RNS Number:7462B
Foster's Brewing Group Ld
6 April 2001
PART 2
5 TAXATION CONSIDERATIONS
5.1 Introduction
The following is an outline of the main Australian income tax consequences
which will generally apply to an Australian resident holder of Wine Planet
Shares who disposes of Wine Planet Shares by accepting an Offer. The
outline does not take into account or anticipate changes in the law (by
legislation or judicial decision). The outline is also not exhaustive of
all income tax considerations which could apply in the circumstances of
any given shareholder. In particular, special rules apply to certain
shareholders (such as persons not resident in Australia, insurance
companies, superannuation funds, banks, employees of Wine Planet (or
associated companies) who acquired their shares in respect of their
employment, and those offerees who trade in shares or hold Wine Planet
Shares as trading stock) which are not covered by this outline. All Wine
Planet Shareholders should consult their own tax advisers regarding the
income tax consequences of disposing of Wine Planet Shares given the
particular circumstances which apply to them.
5.2 Capital Gain or Loss
The sale of Wine Planet Shares pursuant to the Offer will involve the
disposal by Wine Planet Shareholders of their Wine Planet Shares by way of
transfer to Cellarmaster. This change in ownership of the Wine Planet
Shares will constitute a capital gains tax event ("CGT event") for
Australian capital gains tax purposes.
Wine Planet Shareholders who are Australian residents may make a capital
gain if their capital proceeds from the disposal of Wine Planet Shares are
more than the cost base (or, in some cases, the indexed cost base) of
those shares. A capital loss may arise where the capital proceeds are less
than the reduced cost base of the Wine Planet Shares.
The capital proceeds of the CGT event will be the cash received by the Wine
Planet Shareholder in respect of the disposal of the Wine Planet Shares.
The cost base of Wine Planet Shares is generally their cost of acquisition.
If Wine Planet Shares were acquired at or before 11:45 am on 21 September
1999, a Wine Planet Shareholder who is an individual, a trustee of a
complying superannuation entity or a trustee of a trust may elect to adjust
the cost base of the Wine Planet Shares to include indexation by
reference to changes in the Consumer Price Index from the calender quarter
in which the Wine Planet Shares were acquired until the quarter ended 30
September 1999.
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Wine Planet Shareholders which are companies will be entitled to include
that indexation adjustment without making an election if their Wine Planet
Shares were acquired at or before 11.45 am on 21 September 1999. However,
whilst those indexation adjustments are taken into account for the purposes
of calculating any capital gain, they are ignored when calculating the
amount of any capital loss.
Wine Planet Shareholders who are entitled to, but who do not make the
indexation election referred to above (individuals, trustees of complying
superannuation entities or trustees of trusts), may be entitled to discount
the amount of their net capital gain from the disposal of Wine Planet
Shares by 50% in the case of individuals and trustees of trusts (other than
a trust that is a complying superannuation entity) or by 33 1/3% for
trustees of complying superannuation entities. Trustees should, however
seek specific advice regarding the tax consequences of distributions
attributable to discounted capital gains as the tax consequences of these
may vary depending upon the nature of the trust and the character of the
beneficiary to whom the distribution is made. Further, whether it is better
for any given Wine Planet Shareholder to make the indexation election or
not will depend upon the particular shareholder's individual circumstances,
including the cost base of the Wine Planet Shares and whether the Wine
Planet Shareholder has any available capital losses. Wine Planet
Shareholders should consult their own tax advisers regarding whether
it is better in their individual circumstances to make the election or not.
If you are an individual, a trustee of a trust or a trustee of a complying
superannuation entity and acquired your Wine Planet Shares after 11.45 am
on 21 September 1999 and have held your Wine Planet Shares for more than 12
months before the date on which you accept the Offer, you may be eligible
for the CGT discount of 50% (in the case of an individual or a trustee of a
trust other than a complying superannuation fund) or 33 1/3% (in the case
of a trustee of a complying superannuation fund). Companies are not
entitled to a CGT discount.
Capital gains and capital losses are aggregated to determine whether there
is a net capital gain. If so, that net capital gain is included in
assessable income and is subject to income tax. Capital losses may not be
deducted against other income for income tax purposes, but may be carried
forward to offset against future capital gains.
