with low future capex requirements; and - a track record of innovation in high growth value-added sectors.• In the financial year ended 31 March 2006, St Hubert had sales of €93.5 million (£62.7 million), operating profit (EBIT) of €28.4 million (£19.0 million) and EBITDA of €34.0 million (£22.8 million). The Acquisition price therefore represents a multiple of 10.9 times 2005/06 EBITDA.• St Hubert has strong cash generation with low capital requirements. Financing arrangements for the Acquisition The cash consideration will be funded from new bank facilities totalling £200million, existing borrowing arrangements and the proceeds of the Placing, which will be separately announced today. Conditions of the transaction and break fees Dairy Crest has entered into a Memorandum of Understanding ("MOU") whichobligates Dairy Crest but not Uniq to enter into the Acquisition Agreementfollowing completion of the Workers Consultation. The Acquisition is conditional upon:• Dairy Crest obtaining the approval of its shareholders; and• Uniq obtaining the approval of its shareholders. Assuming the conditions are satisfied, Completion is expected to occur in early2007. Break fees are payable by both Dairy Crest and Uniq in certain circumstances ifthe Acquisition does not complete. A summary of the principal terms of theAcquisition is set out in section 6 of this announcement. Chief Executives' comment: Commenting on the Acquisition Drummond Hall, Chief Executive, and Mark Allen,Chief Executive Elect, of Dairy Crest, said: "We believe that St Hubert is a strong business with a 100% branded portfolio ina sector that we know and understand well. The acquisition significantlyincreases the proportion of our profits coming from brands and as a result itimproves the overall quality of our earnings. In addition the move intocontinental Europe should provide opportunities for future growth." Dairy Crest's interim results for the six months ended 30 September 2006 havebeen announced separately today. For further information, please contact: Dairy Crest:Will Shaw, Investors + 44 (0) 7919 568498Nicole Lander, Media + 44 (0) 7801 235756 Brunswick: + 44 (0) 20 7404 5959Simon Sporborg / Laura Cummings Rothschild: + 44 (0) 20 7280 5000Avi Goldberg / James Murray McQueen: + 44 (0) 20 7484 8800Luke Withnell Hoare Govett: + 44 (0) 20 7678 8000Antonia Rowan / Neil Collingridge Citigroup: + 44 (0) 20 7969 0518Chris Zeal / Darrell Uden N M Rothschild & Sons Limited, which is authorised and regulated in the UnitedKingdom by the Financial Services Authority, is acting as financial adviser tothe Company in connection with the Acquisition and will not be responsible toany person other than the Company for providing the protections afforded tocustomers of N M Rothschild & Sons Limited, or for advising any such person onthe contents of this announcement or any other transaction, arrangement or matter referred to herein. McQueen Limited, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting as financial adviser to the Company inconnection with the Acquisition and will not be responsible to any person other than the Company for providing the protections afforded to customers of McQueenLimited, or for advising any such person on the contents of this announcementor any other transaction, arrangement or matter referred to herein. Hoare Govett Limited, which is authorised and regulated in the United Kingdom bythe Financial Services Authority, is acting as joint broker and jointunderwriter to the Company in connection with the Placing and will not beresponsible to any person other than the Company for providing the protectionsafforded to customers of Hoare Govett Limited, or for advising any such personon the contents of this announcement or any other transaction, arrangement ormatter referred to herein. Citigroup Global Markets Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting as joint brokerand joint underwriter to the Company in connection with the Placing and will notbe responsible to any person other than the Company for providing theprotections afforded to customers of Citigroup Global Markets Limited, or foradvising any such person on the contents of this announcement or any othertransaction, arrangement or matter referred to herein. This announcement includes statements that are, or may be deemed to be, "forwardlooking statements". These forward looking statements can be identified by theuse of forward looking terminology, including the terms "believes", "estimates","plans", "anticipates", "targets", "aims", "continues", "expects", "intends","hopes", "may", "will", "would", "could", or "should" or, in each case, theirnegative or other variations or comparable terminology. These forward lookingstatements include matters that are not facts. They include statements regardingthe Group's intentions, beliefs, or current expectations concerning, among