Dairy Crest Regulatory News (DCG)

9 Nov 2006 07:02

Uniq PLC09 November 2006 Uniq PLC 9 November 2006 Uniq PLC ("Uniq") Proposed Disposal of French spreads business for EUR370 million Uniq, the European convenience foods group, announces the Proposed Disposal ofits French spreads business, St Hubert SAS ("St Hubert"), for a totalconsideration of EUR370 million (£248 million). HIGHLIGHTS * Binding offer received from Dairy Crest Group plc ("Dairy Crest") for the acquisition of 100 per cent of St Hubert * Total consideration of EUR370 million (£248 million) in cash represents a multiple of 11.1x EBITDA of EUR33.3 million (£22.8 million) for the year ended 31 March 2006 * Proceeds to be used to reduce substantially existing debt and address the UK pension deficit * French Works Council consultation process required * Conditional on shareholder approvals of both parties * Targeted completion in January 2007 Commenting on the Proposed Disposal, Geoff Eaton, Chief Executive of Uniq, said: "This proposed £248 million sale is an integral part of our plan to unlockUniq's true potential. Our recovery in the remaining £760 million of ourrevenue stream is gathering momentum and will be further supported by a strongbalance sheet." "In France, we are in consultation to address the competitiveness of our Marieconvenience business and the previously announced relaunch of our frozenbusiness is showing early promise." This summary should be read in conjunction with the full text of the followingannouncement. Uniq's interim results for the six months ended 30 September 2006 will beannounced on 21 November 2006. For further information UNIQ PLC Geoff Eaton +44 (0) 1753 267 011Martin Beer +44 (0) 1753 267 011 LAZARD Peter Kiernan +44 (0) 20 7187 2920Virginie Morgon +33 1 44 13 07 60 GAINSBOROUGH Julian Walker +44 (0) 20 7190 1705 Lazard and Co., Limited, which is authorised and regulated in the United Kingdomby the Financial Services Authority, is acting as financial adviser to Uniq inconnection with the Proposed Disposal and will not be responsible to any personother than Uniq for providing the protections afforded to customers of Lazard &Co., Limited, or for advising any such person on the contents of thisannouncement or any other transaction, arrangement or matter referred to herein. Uniq PLC 9 November 2006 PROPOSED DISPOSAL OF FRENCH SPREADS BUSINESS 1. INTRODUCTION Uniq announces that it has received a binding offer from Dairy Crest regarding the proposed acquisition of the entire issued share capital of St Hubert, Uniq's French spreads business, for a total consideration of EUR370 million (£248 million) in cash. Any decision by Uniq to proceed with a transaction is subject to French Works Council consultation. In addition, due to its size, the approval of Uniq's shareholders and of Dairy Crest's shareholders would also be required. Following satisfactory completion of the French Works Council consultation process, Uniq would then enter into a sale and purchase agreement and dispatch a Shareholder Circular containing a notice of an Extraordinary General Meeting to its shareholders. Uniq believes a transaction could be completed in January 2007. Uniq and Dairy Crest have entered into an exclusivity agreement until 19 January 2007. 2. BACKGROUND TO AND REASONS FOR THE PROPOSED DISPOSAL On 6 June 2006, Uniq announced that it would focus on a smaller number of convenience food businesses with the greatest potential for significant profit growth and shareholder value creation. As a consequence of this decision, Uniq stated that it would explore the sale of St Hubert and its Belgian salads business. The proceeds from the Proposed Disposal would be used to reduce substantially the Group's borrowings, address the IAS19 deficit on the UK pension fund and support the Group's growth plans. As a consequence of this deleveraging of the Group's balance sheet and the recent strengthening of Uniq's management teams in each of its continuing businesses, the Board believes there is significant opportunity for creating greater value from the more focused business. The growth will be driven by the recovery plans already underway in the UK and Northern Europe. 3. FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL The net cash proceeds arising from the completion of the Proposed Disposal are expected to be approximately EUR340 million (£228 million). These net proceeds are stated after deduction of estimated tax and transaction expenses of approximately EUR30 million (£20 million). Uniq has agreed that part of any net proceeds will be used to repay the debt drawn down from Uniq's committed bank facility. As at 30 September 2006, Uniq's gross debt was £123.6 million offset by £10.3 million of cash and short-term deposits. In addition Uniq has agreed to pay a sum of money, equal to the gross IAS19 deficit on the UK pension fund at the time of the receipt of the net proceeds, into a ring-fenced account secured for the benefit of the UK pension fund. At 30 September 2006, the gross IAS19 deficit on the UK pension fund was £85.2 million. 4. INFORMATION ON ST HUBERT St Hubert is a leading French producer of standard, low fat and innovative "health" spreads. In the overall French spreads market St Hubert is the second largest participant, with a market share of approximately 31% by value as of September 2006. In the "health" spreads segment, St Hubert is joint leader. St Hubert owns two of the leading spreads brands in the French market: "St Hubert" and "Le Fleurier". Since the introduction of the "St Hubert 41" low fat spread in 1981, St Hubert has been positioned as a specialist producer of "health" spreads and has launched products such as "St Hubert Omega 3" and "St Hubert Cholegram". St Hubert operates a fully integrated sales, marketing, production and distribution system in France. St Hubert's spreads are sold in substantially all French supermarkets and hypermarkets. Through its subsidiary, Uniq Foods Italy, St Hubert also sells spreads and ready made quiches, tarts and dough products in Italy. St Hubert owns "Valle", the leading brand in the Italian spreads market. St Hubert is headquartered in Rungis, a suburb of Paris, and has a dedicated manufacturing facility in Ludres, a suburb of Nancy. St Hubert employs 178 people. For the year ended 31 March 2006, St Hubert generated EBITDA of EUR33.3 million (£22.8 million) and EBIT of EUR30.4 million (£20.8 million). The net and gross assets of St Hubert at 31 March 2006 under IFRS were EUR5.3 million (£3.7 million) and EUR36.2 million (£25.3 million) respectively. 5. UNIQ'S REMAINING BUSINESS IN FRANCE Following the Proposed Disposal, Uniq's remaining French convenience business will be focused around the Marie brand. The brand offers both chilled and frozen meals and is well recognised within the food market in France for its quality and innovation. The business has been successfully separated from St Hubert and is now being relaunched under the entrepreneurial leadership of Paolo Schirrati. A new strategic plan has been adopted to revitalise the brand, devolve and increase the pace of decision making and to address competitiveness. On 10 October 2006, Uniq commenced discussions with the French Works Council about a restructuring plan to achieve this. DEFINITIONS "Group" Uniq and its subsidiary undertakings as at the date of this announcement "Proposed Disposal" the proposed transaction described in section 1 of this announcement "UK pension fund" the pension scheme known as the Uniq PLC Pension Scheme constituted by deed which commenced 1 April 1978, as amended from time to time This information is provided by RNS The company news service from the London Stock Exchange