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6 ADDITIONAL INFORMATION
6.1 Source of cash consideration
The consideration for the acquisition of Wine Planet Shares under the Offer is
to be satisfied wholly by payment in cash.
Based on the number of Wine Planet Shares on issue at the date of this
Bidder's Statement, the maximum amount of the consideration which would be
payable by Cellarmaster under the takeover bid for the existing issued
Wine Planet Shares if every holder accepted is approximately $42 million.
The cash required to pay the consideration under the Offer will be funded
through an existing facility with the Commonwealth Bank of Australia
("CBA") available to Foster's through its finance division, FBG Treasury.
The CBA has consented to being named in this Bidder's Statement.
There are no conditions precedent to drawdown in respect of any of these
facilities which have not been satisfied by Foster's as at the date of this
Statement, other than formal matters all of which are capable of fulfilment by
Foster's.
The facilities are provided on terms and conditions, including representations
and warranties, covenants and undertakings and events of default which are
customary for facilities of this type. Foster's is in compliance with all of
these terms and conditions and there are no circumstances which would or would
be likely to constitute a breach or failure to comply with any of those terms
and conditions. These facilities are not repayable prior to the time at which
the consideration is required to be paid to holders of Wine Planet Shares who
accept the Offers in accordance with Section 2.6.
6.2 Wine Planet securities
Based on documents lodged by Wine Planet with ASX and information provided by
Wine Planet, the total number of securities in each class in Wine Planet at the
date of this Bidder's Statement is as follows:
Class Number
Ordinary shares 160,515,655
Options Nil*
* See Section 6.3 for further information.
6.3 Wine Planet Options
Macquarie Bank Limited and a group of current Wine Planet executives,
non-executive directors of Wine Planet and employees of Wine Planet were
granted 6,020,000 options over unissued shares in Wine Planet. The exercise
price of these options range from $1.20 to $1.50. These options have either
lapsed on termination of the holder's employment or the optionholders have
agreed that, upon Cellarmaster detailing the Offer unconditional, their options
will be cancelled. No payment was made to the optionholders for their agreement.
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6.4 Relevant Interest in Wine Planet Securities
As at the date of this Bidder's Statement and as at the date immediately before
the first Offer is sent, Cellarmaster has a relevant interest in approximately
25% of Wine Planet Shares.
6.5 Voting Power in Wine Planet
As at the date of this Bidder's Statement and as at the date immediately before
the first Offer is sent, the voting power of Cellarmaster is approximately 25%.
6.6 Dealings Relating to Wine Planet securities
In the four months before the date of this Bidder's Statement, neither
Cellarmaster nor any associate of Cellarmaster has provided, or agreed to
provide, consideration for any Wine Planet Shares under a purchase or agreement.
6.7 Benefits Relating to Wine Planet Shares
Other than as described in Sections 6.8 and 6.10 of this Bidder's Statement, in
the four months before the date on which this Offer was sent, neither
Cellarmaster nor any associate of Cellarmaster has given, or offered or agreed
to give, to another person a benefit which was likely to induce the other
person, or an associate of the other person, to:
(a) accept an offer; or
(b) dispose of Wine Planet Shares,
which benefit was not offered to all holders of Wine Planet Shares.
6.8 Wine Planet executives and non-executive directors
On the Announcement Date, Wine Planet and Foster's entered into deeds of release
with the following Wine Planet executives: Mr Mark Mezrani, Mr Robert Walters
and Mr Robert Hawkings. The deeds provide that they must resign from office on a
date specified by Foster's following the bid being declared unconditional
and Cellarmaster having majority control of Wine Planet or the date on which
all conditions referred to in Section 2.10(a) are satisfied. On termination,
they are entitled to be paid the following amounts for termination and
redundancy: $400,000 (Mezrani), $225,000 (Hawkings) and $150,000 (Walters).
The parties also provided each other with mutual releases and the executives
agreed not to compete with the existing business of Wine Planet for a period of
time.
The two non-executive directors (Mr Richard Turner) and Mr Warwick Morris) also
entered into deeds of release with Wine Planet and Foster's. The deeds provide
that they must resign as directors on a date specified by Foster's following the
bid being declared unconditional and Cellarmaster having majority control of
Wine Planet or the date on which all conditions referred to in Section 2.10(a)
are satisfied. On termination, the non-executive directors will be paid $45,000
and $25,000 respectively in lieu of their directors fees and the parties also
provided each other with mutual releases subject to certain exceptions.