otherthings, the Group's and/or the Enlarged Group's results of operations, financialcondition, liquidity, prospects, growth, strategies and the industries in whichthe Group and/or the Enlarged Group operates. By their nature, forward lookingstatements involve risk and uncertainty because they relate to future events andcircumstances. A number of factors could cause actual results and developmentsto differ materially from those expressed or implied by the forward lookingstatements including, without limitation: the Company's ability successfully tocombine the business of the Group and the business of St Hubert and to realiseexpected synergies from that combination, conditions in the markets, marketposition of the Company or its subsidiaries, earnings, financial position, cashflows, return on capital and operating margins, anticipated investments andcapital expenditures, changing business or other market conditions and generaleconomic conditions. These and other factors could adversely affect the outcomeand financial effects of the plans and events described in this announcement.Forward looking statements contained in this announcement based on past trendsor activities should not be taken as a representation that such trends oractivities will continue in the future. Save as required by law or by theListing Rules, the Prospectus Rules or the Disclosure Rules, Dairy Crest doesnot undertake any obligation to update or revise any forward looking statements,whether as a result of new information, future events or otherwise. Unduereliance should not be placed on forward looking statements, which areapplicable only as at the date of this announcement. No statement in this announcement is intended to constitute a profit forecast,nor should any statements be interpreted to mean that earnings or earnings perordinary share will necessarily be greater or lesser than those for the relevantpreceding financial periods for Dairy Crest or Uniq. Rather, these statementsshould be construed as references to potential enhancements to the earnings thatmight otherwise have been earned during the relevant financial period. Appendix I contains further financial information on St Hubert. Appendix II contains the definitions of certain terms used in this announcement. This summary should be read in conjunction with the full text of the followingannouncement. For Immediate Release Dairy Crest Group plc 9 November 2006 DAIRY CREST GROUP PLC PROPOSED ACQUISITION OF ST HUBERT FOR €370 MILLION (£248 MILLION) 1. Introduction The Dairy Crest Board announces today that the Company has entered into anagreement intended to lead to the acquisition of the entire issued share capitalof St Hubert from Uniq plc (the "Acquisition"). St Hubert is a leadingparticipant in the French spreads market with a market share of approximately31%. It has a strong market position in the growing Healthy spreads category,where its core brands are "St Hubert Omega 3" and "St Hubert Cholegram". Itsother brands include "St Hubert 41" and "Le Fleurier". It is also the marketleader in the small Italian spreads market with its "Valle" brand. On completion Dairy Crest will pay €370 million (approximately £248 million) incash. This will be funded from new bank facilities totalling £200 million,existing borrowing arrangements and the proceeds of the Placing, beingseparately announced today. The fundamental aim of Dairy Crest's strategy is to grow its business byinvesting in sectors where it has the ability to add value through buildingbrands. The Directors believe that St Hubert has strong brands and good marketpositions in both France and Italy. In addition the move into continental Europeshould provide opportunities for future growth. Under French law, St Hubert must carry out the Workers Consultation before Uniqcan enter into the Acquisition Agreement. Following completion of the WorkersConsultation, it is intended that Dairy Crest and Uniq enter into theAcquisition Agreement, which will be conditional upon both Dairy Crest and Uniqobtaining the approval of their shareholders. The Circular convening theExtraordinary General Meeting will be posted to Dairy Crest shareholders in duecourse. Assuming Dairy Crest and Uniq shareholder approval is obtained,Completion is expected to occur in early 2007. 