Shore Capital acting as Joint Broker to Dairy Crest on the Recommended Cash Offer

 

Shore Capital is pleased to announce that it is acting as Joint Broker to Dairy Crest in the recommended cash acquisition of Dairy Crest Group PLC by Saputo Dairy UK LTD.

The full Regulatory News Service (RNS) announcement is available to view here.

 

Summary

·        Saputo Dairy UK Ltd ("Saputo") and Dairy Crest Group plc ("Dairy Crest") announce that they have reached agreement on the terms of a recommended cash acquisition by which the entire issued and to be issued ordinary share capital of Dairy Crest will be acquired by Saputo.

·        Under the terms of the Acquisition, each Scheme Shareholder will receive 620 pence in cash for each Dairy Crest Share, valuing Dairy Crest's existing issued and to be issued ordinary share capital at approximately £975 million.

·        It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

·        The price of 620 pence in cash for each Scheme Share represents:

·        a premium of approximately 11.7 per cent. to the Closing Price of a Dairy Crest Share of 555 pence on the Latest Practicable Date;

·        a premium of approximately 27.1 per cent. to the 30 day volume weighted average share price of a Dairy Crest Share of 488 pence on the Latest Practicable Date; and

·        a premium of approximately 33.8 per cent. to the 90 day volume weighted average share price of a Dairy Crest Share of 464 pence on the Latest Practicable Date.

·        Saputo has received irrevocable undertakings to vote, or procure the vote, in favour of the Scheme at the Court Meeting and the resolution(s) to be proposed at the General Meeting (or, in the event that the Acquisition is to be effected by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer) from all the Dairy Crest Directors who hold Dairy Crest Shares in respect of 85,062 Dairy Crest Shares, in aggregate, representing all of the Dairy Crest Shares held by the Dairy Crest Directors and representing approximately 0.055 per cent. of the issued ordinary share capital of Dairy Crest at the close of business on the Latest Practicable Date.

·        The Dairy Crest Directors, who have been so advised by Greenhill & Co. International LLP ("Greenhill") as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Greenhill has taken into account the commercial assessments of the Dairy Crest Directors. Greenhill is providing independent financial advice to the Dairy Crest Directors for the purposes of Rule 3 of the City Code.

·        Accordingly, the Dairy Crest Directors intend unanimously to recommend Dairy Crest Shareholders to vote, or procure the vote, in favour of the Scheme at the Court Meeting and the resolution(s) to be proposed at the General Meeting as the Dairy Crest Directors who hold Dairy Crest Shares have irrevocably undertaken to do in respect of all of their Dairy Crest Shares (amounting to 85,062 Dairy Crest Shares, in aggregate, and representing approximately 0.055 per cent. of the issued ordinary share capital of Dairy Crest at the close of business on the Latest Practicable Date).

·        It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the Forms of Proxy, will be posted to Dairy Crest Shareholders and (for information only) to Dairy Crest Share Scheme Participants on or around 8 March 2019 and that the Scheme will become Effective in the second quarter of the calendar year 2019, subject to the satisfaction or, where applicable, waiver of the Conditions and certain further terms set out in Appendix 1 to this announcement.

 

Commenting on the Acquisition, Lino A. Saputo, Jr., Chairman and CEO of Saputo Inc., said:

"Dairy Crest is an attractive platform for Saputo and fits well within our growth strategy. We believe that under Saputo ownership, Dairy Crest will be able to accelerate its long-term growth and business development potential and provide benefits to Dairy Crest's employees and stakeholders. This recommended offer represents a compelling opportunity for Dairy Crest Shareholders, providing immediate value certainty."

 

Commenting on the Acquisition, Stephen Alexander, Chairman of Dairy Crest, said:

"The board is unanimously recommending this all-cash offer by Saputo to buy Dairy Crest at an attractive premium, which represents compelling value for Dairy Crest Shareholders. Dairy Crest is a leading UK dairy company and the proud manufacturer of Cathedral City, the largest UK cheese brand. Saputo is one of the top ten dairy processors in the world. Both companies have built strong positions in the cheese sectors in their respective home markets.

"The Acquisition should enable Dairy Crest to benefit from Saputo's global expertise and strong financial position to fulfil and accelerate its growth ambitions. The businesses have strong shared values and the board is confident that Saputo's plans to invest in and grow the Dairy Crest business mean the proposed transaction is positive for all its stakeholders.

"The price premium Saputo is offering reflects Dairy Crest's portfolio of market-leading brands, its manufacturing and innovation capabilities as well as its experienced management team, who will continue to run the business under Saputo's ownership. It is for these reasons that the board is unanimously recommending this transaction to Dairy Crest Shareholders."

 

For information please contact:

Shore Capital  +44 (0) 20 7408 4090

Malachy McEntyre / Mark PercyTony Gibbs