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Offer for Restaurant Brands NZ Limited (NZSE: RBD)

14 June 2005
Offer for Restaurant Brands New Zealand Limited (NZSE: RBD)

NZ Restaurant Holdings Limited (NZRH) announced today that it intends to make a full takeover offer for all of the voting and other equity securities in Restaurant Brands New Zealand Limited (Restaurant Brands). NZRH today submitted a proposal to the Board of Restaurant Brands detailing its takeover offer.

NZRH is a newly established company which has been formed for the purpose of making the offer. It was established by CVC Asia Pacific Limited (CVC), an investment and advisory group focused on taking controlling positions in medium- to large- sized companies with a view to generating long-term capital appreciation.

Restaurant Brands New Zealand Limited operates the New Zealand outlets of KFC, Pizza Hut and Starbucks Coffee. It currently operates 227 outlets in New Zealand (101 Pizza Hut, 87 KFC and 39 Starbucks Coffee) and 51 Pizza Hut outlets in Australia, all in Victoria. It was formed in 1997 to acquire the New Zealand restaurant and takeaway operations of KFC and Pizza Hut. The decision to float the company was made by the owners at the time – PepsiCo Inc (now Yum! Restaurants International).

NZRH is offering NZ$1.65 cash per Restaurant Brands ordinary share. The offer price gives Restaurant Brands an equity capitalization of approximately NZ$160 million. The offer price represents a 29% premium to the last close of NZ$1.28 (Monday, June 13, 2005) and a 26% premium to both the 3 months and 6 month volume weighted average price respectively.

CVC has been in discussion with the board and senior management of Restaurant Brands over the last 3 months and Restaurant Brands has made information and management available for CVC to undertake a thorough due diligence.

CVC Managing Director, Adrian MacKenzie, said “Restaurant Brands has long been viewed as a mature company with stable earnings and cash flows, however current constraints have limited the company’s ability for capital investment to drive earnings growth.

We believe NZRH is offering a very attractive proposal to the shareholders of Restaurant Brands given the substantial premium offered to the current share price.

We intend to fully support the current management team to pursue its strategic goals including an extensive capital expenditure program to refurbish its portfolio to enhance its delivery of appealing modern brands. We are excited to be part of Restaurant Brands future.”

CVC Capital Partners has a similar investment in Spain, through its ownership of Grupo Zena, the leading Spanish multibrand food chain which currently has 400 outlets. It currently operates both restaurants and cafés (Foster’s Hollywood, California, Nostrum and Actor’s) under owned brands and fast food units as a franchise of Burger King, KFC and Pizza Hut.

The offer is subject to a number of conditions standard in transactions of this nature, and in addition NZRH will want to be satisfied with ongoing arrangements with the franchisors who are counterparties to key contracts with the group, and with ongoing arrangements for key senior staff, prior to making the offer.

The equity funding will be provided by funds advised by CVC. Bank finance for NZRH will be provided by Rabobank.

Ernst & Young Corporate Finance are acting as financial advisor to CVC Asia Pacific and NZRH.


Background on CVC Asia Pacific Limited

CVC Asia Pacific Limited is an investment and advisory company formed in 1999 to focus on buy-out opportunities in the Asia Pacific Region. CVC Asia Pacific currently advises on a US$2.725 billion investment program and has established a leading position in the Asia Pacific buy-out market. CVC has an integrated network of offices throughout this region in Hong Kong, Seoul, Sydney and Tokyo with 22 investment professionals. CVC Asia Pacific is a joint venture between CVC Capital Partners and Citigroup, one of the world’s largest financial institutions.

During this period, CVC Asia Pacific has acquired 17 companies in the Asia Pacific Region for a total consideration of more than US$4.3 billion.

In Australia, CVC has supported a number of local management teams with investments in Amatek (A$960 million), Pacific Brands (A$730 million), Tech Pacific (A$345 million), and Affinity Health (A$845 million).

Background on CVC Capital Partners

CVC Capital Partners is a leading privately owned investment and advisory company which has raised over US$18 billion (€16.8 billion) in Europe and Asia.

Founded in 1981 as Citicorp’s European private equity arm, in 1993 CVC completed its own management buy-out and is independently owned by its management.

Since 1981, CVC has acquired over 220 companies in Europe for a total consideration of more than US$ 61.9 billion. CVC’s current European portfolio of 37 companies has a combined transaction size of over $36 billion, with a combined turnover of $32.2 billion operating throughout Europe and employing over 224,000 people.

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