2. Background to and reasons for the Acquisition Dairy Crest has a leading position in the UK butter and spreads market where ithas grown both organically and through acquisition, including the successfulacquisition of the St. Ivel Spreads business from Uniq in 2002. Dairy Crest'sbutter and spreads portfolio includes Clover and Utterly Butterly, the twomarket leaders in the dairy spreads segment, Country Life, St. Ivel Gold,Vitalite and Willow. These brands give Dairy Crest a presence in every majorsector of the UK butter and spreads market. Dairy Crest also has a strong branded position across the dairy sector includingCathedral City, the UK's biggest cheddar brand, and a market leading position inchildren's fromage frais through its UK joint venture with Yoplait. The Directors believe that the acquisition of St Hubert further develops DairyCrest's branded activities and is an excellent fit with group strategy. Inparticular the Board believes the Acquisition will have the following specificbenefits: • Secures a fully branded business which has leading positions in the French and Italian spreads markets. This increases the proportion of Group profits generated from highly recognised brands. It also enables the Group to build relationships with key French retailers;• St Hubert is a good fit with Dairy Crest's existing spreads business in the UK. This should provide opportunities to leverage both operational and commercial best practice from both businesses to grow Dairy Crest's overall spreads franchise;• The Acquisition provides an entry point into the attractive French spreads market, which is principally a branded market with three manufacturers holding a market share of over 90%. In the year to August 2006 the market grew at 1% to €422 million (£283 million). Within this the Healthy spreads category, of which St Hubert has a 35% share, grew by 10%;• St Hubert is the market leader in the small Italian spreads market with a 48% market share;• St Hubert has an experienced and capable management team which is expected to remain with the business;• The production facilities at Ludres are efficient with low future capital expenditure requirements;• St Hubert has a track record of innovation in high growth value-added sectors;• Whilst St Hubert already has a strong market position in France Dairy Crest has the opportunity to grow the business further by increasing marketing support behind both the existing brands and new product development;• The move into Continental Europe should in the future provide opportunities for growth; and• The Directors expect that in the first full year the Acquisition will be earnings accretive and will generate a return on invested capital in line with Dairy Crest's weighted average cost of capital. 3. Information on St Hubert St Hubert is a leading manufacturer in the French spreads market, which isestimated to be worth approximately €422 million (£283 million) at retail salesvalue. The market can be segmented into traditional "Classic" and "Healthy"spreads. The Healthy spreads segment can be further divided into twosub-segments "Healthy Preventative", mainly Omega 3 products, and "HealthyCurative", mainly cholesterol reducing products. St Hubert is the second largest player in the overall French spreads market witha market share of approximately 31%. It has strong market positions in both theHealthy and Classic segments of the market with the following brands: • St Hubert Omega 3: a Healthy spread, launched in 2002, as the first Omega 3 spread in the market. This is a very successful brand and the leading product in the Healthy Preventative sub-segment of the market. In the year to August 2006 the brand grew by 42% at retail sales value. In the wider "Healthy" market it has a market share of 29%;• St Hubert Cholegram: an anti-cholesterol spread, relaunched in February 2006 as a replacement for the "Ilo" brand, positioned within the growing Healthy Curative sub-segment of the market. Since its relaunch it has a 6% share of the "Healthy" market;• St Hubert 41: a Classic spread, launched in 1981, targeting consumers with health concerns (low fat) but looking for a buttery taste. It is one of the leading brands in the "Classic" market, with a market share of 14%. In the year to August 2006, brand sales fell by 8% at retail sales value; and• Le Fleurier: a Classic spread, launched in 1989, positioned in the healthy cooking segment of the market, with a market share of 11%. In the year to August 2006, brand sales fell by 6% at retail sales value. St Hubert is headquartered in Rungis, a suburb of Paris, and has a dedicatedmanufacturing facility at Ludres near Nancy in the east of France. St Hubertoperates a fully integrated sales, marketing, production and distribution systemin France and St Hubert spreads are sold in most French super and hypermarkets. Through its wholly owned subsidiary, St Hubert also sells spreads andconvenience products in Italy. St Hubert owns Valle, the leading brand on theItalian spreads market with a market share of 48%. Italian operationsrepresented approximately 13% of turnover in 2006. Historically, St Hubert has demonstrated a strong financial track record withsustained revenue growth combined with high and stable margins. St Hubert alsohas low capital requirements and is a strong cash generator. The low capitalrequirements also result in a low depreciation charge. 