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6.9 Offer to Purchase
Cellarmaster has received an offer from a third party (a company controlled by
former directors of Wine Planet who resigned as Wine Planet directors in 1999)
offering to purchase the mining subsidiaries and assets of Wine Planet for
nominal consideration. The offer remains open for 7 months and is conditional
on the Offer being declared unconditional.
6.10 Employees
On the Announcement Date, Foster's agreed to pay employees who became redundant
after successful completion of its proposed offer the greater of three months
remuneration and their contractual entitlements on a redundancy. The package
will not apply in certain circumstances, for example, those offered employment
in the Foster's Group will not be entitled to the package.
6.11 Non-solicitation
On the Announcement Date, the Wine Planet Directors agreed not to solicit an
alternative offer or proposal from a third party or to initiate discussions or
negotiations with a third party in relation to an alterative offer or proposal.
This provision does not prevent the Wine Planet Directors from responding to an
unsolicited higher offer.
6.12 Date for Determining Holders
For the purposes of section 633(2) of the Corporations Law, the date for
determining who is entitled to receive the Offer is 5 April 2001.
6.13 Restricted securities
Of the Wine Planet Shares on issue, 68,470,165 Wine Planet Shares are subject to
escrow imposed by the ASX under the restricted securities provisions of the ASX
Listing Rules ("Restricted Wine Planet Shares"). The Restricted Wine Planet
Shares are not generally able to be disposed of by the holder before September
2001, except with the consent of the ASX.
We understand the ASX will consent to the release of the escrow to allow the
holders of Restricted Wine Planet Shares to accept the Offer if acceptances are
received in relation to at least 50% of Wine Planet Shares that are subject to
this Offer (excluding Restricted Wine Planet Shares).
6.14 Employee Share Plan shares
Wine Planet has informed Cellarmaster that all Wine Planet Shares issued
pursuant to the Wine Planet Employee Share Plan have vested. Accordingly,
all holders of such Wine Planet Shares are entitled to accept the Offer in
accordance with Section 2.6.
6.15 Due diligence
For the purposes of confirming its assessment whether or not to proceed with
the Offer, Cellarmaster was given access by Wine Planet and undertook limited
due diligence in relation to certain information concerning Wine Planet which
has not been disclosed generally to Wine Planet Shareholders. Otherwise
than as contained elsewhere in this Bidder's Statement:
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(a) none of the information to which it was given access is of such a
nature and which, if the information were generally available, a
reasonable person would expect to have a material effect on the price or
value of Wine Planet Shares;
(b) there is no other information material to the making of a decision by
a holder of Wine Planet Shares whether or not to accept an Offer by
Cellarmaster, being information that is known to Cellarmaster and has not
previously been disclosed to the holders of Wine Planet Shares.
The fact, however, that Cellarmaster's decision to make the Offer was confirmed
by its review of the information to which it had access may itself be regarded
as information material to a decision whether or not to accept an Offer.
6.16 Public announcements relating to the takeover bid
On 27 March 2001, Foster's and Wine Planet made public announcements in relation
to the Offer to the ASX. Copies of these announcements are below as an
Annexure. Fosters also made public announcements in relation to the Offer to
certain foreign exchanges.
6.17 Wine Planet's Interim Results and Chairman's Address to 2000 AGM
A copy of Wine Planet's half year results to 31 December 2000 and of the
Wine Planet Chairman's Address to the 2000 Annual General Meeting have
been lodged with the ASX.
6.18 Copies of Foster's and Wine Planet announcements
Foster's and Wine Planet are listed on the ASX. Copies of any announcements by
these companies that are not included in this Bidder's Statement may be obtained
from the ASX.
6.19 Wine Planet's ASX Material Disclosures
Wine Planet's material announcements to the ASX since 30 June 2000
(except in relation to the Offer) are:
Date Headline
16 March 2001 Half Yearly Report/ASIC Half Yearly Accounts
12 February 2001 Quarterly Business Update
9 February 2001 Wine Planet UK Agreement
31 January 2001 Second Quarter Report
27 December 2000 Appendix 3B - Contractual Obligation/Issue of Options
20 December 2000 Interim Sales Report
15 November 2000 Results of AGM
15 November 2000 Chairman's AGM Address to Shareholders
30 October 2000 First Quarter Report
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27 October 2000 Quarterly Business Update
18 October 2000 Annual Report
10 October 2000 Appendix 3B - New Issue
3 October 2000 ASIC Annual Audited Accounts
13 September 2000 Preliminary Final Report
22 August 2000 Shareholder Update
28 July 2000 Fourth Quarter Report
6 July 2000 Section 205G Notice - Director's Interests
Wine Planet has agreed to provide copies of these announcements (and those
referred to in Section 6.17) to Wine Planet Shareholders on request.
