Mengniu wholly acquired Bellamy and spent HK $7.86 billion to buy Bella
Before the morning opening on September 16, China Mengniu Dairy Co., Ltd. (hereinafter referred to as' Mengniu Dairy ', 02319. HK) announced on the Hong Kong stock exchange that the company proposed to acquire Bellamy & rsquo; s at a planned consideration of a $12.65 per planned share (approximately equivalent to HK $68.15); The total share capital of s Australia Limited (hereinafter referred to as' Bellamy ') has a total consideration of no more than a $1.46 billion (approximately equivalent to HK $7.86 billion).
Bellamy is a world-famous manufacturer of Australian organic infant formula and infant food. Its shares are listed on the Australian Stock Exchange. The company was founded in Tasmania, Australia. It is a world-famous Australian organic brand and has businesses in Australia, New Zealand, China and Southeast Asia. The target company provides certified organic products made in Australia with non GM ingredients and vitamins and minerals suitable for infants and young children.
After the announcement, Bellamy rose more than 50% on the Australian Stock Exchange, up 55.4% to a $12.93 at 10:35 local time.
Bellamy share price performance
Mengniu Dairy said that on September 15, 2019, the company and Bellamy entered into the plan implementation deed. Under the plan implementation deed, the company proposes to acquire all plan shares for a plan consideration of $12.65 (approximately equivalent to HK $68.15) per plan share. The board of directors of the target company intends to recommend the proposed acquisition transaction to the shareholders of the target company and implement the plan.
As of the date of publication of the announcement, Bellamy had 110 million issued shares and 5.2319 million options granted but not yet exercised. According to the plan implementation deed, all outstanding Bellamy options will be vested and exercised, vested and settled in accordance with the terms of Bellamy options on the plan record date, or cancelled in accordance with the provisions of the plan implementation deed.
Mengniu Dairy now holds 324848200 Bellamy shares, accounting for about 2.9% of Bellamy's issued share capital. Mengniu Dairy is required to pay a total price of not more than a $1.46 billion (approximately HK $7.86 billion) for the shares it plans to acquire. The company expects to fund the proposed acquisition transaction with internal funds combined with bank financing.
In addition, subject to the effectiveness of the plan, Bellamy is allowed to pay a special dividend of $0.60 per plan share under the plan implementation deed.
According to Bellamy's audited consolidated accounts published on June 30, 2019, the company's net assets are about $232.3 million. Bellamy's audited net profit (before and after tax) as of June 30, 2018 was $61.2 million and $42.8 million respectively, while Bellamy's audited net profit (before and after tax) as of June 30, 2019 was $31.4 million and $21.7 million respectively. When the proposed acquisition transaction becomes unqualified, Bellamy will become an indirect wholly-owned subsidiary of Mengniu Dairy at the closing, and its performance, assets and liabilities will be comprehensively recorded in the accounts of Mengniu Group.
As for the reasons for acquiring Bellamy, Mengniu Dairy pointed out in its announcement that the organic infant formula and infant food market brought the group a very attractive opportunity for growth and profit margin improvement; The proposed acquisition transaction is consistent with the group's strategy and helps the group grasp the huge development potential of organic infant formula and infant food in China and Southeast Asia; The Group believes that its unique advantages will help to release the brand potential of the target company, especially in overseas markets such as China and Southeast Asia; One of the group's main growth strategies is to achieve breakthrough growth in the high-end infant formula sector.
In addition, Mengniu Dairy also said in the announcement that Bellamy has a series of comprehensive high-quality and ultra-high-quality organic infant formula and infant food products, with a higher profit margin than the group's existing business segments. The Group believes that its unique advantages will help to release the brand potential of the target company, especially in overseas markets such as China and Southeast Asia.