4. Summary financials for St Hubert • million 12 months ended 6 months ended 31 March 2004 31 March 2005 31 March 2006 30 Sept 2006 Sales 89.2 92.0 93.5 47.4EBIT 26.8 32.7 28.4 15.2EBITDA 32.0 37.9 34.0 17.2Capitalemployed* 21.5 16.6 14.5 9.7 * Excluding cash and intercompany indebtedness In the year ended 31 March 2005 the increased profitability reflects the factthat marketing expenditure on the St Hubert brands was well below normal levels. More detailed financial information on St Hubert is provided in Appendix I. 5. Employees It is the intention of Dairy Crest that St Hubert's senior management team andcurrent employees remain with St Hubert following Completion. St Hubert will beintegrated into Dairy Crest's Foods division with Patrick Cahuzac (currently Directeur General) remaining in the same position. St Hubert currently employsapproximately 180 people. 6. Principal Terms of the Acquisition Under the terms of the Acquisition Agreement the consideration payable for StHubert is €370 million (£248 million) in cash. Dairy Crest has entered into a Memorandum of Understanding ("MOU") with Uniq,which contains the following provisions during the Exclusivity period: • the grant of exclusivity by Uniq in favour of Dairy Crest in relation to the sale of St Hubert;• an obligation on Dairy Crest, but not Uniq, to enter into the Acquisition Agreement following conclusion of the Workers Consultation;• obligations on Uniq to carry on the management of the St Hubert business in the ordinary course of business and to conduct the Workers Consultation; and• an obligation on Uniq to pay a break fee of £2.0 million to Dairy Crest if Uniq fails to enter into the Acquisition Agreement following the completion of the Workers Consultation. The MOU will terminate, and the parties released from any further obligationsthereunder, on the earlier to occur of the entering into of the AcquisitionAgreement and 19 January 2007. Although the Board cannot be certain that Uniq will enter into the AcquisitionAgreement, the Board expects that Uniq will do so. The Acquisition Agreement contains the following key provisions: • a purchase price for St Hubert of €370 million. While there is no purchase price adjustment mechanism, Uniq has given Dairy Crest certain warranties and covenants on a full indemnity basis relating to not taking cash out of the St Hubert business after 30 September 2006 and before Completion, except as specifically provided for in the Acquisition Agreement;• Completion conditional on the approval of both Dairy Crest and Uniq shareholders;• a break fee of £2.5 million (representing approximately 1% of the Acquisition consideration) payable by Dairy Crest to Uniq, if Dairy Crest either fails to make or withdraws a recommendation to its shareholders to vote in favour of the Acquisition;• a break fee of £2.0 million (representing approximately 1% of Uniq's market capitalisation) payable by Uniq to Dairy Crest, if Uniq either fails to make or withdraws a recommendation to its shareholders to vote in favour of the disposal of St Hubert to Dairy Crest;• a covenant by Uniq not to compete with the St Hubert business for a period of 18 months after Completion; and• warranties and indemnities given by Uniq to Dairy Crest relating to the accounts, business, operations and tax position of St Hubert. After Completion for an initial period of 12 months, Uniq will provideaccounting, administration and IT services to St Hubert. 7. Extraordinary General Meeting As the Acquisition is conditional on Dairy Crest shareholder's approval, DairyCrest will post the Circular to Dairy Crest shareholders as soon as practicable,and in any event no later than two weeks, after the Acquisition Agreement isentered into. The Board expects that the Dairy Crest and Uniq shareholdermeetings to consider the Acquisition will take place in early 2007. The precisetiming of these meetings will depend on the date on which the AcquisitionAgreement is entered into. 8. Funding The cash consideration will be funded from new bank facilities totalling £200million, existing borrowing arrangements and the proceeds of the Placing, which will be separately announced today. The Placing has been fully underwritten by Hoare Govett and Citigroup. 9. Financial effects of the Acquisition The Directors expect that the Acquisition will enhance earnings per share in theyear to 31 March 2008, the first full year after the Acquisition. The Directors expect that the return on invested capital from the Acquisitionwill be in line with Dairy Crest's weighted average cost of capital in the firstfull year following the Acquisition and will exceed it in the second full year. It is envisaged that, excluding fees in relation to the Acquisition, there willbe no one-off costs associated with the Acquisition. 