6.20 Standard ASIC modifications and exemptions
Cellarmaster has been granted various exemptions and modifications under the
Corporations Law by ASIC. These instruments have the effect of varying the
Corporations Law in its application to the Offer for Wine Planet Shares to
address certain drafting anomalies in the Corporations Law as they relate to
off-market takeover bids:
(i) to clarify that the events referred to in item 2, paragraph (d)(ii) of
section 611 of the Corporations Law may operate as conditions,
(ii) to confirm the payment obligations owed to persons who do not tender the
transfer documents at the time of acceptance of the Offer;
(iii) to clarify that notices in relation to the status or fulfilment of a
defeating condition are not required to be published and may instead be
given to Wine Planet, ASIC and/or the ASX;
(iv) to permit the copy of this Bidder's Statement lodged with ASIC and given
to Wine Planet and the ASX to omit the names and addresses of Wine Planet
shareholders, the date of the Offer and dates which relate to, or depend
on, that date;
(v) to permit the disclosures required by sections 636(1)(h), 636(1)(i),
636(1)(k)(ii) and 636(1)(l) of the Corporations Law to be made in the
Bidder's Statement lodged with ASIC as at the date of the Bidder's
Statement, rather than the date of the Offer;
(vi) if the Offer is varied by improving the consideration, to entitle a person
who has already accepted the Offer to receive that improved consideration
within the same period as specified in the Offer;
(vii) to enable the conditions expressed in section 650F of the Corporations Law
to be Satisfied within the time periods specified in that section, even if
that time is after the expiry of the Offer Period;
(viii) to clarify the identity of Cellarmaster's associates; and
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(ix) to permit statements to be made in this Bidder's Statement to be
based on public announcements made by Wine Planet without obtaining the
consent of Wine Planet.
None of the modifications or exemptions have a material effect on the rights or
privileges of Wine Planet Shareholders.
6.21 Other Material Information
There is no other information material to the making of a decision by an offeree
whether or not to accept an Offer (being information that is known to Foster's
and has not previously been disclosed to the holders of Wine Planet Shares)
other than as disclosed in this Bidder's Statement.
6.22 Consent to joint booklet and early despatch of Bidder's Statement
The Corporations Law provides that there must be a minimum of 14 days between
the date a bidder's statement is sent to the target and the date the bidder's
statement is sent to shareholders, unless the directors of the target agree that
it may be sent earlier. The Wine Planet Directors have agreed that the Bidder's
Statement may be sent to Wine Planet Shareholders on any date following the date
on which it is lodged with ASIC. The Wine Planet Directors have also agreed to
the Bidder's Statement and Target's Statement being sent to Wine Planet
Shareholders in a joint booklet.
7 INTERPRETATION
7.1 Definitions
In this Bidder's Statement, unless the context otherwise requires:
"ACCC" means the Australian Competition and Consumer Commission.
"Acceptance Form" means the acceptance form enclosed with, and forming part of,
the Offer.
"Announcement Date" means 27 March 2001, being the date on which Foster's
announced details of the Takeover Bid to ASX
"Approval" means a licence, authority, consent, permission, approval,
clearance, grant, confirmation, order, exemption, waiving or ruling.
"ASIC" means the Australian Securities and Investments Commission.
"ASX" means Australian Stock Exchange Limited.
"ATO" means Australian Taxation Office.
"Bid Period" means the period that starts when this Bidder's Statement is given
to Wine Planet and will end at the end of the Offer Period.
"Bidder's Statement" means this bidder's statement.
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"Broker" means a member organisation admitted to participate in CHESS under
Rule 2.1.1 or a department or subsidiary of ASX admitted to participate in
CHESS under Rule 2.5.1 (c) of the SCH Business Rules.
