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Cedenco Foods Shareholders Can Object To Sk Foods

26 September 2003

Cedenco Foods Shareholders Can Object To Sk Foods’
Compulsory Acquisition Price

SK Foods International recently made a takeover offer for Cedenco Foods Limited. That offer closed on 15 September 2003.

On 10 September 2003 SK Foods sent a notice stating that it had reached the 90% level of control of Cedenco and was thus its dominant owner.

On 11 September 2003 SK Foods sent an acquisition notice to all shareholders who had not accepted its offer advising that it intended to compulsorily acquire their shares. The acquisition notice stated that $2.30 per share would be paid by SK Foods, that being the amount of its offer, and that shareholders had no rights under the Takeovers Code to object to that amount.

The statement in SK Foods’ acquisition notice that shareholders had no right to object to the price of $2.30 per share was incorrect.

When the acquisition notice was issued, and at the time the offer closed, while SK Foods had reached the 90% level of control it did not have the level of acceptances of its offer needed to compulsorily acquire remaining Cedenco shares at $2.30 per share without outstanding shareholders having the right to object to that price.

The Panel accepts that SK Foods was mistaken, and had acted in good faith when issuing its acquisition notice.

Accordingly the Panel has invited, and SK Foods has accepted, an invitation to apply for an exemption that
- restores the right of outstanding shareholders to object to the price being paid by SK Foods; and
- extends that right to all Cedenco shareholders who accepted the offer in the period from Friday 12 September, the day after the acquisition notice was despatched, to Monday 15 September 2003, the day the offer closed.

If shareholders holding a total of 127,473 shares object within 14 days to the price of $2.30, the matter will be referred to an expert appointed by the Takeovers Panel to determine a fair and reasonable value.

If the expert determines that the amount of $2.30 was too low, all shareholders who accepted SK Foods’ offer from 12 to 15 September and who objected to the amount of $2.30 per share, together with all outstanding shareholders when the offer closed, would get the higher price.

If the expert determines that the fair and reasonable value should be less than $2.30 per share then SK Foods would be entitled to require those same shareholders to return the difference between $2.30 per share and the lower amount set by the expert.

SK Foods will send notices to all affected shareholders explaining their rights to object to the amount of $2.30 per share and outlining the consequences of an expert determination.

The Panel’s exemption notice will be published in the next few days.
The granting of this exemption will not affect other aspects of the compulsory acquisition procedure.
… ends

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