10. Current trading and prospects for the Enlarged Group Dairy Crest Dairy Crest's interim results for the six months ended 30 September 2006 havebeen announced separately today. For the six months ended 30 September 2006, Dairy Crest had sales of £662.6million and adjusted profit before tax (from continuing operations, includingshare of joint ventures and before exceptional items and amortisation ofacquired intangibles) of £31.8 million. Business highlights and recent developments outlined in the interim results are: • Active six months with strong profit growth;• Good performance from Cathedral City, Country Life and Frijj;• Country Life extended as a cross-category brand with the launch of premium cheese range and organic milk;• Sale of majority of retailer brand cheese operations completed for £61.9m;• Improved performance from the Dairies division; and• Acquisition of Express Dairies creates UK's leading doorstep and middle ground business. St Hubert For the six months ended 30 September 2006, St Hubert had sales of €47.4 million(£31.8 million), operating profit (EBIT) of €15.2 million (£10.2 million) andEBITDA of €17.2 million (£11.5 million). For further information, please contact: Dairy Crest:Will Shaw, Investors + 44 (0) 7919 568498Nicole Lander, Media + 44 (0) 7801 235756Brunswick: + 44 (0) 20 7404 5959Simon Sporborg/ Laura Cummings Rothschild: + 44 (0) 20 7280 5000Avi Goldberg / James Murray McQueen: + 44 (0) 20 7484 8800Luke Withnell Hoare Govett: + 44 (0) 20 7678 8000Antonia Rowan / Neil Collingridge Citigroup: + 44 (0) 20 7969 0518Chris Zeal / Darrell Uden This announcement has been issued by, and is the sole responsibility of, DairyCrest. N M Rothschild & Sons Limited, which is authorised and regulated in the UnitedKingdom by the Financial Services Authority, is acting as financial adviser tothe Company in connection with the Acquisition and will not be responsible toany person other than the Company for providing the protections afforded tocustomers of N M Rothschild & Sons Limited, or for advising any such person onthe contents of this announcement or any other transaction, arrangement or matter referred to herein. McQueen Limited, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting as financial adviser to the Company inconnection with the Acquisition and will not be responsible to any person other than the Company for providing the protections afforded to customers of McQueenLimited, or for advising any such person on the contents of this announcementor any other transaction, arrangement or matter referred to herein. Hoare Govett Limited, which is authorised and regulated in the United Kingdom bythe Financial Services Authority, is acting as joint broker and jointunderwriter to the Company in connection with the Placing and will not beresponsible to any person other than the Company for providing the protectionsafforded to customers of Hoare Govett Limited, or for advising any such personon the contents of this announcement or any other transaction, arrangement ormatter referred to herein. Citigroup Global Markets Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting as joint brokerand joint underwriter to the Company in connection with the Placing and will notbe responsible to any person other than the Company for providing theprotections afforded to customers of Citigroup Global Markets Limited, or foradvising any such person on the contents of this announcement or any othertransaction, arrangement or matter referred to herein. This announcement includes statements that are, or may be deemed to be, "forwardlooking statements". These forward looking statements can be identified by theuse of forward looking terminology, including the terms "believes", "estimates","plans", "anticipates", "targets", "aims", "continues", "expects", "intends","hopes", "may", "will", "would", "could", or "should" or, in each case, theirnegative or other variations or comparable terminology. These forward lookingstatements include matters that are not facts. They include statements regardingthe Group's intentions, beliefs, or current expectations concerning, among otherthings, the Group's and/or the Enlarged Group's results of operations, financialcondition, liquidity, prospects, growth, strategies and the industries in whichthe Group and/or the Enlarged Group operates. By their nature, forward lookingstatements involve risk and uncertainty because they relate to future events andcircumstances. A number of factors could cause actual results and developmentsto differ materially from those expressed or implied by the forward lookingstatements including, without limitation: the Company's ability successfully tocombine the business of the Group and the business of St Hubert and to realiseexpected synergies from that combination, conditions in the markets, marketposition of the Company or its subsidiaries, earnings, financial position, cashflows, return on capital and operating margins, anticipated investments andcapital expenditures, changing business or