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Seeka Eleos Amalgamation to Proceed

Thu, 2 Dec 2004

Seeka Eleos Amalgamation to Proceed

The Board of Seeka Kiwifruit Industries Limited announces Eleos shareholder approval for the amalgamation of Eleos Limited with a wholly owned Seeka subsidiary.

The proposal was endorsed unanimously by Eleos shareholders attending a special meeting held 1 December. Under the terms of the offer the shareholders have five working days to elect to receive cash or a combination of cash and Seeka shares in consideration of the amalgamation proceeding.

Eleos directors declared a dividend of 8 cents per Eleos share and declared a supplementary dividend of 34 cents per Eleos share that will be funded from Seeka ‑ both dividends fully imputed. The dividends will be paid to Eleos shareholders on 20 December 2004, timed to coincide with the Seeka consideration payments and trading of Seeka shares issued under the amalgamation.

The dividends and consideration brings total value to $3.10 per Eleos share.

Eleos chief executive Les Anstis says the Eleos Board and company selected Seeka as the preferred bidder and had recommended the transaction to shareholders.

“The Eleos Board is delighted with the transaction and believes that the amalgamation will create the opportunity for significant growth prospects for growers and shareholder,” says Anstis.

The amalgamation was completed despite a late competitive bid that had been announced 26 November.

Seeka managing director Tony de Farias says the Eleos amalgamation was an important step in Seeka’s growth strategy.

”The Combined group will have over 17% of the industry’s crop. This growth in volume allows significant economies of scale and rationalisation to occur.

I compliment the Eleos Board on the process that they had undertaken. It was clear, concise and has delivered value to their shareholders,” says de Farias.

Seeka and OPAC in investment talks

Seeka Kiwifruit Industries and Opotiki Packing and Coolstorage Limited (OPAC) advise that the two Companies have agreed to enter into an agreement which will see Seeka taking a 20% cornerstone shareholding in OPAC.

OPAC and Seeka have had a long standing relationship with OPAC being the second largest shareholder in Seeka. In the arrangements under discussion, OPAC would distribute its Seeka shareholding to OPAC shareholders.

The combined group is expected to offer significant benefits to shareholders and growers of both companies. The announcement follows Seeka’s successful move to amalgamate with Eleos Limited, and if Seeka’s cornerstone shareholding in OPAC proceeds, the combined group will handle over 25% of New Zealand’s kiwifruit volume.

OPAC chief executive Craig Thompson says the time is right for OPAC to join a bigger group.

”There are significant efficiency gains available to OPAC shareholders and growers through the Seeka investment. These include the ability to leverage better commercial terms in all dealings, supply alliances, rationalization of supply chain costs, and access to post harvest and corporate support functions,” says Thompson.

Seeka managing director Tony de Farias says the potential investment made a lot of commercial sense.

“OPAC has good assets, good management and operates in a geographical area away from Seeka’s traditional operational base. Seeka’s considerable resources and support will enable OPAC to reinforce its position as the pre-eminent kiwifruit post harvest business in the Eastern BOP and Gisborne regions.

“OPAC is a successful and dynamic business and will naturally exploit the advantages that this commercial alliance will bring.

“OPAC’s offshore investments, particularly its Italian gold kiwifruit orchards, are significant assets that will generate new future cashflows. OPAC’s strong commercial relationships with the Salvi Company in Italy, and Venida in California, which have developed around their offshore Gold plantings, will be strategically important in developing and implementing future in-market packing alliances,” says de Farias.

A new Supply Entity will be formed to consolidate the commercial supply arrangements for the combined group incorporating Eleos, OPAC and Seeka. Integrated Fruit Supply and Logistics Limited (IFSL) will initially supply over 25% of the New Zealand kiwifruit crop and will immediately seek to enter into an enduring partnership arrangement with marketer Zespri Group Limited. The main aim of the new arrangement will be to assist Zespri to achieve supply chain cost savings for growers through improved integration between the orchard, manufacturing and marketing functions. Supply volumes under this arrangement are expected to grow further by harvest 2005.

ENDS

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