"Cellarmaster" means Cellarmaster Wines Pty Limited ABN 95 076 727 949.
"CHESS" means Clearing House Electronic Subregister System administered by the
securities clearing house approved under section 779B of the Corporations Law
for that purpose.
"CHESS Holding" means a holding of Wine Planet Shares on the CHESS subregister
of Wine Planet.
"Controlling Participant" means in relation to a CHESS Holding, the participant
that has the capacity in CHESS to transfer Wine Planet Shares from the share
register.
"Foster's" means Foster's Brewing Group Limited ABN 49 007 620 886.
"Foster's Group" means Foster's and its Related Bodies Corporate.
"Independent Directors" means all of the Wine Planet Directors other than the
Wine Planet Director nominated by Cellarmaster (Phillip Taylor).
"Issuer Sponsored Holdings" means a holding of Wine Planet Shares on Wine
Planet's issuer sponsored subregister.
"Listing Rules" means the listing rules of ASX.
"Non Broker Participant" means an entity admitted to participate in CHESS under
SCH Business Rule 2.3.1, 2.3.2 or 2.4.1 or a department of a subsidiary of ASX
admitted to participate in CHESS under SCH Business Rule 2.5.1(d).
"Offer" means the offer contained in this Bidder's Statement and "Offers"
means the like offers despatched or to be despatched to other holders of Wine
Planet Shares (or persons entitled to receive such offers under the Takeover
Bid)
"Offer Period" means the period during which the Offer remains open for
acceptance in accordance with Section 2.
"Prescribed Occurrence" means any of the following events:
(a) Wine Planet converts all or any of its shares into a larger or
small number of shares;
(b) Wine Planet or a subsidiary of Wine Planet resolves to reduce
its share capital in any way;
(c) Wine Planet or a subsidiary of Wine Planet:
(i) enters into a buy-back agreement;
(ii) resolves to approve the terms of a buy-back agreement under
section 257C(1) or 257D(1) of the Corporations Law;
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(d) Wine Planet or a subsidiary of Wine Planet issues shares, or grants an
option over its shares, or agrees to make such an issue or grant such an option;
(e) Wine Planet or a subsidiary of Wine Planet issues or agrees to issue,
convertible notes;
(f) Wine Planet or a subsidiary of Wine Planet disposes of the whole, or a
substantial part, of its business or property;
(g) Wine Planet or a subsidiary of Wine Planet charges, or agrees to charge, the
whole, or a substantial part, of its business or property;
(h) Wine Planet or a subsidiary of Wine Planet resolves to be wound up;
(i) a liquidator or provision liquidator of Wine Planet or any subsidiary of
Wine Planet is appointed;
(j) a court makes an order for the winding up of Wine Planet or of any
subsidiary of Wine Planet;
(k) an administrator of Wine Planet, or of any subsidiary of Wine Planet, is
appointed under section 436A, 436B or 436C of the Corporations Law;
(l) Wine Planet or any subsidiary of Wine Planet executes a deed of company
arrangement; or
(m) a receiver, or receiver and manager, is appointed in relation to the whole,
or a substantial part, of the property of Wine Planet or of any subsidiary of
Wine Planet.
"Public Authority" means any government or any governmental, semi-governmental,
administrative, statutory or judicial entity, authority or agency, whether in
Australia or elsewhere, including without limitation, the ACCC and any
self-regulatory organisation established under statue or any stock exchange.
"Record Date" means 5 April 2001 being the date set by Cellarmaster under
section 633(2) of the Corporations Law.
"Related Body Corporate" has the meaning given to that term in the Corporations
Law.
"Restricted Wine Planet Shares" means the Wine Planet Shares described in
Section 6.13.
"Rights" means all accretions and rights attaching to or arising from Wine
Planet Shares on or after the Announcement Date (including, without limiting the
generality of the foregoing, all rights to receive dividends, bonuses or other
shares of its profits and assets as well as all rights to receive or subscribe
for shares, stock units, or notes or options and all other distributions or
entitlements, declared, paid or issued by Wine Planet).
"SCH" means the securities clearing house which administers the CHESS system in
Australia.
"SCH Business Rules" means the business rules of ASX Settlement and Transfer
Corporation Pty Ltd.
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"Takeover Bid" means the off-market bid in accordance with Part 6.5 of the
Corporations Law under which Cellarmaster Offers to acquire all Wine Planet
Shares that it does not already own.