other market conditions and generaleconomic conditions. These and other factors could adversely affect the outcomeand financial effects of the plans and events described in this announcement.Forward looking statements contained in this announcement based on past trendsor activities should not be taken as a representation that such trends oractivities will continue in the future. Save as required by law or by theListing Rules, the Prospectus Rules or the Disclosure Rules, Dairy Crest doesnot undertake any obligation to update or revise any forward looking statements,whether as a result of new information, future events or otherwise. Unduereliance should not be placed on forward looking statements, which areapplicable only as at the date of this announcement. No statement in this announcement is intended to constitute a profit forecast,nor should any statements be interpreted to mean that earnings or earnings perordinary share will necessarily be greater or lesser than those for the relevantpreceding financial periods for Dairy Crest or Uniq. Rather, these statementsshould be construed as references to potential enhancements to the earnings thatmight otherwise have been earned during the relevant financial period. Appendix I contains further financial information on St Hubert. Appendix II contains the definitions of certain terms used in this announcement. Appendix I Financial information on St Hubert The following table summarises the unaudited consolidated financial informationfor St Hubert for the three years ended 31 March 2006 and for the six monthsended 30 September 2006 which has been compiled from the audited accounts of StHubert SAS and of its subsidiary, Uniq Foods Italia Srl. Profit and loss account • million Year ended 31 March 6 months ended 2004 2005 2006 30 September 2006 Net sales 89.2 92.0 93.5 47.4Operating costs (62.4) (59.3) (65.1) (32.2) -------- -------- --------- ------------ 26.8 32.7 28.4 15.2 Finance income 2.0 2.6 3.2 2.0 -------- -------- --------- ------------Profit before tax 28.8 35.3 31.6 17.2 Taxation (0.9) (6.7) (8.0) (5.9) -------- -------- --------- ------------Profit after tax fromcontinuing operations 27.9 28.6 23.6 11.3 -------- -------- --------- ------------ In the year ended 31 March 2005 the increased profitability reflects the fact that marketing expenditure on the St Hubert brands was well below normal levels. Balance sheet as at • million 31 March 30 September 2004 2005 2006 2006 Property, plant and equipment 7.8 9.4 7.1 6.2Intangible assets 11.4 7.9 5.7 3.5Deferred tax asset 2.2 2.1 2.0 2.0 -------- -------- --------- ------------ 21.4 19.4 14.8 11.7 Current assets 139.9 165.2 192.6 165.2 Current liabilities (35.5) (32.1) (31.0) (25.6) Long term liabilities (0.6) (0.7) (0.7) (0.8) -------- -------- --------- ------------ Shareholders Funds' 125.2 151.8 175.7 150.5 -------- -------- --------- ------------ Between 30 September 2006 and Completion St Hubert will complete a capitalreduction of €133 million and distribute €10 million to Uniq. Appendix II Definitions "Acquisition" the proposed acquisition by Dairy Crest of St Hubert; "Acquisition the sale and purchase agreement to be entered into between,Agreement" amongst others, Dairy Crest and Uniq relating to the Acquisition; "Board" the Board of Directors; "Circular" the circular to be issued by the Company in respect of the Acquisition containing a notice convening the Extraordinary General Meeting; "Citigroup" Citigroup Global Markets Limited; "Completion" completion of the Acquisition in accordance with the terms of the Acquisition Agreement;"Dairy Crest" Dairy Crest Group plc;or "theCompany" "Dairy Crest the Company and its subsidiary undertakings and, where theGroup" or context permits, each of them;"Group" "Directors" the directors of the Company and "Director" means any one of them; "EBITDA" earnings before interest, tax, depreciation and amortisation; "Enlarged the Dairy Crest Group as enlarged by the Acquisition;Group" "Exclusivity the period starting on 8 November 2006 and ending on 19 JanuaryPeriod" 2007; "Extraordinary the extraordinary general meeting of the Company to consider theGeneral Acquisition;Meeting" "Hoare Hoare Govett Limited;Govett" "London Stock London Stock Exchange plc;Exchange" "McQueen" McQueen Limited; "Placing" the placing with institutional investors of 6,250,000 new ordinary shares in Dairy Crest; "Resolutions" the resolution to be proposed at the Extraordinary General Meeting to approve the Acquisition; "Rothschild" N M Rothschild & Sons Limited; "St Hubert" the French and Italian spreads business of Uniq; "Uniq" Uniq plc; and "Workers the consultation by St Hubert with its workers council inConsultation" connection with the Acquisition, required under French law to be carried out before the Acquisition Agreement is entered into. 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