Metcash Limited · ASX:MTS
Metcash — Merger or Acquisition (December 2004)
18 slides from Metcash's merger presentation, Dec 6, 2004
Slide 1: Champion of the Independent Retailer: Investor Presentation
+ Champion of the Independent Retailer Investor Presentation 6 December 2004 + Important Notice This presentation for Metcash Trading Limited (Metcash) is designed to provide a high level overview of the takeover offer by Metcash for Foodland Associated Limited (Foodl and) and the corporate ownershi
Slide 2: Agenda
+ Agenda 1. The Transaction 2. The Foodland Offer 3. Capital Reorganisation 4. The New Metcash 5. Funding the Transaction 6. Timetable 7. Concluding Remarks 3 + The Transaction Section 1 4 2
Slide 3: The Transaction creates significant value
+ The Transaction 1. Off-market takeover Offer for Foodland 2. Exit of Metcash’s major shareholder, Metoz, via a Capital Reorganisation 5 + The transaction will create significant value Revenue (2004 proforma) EPS Accretion (2006E) (2)(3) 10 25% 25% 9.0 9 6% 20% 20% 8 14% 7.2 15% A$bn 7 10% 6 5% 5 0
Slide 4: Equity Placement today
+ Equity Placement today § Equity Placement of approximately $250m(1) currently underway – 1 day bookbuild § Purpose of Equity Placement is to fund Foodland Offer § Placement represents approximately 15% of issued capital § Share Purchase Plan (“SPP”) to follow for Retail investors (1) Assumed equit
Slide 5: The Foodland Offer and rationale
+ The Foodland Offer § Offer for 100% of Foodland – Price attributed to Foodland Australian business Foodland (wholesale plus retail) of A$846m Offer – Foodland shareholders to retain ownership of Foodland New Zealand business with intention to list new entity on ASX § 2.44(1) Metcash shares or A$7.
Slide 6: Benefits of the Foodland Offer
+ Benefits of the Foodland Offer Value Creation ü 14% EPS(1) accretion for Metcash in first full year (2006E) ü Complementary acquisition in core business Scale and Growth ü Increases business scale and expands wholesale network ü Expand and strengthen Independents ü Improved buying power Synergies
Slide 7: Creating a national network
+ Creating a national network The New Metcash Stores QLD NSW VIC SA WA Total SUPA IGA(1) 88 30 110 104 98 430 IGA(1) 163 247 283 148 115 956 Foodworks (2) 446 40 201 - 6 693 Other non banner 2,699 customers (3) Total 4,778 (1) Includes Foodland’s Action stores, Dewsons and Supa Valu (2) Non IGA, Foo
Slide 8: Foodland Offer premium
+ Foodland Offer premium(1) 25 Value per FOA share (A$) 20 Foodland Australia 7.18 5.18 39% premium 15 10 Retained by 14.03 14.03 Foodland 5 shareholders 0 FOA 1 month VWAP MTT offer New Zealand Australia (1) See Appendix for calculation 15 + A substantial premium for an underperforming Australian a
Slide 9: Foodland Offer conditions and structure
+ Foodland Offer conditions(1) § Minimum 90% acceptance § Regulatory approvals § Metcash shareholder approvals § Foodland Offer is not conditional on Capital Reorganisation § Other conditions in Announcement (1) Full details in Bidder’s Statement 17 + Foodland Offer Before After Existing Metcash Tra
Slide 10: Capital Reorganisation
+ Capital Reorganisation Section 3 19 + Capital Reorganisation Transaction § Acquisition of Metoz’s 385m shares in Metcash § A$2.92(1) cash per Metcash share representing Consideration a 0.7% discount to closing share price of A$2.94 as at 3 December 2004 § Schemes of Arrangement Implementation – On
Slide 11: Benefits and conditions of Capital Reorganisation
+ Benefits of Capital Reorganisation § Enhanced value for shareholders Value – 6% EPS accretive in first full year (2006E) (1) Creation § All shareholders able to participate § Significantly improves liquidity Scale and § Removes implications of overhang and creates a stable Liquidity shareholder ba
Slide 12: Capital Reorganisation structure
+ Capital Reorganisation Before After Existing Metcash Metoz Holding Other Metcash New shareholders shareholders Limited shareholders excluding Metoz 60% 40% Metcash Trading Metcash Trading Limited Limited 23 + The New Metcash Section 4 24 12
Slide 13: The New Metcash
+ The New Metcash Before After Existing Metcash Metoz Holdings Other Metcash New shareholders shareholders Limited shareholders excluding Metoz Metcash Trading Metcash Trading Limited Limited Existing Metcash Existing Metcash Foodland businesses businesses Australia 25 + Funding the Transaction Sect
Slide 14: Funding the Transaction and summary effects
+ Funding the Transaction Total funds 2,060 2,060 Hybrid 390 Instrument Foodland Offer 846 860 Debt(3) Capital (1) Reorganisation 1,125 Equity 810 - Placement 250m - Rights Issue 560m (2) (A$m) 89 Uses Sources (1) Acquisition of Metoz at A$2.92 per Metcash share (including assumption of Metoz subsid
Slide 15: Indicative Transaction Timetable
+ Timetable Section 6 29 + Indicative Transaction Timetable Announcement 6 December 2004 Notice of Meeting / Explanatory Memorandum to Pre Christmas 2004 Metcash shareholders Shareholder meetings for Metoz and Metcash Late January 2005 Circular despatched to Metoz and Metcash shareholders Mid Februa
Slide 16: Indicative Placement Timetable
+ Indicative Placement Timetable (Sydney time) § Announcement 6 December § Institutional placement 6 December – Books open 10am – Domestic books close 4pm – Allocations confirmed Overnight § Allotment T+3 § SPP Mid December Deutsche Bank is the sole bookrunner and underwriter 31 + Concluding Remarks
Slide 17: A transforming transaction
+ A transforming transaction ü Creates substantial shareholder value ü Significantly increases business scale and expands network ü Strengthens ability to compete ü Greater depth and liquidity of equity base 33 + Premium calculation Appendix 34 17
Slide 18: Premium calculation
+ Premium to implied Foodland Australia value A$m Equity Value (unless stated otherwise) per share (A$) Foodland share price 19.21 per share 19.21 (1 month VWAP to 3 Dec 04) Shares outstanding in Foodland 117.8m - Foodland equity value 2,263 - Plus: net debt 2004 230(1) - Foodland Enterprise Value 2