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Johannesburg - Food group AVI [JSE:AVI] will sell 100% of the issued share capital of and AVI's shareholder claims against Denny Mushrooms to Blue Falcon 134 Trading.
Blue Falcon's shareholders include RMB Ventures Six, an indirect subsidiary of FirstRand [JSE:FSR], which holds a 49.9% interest in Denny, and Denny's executive management team.
Denny is the leading producer of fresh, canned and value added mushroom products in SA, with a market share exceeding 50%.
"While Denny is a sound business with the leading national brand in the fresh and canned mushroom categories, the importance of branding in the 'fresh-to-market' produce segment in general and in the fresh mushroom segment in particular has declined over the past several years and this category is no longer strategically aligned to AVI's growth ambitions," the company said on Wednesday.
The effective date of the transaction is July 1 2011.
The transaction is subject to the fulfillment of certain conditions precedent including the unconditional approval of the competition authorities.
This would impact the previously disclosed earnings per share from continuing operations, AVI noted. Headline earnings per share would be revised to 189.4c for the year ended June 2010 from a previously disclosed 198.7c, while earnings per share would be revised to 187.5c from 197.0c before.
The expected percentage increases in earnings per share from continuing operations for the year ended June 2011 remain the same as communicated in AVI's trading update on June 22, it said.
Blue Falcon's shareholders include RMB Ventures Six, an indirect subsidiary of FirstRand [JSE:FSR], which holds a 49.9% interest in Denny, and Denny's executive management team.
Denny is the leading producer of fresh, canned and value added mushroom products in SA, with a market share exceeding 50%.
"While Denny is a sound business with the leading national brand in the fresh and canned mushroom categories, the importance of branding in the 'fresh-to-market' produce segment in general and in the fresh mushroom segment in particular has declined over the past several years and this category is no longer strategically aligned to AVI's growth ambitions," the company said on Wednesday.
The effective date of the transaction is July 1 2011.
The transaction is subject to the fulfillment of certain conditions precedent including the unconditional approval of the competition authorities.
This would impact the previously disclosed earnings per share from continuing operations, AVI noted. Headline earnings per share would be revised to 189.4c for the year ended June 2010 from a previously disclosed 198.7c, while earnings per share would be revised to 187.5c from 197.0c before.
The expected percentage increases in earnings per share from continuing operations for the year ended June 2011 remain the same as communicated in AVI's trading update on June 22, it said.