"Wine Planet" means Wine Planet Holdings Limited ABN 40 008 728 505.
"Wine Planet Directors" means the directors of Wine Planet.
"Wine Planet Board" means the board of directors of Wine Planet.
"Wine Planet Group" means Wine Planet and its Related Bodies Corporate.
"Wine Planet Shares" means fully paid ordinary shares in the capital of Wine
Planet and all Rights attaching to them.
"Wine Planet Shareholder" means a holder of Wine Planet Shares.
"Your Wine Planet Shares" means the Wine Planet Shares in respect of which you
are registered or entitled to be registered as holder at 7 pm on the Record Date
and any other Wine Planet shares that come into existence during the Offer
Period due to the conversion of or exercise of rights attached to other
securities.
7.2 Construction
In this Bidder's Statement, unless expressed to the contrary:
(a) words importing:
(i) the singular include the plural and vice versa; and
(ii) any gender include the other gender;
(b) if a word or phrase is defined, cognate words and phrases have corresponding
definitions;
(c) if a word or phrase is defined in the Corporations Law, it bears the same
meaning;
(d) a reference to:
(i) a person includes a firm, unincorporated association, corporation and
a government or statutory body or authority;
(ii) a person includes the legal personal representatives, successors and
assigns of that person;
(iii) a statute, ordinance, code or other law includes regulations and other
statutory instruments under it and consolidations, amendments, re-enactments or
replacements of any of them;
(iv) a right includes a benefit, remedy, discretion, authority or power;
(v) "$", "c", or "dollars" is a reference to the lawful currency of
Australia;
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(vi) a clause, section or paragraph is to a clause, section or paragraph in
this Bidder's Statement.
7.3 Headings
Headings are for ease of reference only and do not affect the interpretation of
this Bidder's Statement.
8 APPROVAL
This Bidder's Statement was approved by a resolution passed by the directors of
Cellarmaster.
DATED 4 APRIL 2001
Signed for and on behalf of Cellarmaster Wines Pty Limited by Trevor O'Hoy,
being a director of Cellarmaster Wines Pty Ltd who is authorised to sign this
Bidder's Statement on behalf of Cellarmaster Wines Pty Ltd pursuant to a
resolution passed at a meeting of the directors on 4 April 2001.
Trevor O'Hoy
Director
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ANNEXURE
FOSTER'S BREWING GROUP LIMITED
FOSTER'S ANNOUNCES TAKEOVER OFFER FOR WINE PLANET
Melbourne, Australia: 27 March 2001: Foster's Brewing Group Limited ("Foster's")
announced today that its wholly owned subsidiary, Cellarmaster Wines Pty
Limited ("Cellarmaster"), will make a cash offer of 35 cents per share to
acquire all the ordinary shares in Wine Planet Holdings Limited ("Wine
Planet") to which it is not currently entitled. Foster's presently owns
approximately 25% of Wine Planet, through Cellarmasters.
If successful in its bid to acquire Wine Planet, Foster's intention is to focus
the business activities in offshore markets.
Foster's President and CEO, Mr Ted Kunkel said, "The acquisition will allow
Foster's to reconstruct Wine Planet into an international wine e-tailing
business in support of our European and Asian wine clubs."
"We will look at a range of options in relation to the Australian assets.
However, if the offer is successful, Foster's will not continue to operate the
Wine Planet domestic e-tailing business in its own right" he said.
The Wine Planet board has confirmed that it will recommend the offer to its
shareholders, and the independent directors, who collectively hold 23% of the
issued shares of Wine Planet, have also stated that they intend to accept the
offer in respect of their own shares, in the absence of a higher offer.
Foster's believes the offer is fair and reasonable. The offer values Wine
Planet equity at approximately $56 million compared to its market
capitalisation of approximately $35 million at last Friday's close. The offer
represents a premium of:
- 59% to last Friday's closing share price of 22 cents; and
- 49% to the volume weighted average share price over the three month period
to last Friday of approximately 23 cents.
Mr Kunkel said: "This is a highly attractive offer which we believe provides
Wine Planet shareholders with a cash offer at a premium to what they would
otherwise be able to realise."
The acquisition will be funded using existing debt facilities. However,
Foster's cash outlay of approximately $42 million broadly equates with the cash
in the business.
