FIRST PACIFIC<0142> - Announcement
The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this announcement, makes no representation as to its accuracy
or completeness and expressly disclaims any liability whatsoever for any
loss howsoever arising from or in reliance upon the whole or any part of
the contents of this announcement.
This announcement appears for information purposes only and does not
constitute an invitation or offer to acquire, purchase or subscribe any
securities.
FIRST PACIFIC COMPANY LIMITED
(Incorporated in Bermuda with limited liability)
DISCLOSEABLE AND CONNECTED TRANSACTION
SHARE TRANSACTION
Joint Venture with Nissin Food Products Co. Ltd. of Japan
to acquire a controlling interest in P.T. Indofood Sukses Makmur Tbk
The proposed acquisition by First Pacific and Nissin Food of a combined 60
per cent interest in Indofood will not now proceed in the form previously
announced. However, subject to obtaining further approval from its
independent public shareholders and satisfactorily resolving issues
relating to outstanding third party consents, First Pacific intends to
pursue its objective of acquiring a 30 per cent interest in Indofood on
similar commercial terms as previously agreed.
First Pacific refers to its previous announcement dated 10th April 1999
regarding the conditional agreement (the "Stock Purchase Agreement") among
First Pacific, Nissin Food and the Salim Investors for the acquisition by
First Pacific and Nissin Food of a 60 per cent interest in Indofood for an
aggregate consideration of US$570 million (HK$4.4 billion). In that
announcement it was indicated that there remained several unfulfilled
closing conditions and other unresolved matters in connection with the
closing.
First Pacific now announces the termination of the Stock Purchase
Agreement in the form previously announced, whereby Nissin Food and First
Pacific were each to acquire an attributable 30 per cent interest in
Indofood giving a combined 60 per cent holding. The termination of the
previously announced transaction is principally a result of the parties'
inability to obtain, in a timely manner and to the satisfaction of all the
parties to the Stock Purchase Agreement, all necessary third party
consents and approvals required to fulfil the conditions precedent to
closing under the Stock Purchase Agreement. This included the parties'
inability to secure consents and waivers from Indofood's creditor banks.
Having regard to the difficulties experienced by the parties in obtaining
such consents and approvals in a timely manner to the satisfaction of all
the parties to the Stock Purchase Agreement, the parties have concluded
that it is in their best interests not to proceed with the acquisition as
previously announced. Accordingly, the transaction previously announced
which included the acquisition by Nissin Food of an attributable 30 per
cent stake in Indofood will not now proceed.
Both Nissin Food and First Pacific are disappointed that the parties to
the Stock Purchase Agreement were unable to obtain such third party
consents and approvals to their mutual satisfaction and to successfully
resolve all other issues required in relation to the proposed acquisition
to facilitate a closing of both the proposed purchase by Nissin Food and
the proposed purchase by First Pacific of their respective 30 per cent
attributable interests in Indofood.
The board of directors of First Pacific continues to be of the opinion
that Indofood represents an attractive long term investment opportunity
for First Pacific, consistent with First Pacific's stated objective of
focusing on a select number of leading companies in Asia. Moreover,
Indofood continues to perform strongly despite the regional economic
crisis and has maintained volumes in its principal products, which are
staple foods. The board of directors of First Pacific continues to
believe that Indofood has considerable growth potential both domestically
and regionally. Accordingly, First Pacific intends to pursue its
objective of acquiring the original 30 per cent stake it had sought in
Indofood and to continue to seek third party consents or to waive such
requirements where determined by First Pacific to be commercially
immaterial. It is intended that this transaction would be priced
similarly to the original transaction proposed on 16th December 1998,
which valued Indofood at US$950 million, compared with its market
capitalisation of US$1,253 million based on yesterday's closing price of
Indofood's shares on the Jakarta Stock Exchange.
It is contemplated by First Pacific that such a transaction would proceed,
subject to further approval of those shareholders of First Pacific other
than the Salim Investors, on the basis of the same documentation which was
agreed for the previously announced transaction (to the extent that it
relates to First Pacific's purchase of a 30 per cent stake in Indofood)
and on the same detailed terms of that documentation. It is also
contemplated that the conditions precedent to closing such a transaction
would be similar to those in respect of the previously announced
transaction, although First Pacific may be prepared to waive those
conditions which it determines to be commercially immaterial.
In addition, in view of the changed circumstances, First Pacific remains
keen to proceed with an incremental investment in Indofood on similar
commercial terms and would seek, subject to any applicable contractual and
regulatory constraints, to explore opportunities to do so. This may
include a transaction involving Nissin Food, although there is no specific
transaction currently being discussed.
Any transaction involving the Salim Investors or Indofood which materially
differs from the overall arrangements contemplated by the previously
announced transaction would be a connected transaction for First Pacific
under the Listing Rules (even if such transaction were on similar
commercial terms and based on previously approved documentation) requiring
further presentation to, and approval in general meeting by, those
shareholders of First Pacific other than the Salim Investors. Any such
transaction would also require the appointment, or the re-appointment, of
an independent financial advisor to provide an opinion as to whether the
terms of any such transaction are fair and reasonable so far as those
shareholders of First Pacific other than the Salim Investors are
concerned.
As soon as First Pacific has clarified the basis of an investment
structure on which it would be willing to proceed, an announcement will be
made and the proposal promptly submitted to First Pacific's shareholders
for approval. Any such investment structure, to be acceptable to First
Pacific, would be expected to have similar commercial terms (so far as
First Pacific is concerned) as the transaction previously approved by
First Pacific's shareholders.
Definitions
In this Announcement, the following terms and expressions have the
following meanings:-
"First Pacific" First Pacific Company Limited, a company
incorporated in Bermuda, the shares of which are listed on The Stock
Exchange of Hong Kong Limited;
"Indofood" P.T. Indofood Sukses Makmur Tbk, an Indonesian public company,
the shares of which are listed on the Jakarta Stock Exchange;
"Listing Rules" The Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited;
"Nissin Food" Nissin Food Products Co., Ltd., a Japanese company the
securities of which are listed on the stock exchanges of Tokyo, Osaka,
Nagoya and Luxembourg;
"Salim Investors" means members of the Salim, Djuhar, Sudwikatmono
and Risjad families, and companies controlled by them.
By Order of the Board
First Pacific Company Limited
Ronald A. Brown
Company Secretary
27th April, 1999, Hong Kong
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