[Caihua Social News] China Mengniu Dairy (02319-HK) announced that on September 15, 2019, the company entered into a "Plan implementation Deed" with Bellamy's Australia Limited (hereinafter referred to as Bellamy's). Bellamy's is a world-renowned manufacturer of organic infant formula and baby food in Australia. Its shares are listed on the Australian Stock Exchange (Australian Stock Exchange symbol: BAL). Under the Plan implementation Deed, the company proposes to acquire all plan shares at a plan consideration of A $12.65 (equivalent to about HK $68.15) per plan share.
The board of directors of Bellamy's intends to recommend the proposed acquisition by Bellamy's shareholders (excluding excluded shareholders) and implement the plan.
As at the date of this announcement, there are a total of 110119815 issued Bellamy's shares (excluding excluded shares) and 5231993 Bellamy's share options granted but not yet exercised. According to the Plan implementation Deed, all outstanding Bellamy's options will be vested and exercised, vested and settled in accordance with the terms of the Bellamy's options on the Plan record date, or cancelled in accordance with the provisions of the Plan implementation Deed. The total consideration payable by the company for the scheme shares does not exceed A $1.46 billion (equivalent to approximately HK $7.86 billion). The company is expected to fund the proposed acquisition in the form of internal funds combined with bank financing. In addition, subject to the entry into force of the plan, Bellamy's was allowed to pay a special dividend of A $0.60 per Plan share under the Plan implementation Deed.
China Mengniu Dairy now holds 3248482 shares in Bellamy's, accounting for about 2.9 per cent of Bellamy's 's issued share capital.
According to the audited consolidated accounts published by Bellamy's on June 30, 2019, Bellamy's has a net worth of approximately A $232.3 million. Bellamy's 's audited net profit (before and after tax) for the year ended June 30, 2018 was A $61.2 million and A $42.8 million, respectively, while Bellamy's 's audited net profit (before and after tax) for the year ended June 30, 2019 was A $31.4 million and A $21.7 million, respectively. When the proposed acquisition becomes unqualified, Bellamy's will become an indirect wholly-owned subsidiary of the company at the time of delivery and its results and assets and liabilities will be consolidated in the group's accounts.
The company pointed out that the reason for the acquisition is that the organic infant formula and baby food market brings extremely attractive growth and profit margin opportunities for the group; the proposed acquisition is in line with the group's strategy and will help the group grasp the great development potential of organic infant formula and baby food in China and Southeast Asia. The group believes that its unique advantages will help unleash the brand potential of the target companies, especially in overseas markets such as China and Southeast Asia.