The offer is subject to a number of conditions which are set out in Appendix 1
(below). The offer will be open for one month, unless extended.
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Full details of the offer will be set out in Foster's Bidder's Statement which
is expected to he lodged shortly and despatched to Wine Planet shareholders in
April.
For further information:
Media
Graeme Willersdorf Nicole Devlin
+613 9633 2073 +613 9633 2261
0418 288 400 0418 202 375
Investor Relations
Domenic Panaccio
+613 9633 2773
0418 243 714
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FOSTER'S BREWING GROUP LIMITED'S OFFER FOR
WINE PLANET HOLDINGS LIMITED
OFFER CONDITIONS
Foster's takeover offer for Wine Planet (through a wholly owned subsidiary of
Foster's) will be subject to various conditions, including those summarised
below:
- minimum acceptance condition - Foster's and its associates having
received acceptances so that it will own at least 80% (by number) of Wine
Planet ordinary shares;
- regulatory approvals - all approvals and consents which are required by
law or by any public authority being unconditionally granted, given, made
or obtained and remaining in full force and effect;
- absence of regulatory action - no action being taken by any regulatory or
public authority before the end of the offer period which might restrain
or otherwise adversely impact the offer or require divestiture of shares
or assets, having a material value, from either the Foster's or Wine
Planet group;
- no material adverse change - no material adverse change occurring (or
being announced or otherwise becoming public) in relation to the
structure, business, financial or trading position or condition, assets or
liabilities, profitability or prospects of Wine Planet or its
subsidiaries, taken as a whole;
- prescribed occurrences - none of the matters set out in section 652C of
the Corporations Law;
- securities - no securities which are convertible to ordinary shares or
options over its shares;
- options - the Wine Planet Board (nor any committee of the Wine Planet
Board) not exercising any discretion under the Wine Planet Executive
Option Plan to permit any options over shares in Wine Planet to continue
to exist when they would otherwise have lapsed;
- cash - cash and trade debtors (excluding doubtful debtors) of Wine Planet
and its subsidiaries remain not less than A$39.5 million;
- liabilities - liabilities (including lease liabilities, contingent
liabilities and provisions in full for redundancies and termination of
employees and executives) of Wine Planet and its subsidiaries are not more
than A$4 million;
- dividends - Wine Planet not declaring, paying or distributing any
dividend, bonus or other share of its profits or assets;
- conduct of business - Wine Planet continuing to conduct the business of
Wine Planet and its subsidiaries in the ordinary manner consistent with
past practice;
- acquisitions and disposals of assets - other than selling and buying
trading stock in the ordinary course of business, Wire Planet does not:
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- purchase or otherwise acquire, or agree to purchase or otherwise
acquire, or sell or otherwise dispose of, or agree to sell or
otherwise dispose of, any property or assets (or any right, title or
interest therein), the total consideration for which, or value of
which, exceeds A$1,000,000; or
- enter into any other commitments which would require expenditure by
the Wine Planet group of an amount which, in aggregate, exceeds
A$1,000,000.
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LETTER TO: Australian Stock Exchange Limited
RE: WINE PLANET BOARD RECOMMENDS OFFER TO SHAREHOLDERS
The Board of Directors of Wine Planet Holdings Limited ("Wine Planet") has been
notified today that Foster's Brewing Group Limited ("Foster's"), through a
wholly owned subsidiary, intends to make off-market takeover bid for all of the
issued shares in Wine Planet other than the 24.6% that it already owns.
Foster's will offer 35 cents cash consideration for each ordinary share in Wine
Planet, valuing the company at approximately $56 million.
The Board of Directors of Wine Planet welcomes the offer from Foster's and notes
the significant premium offered over the current share price. Each of the
independent Directors recommends shareholders accept the Foster's offer, in the
absence of a higher offer.
The independent directors of Wine Planet also advise that they intend to accept
the Foster's offer in respect of all their own shares, in the absence of a
higher offer. The Board has also been informed that several other Wine Planet
shareholders intend to accept the offer, in the absence of a higher offer.
Collectively, these two shareholder groups represent 43% of the total ordinary
shares of Wine Planet.
The offer represents a premium of 59% to last Friday's closing share price of
22 cents. In addition, it represents a premium of 49% to the volume weighted
average share price over the three month period to last Friday of 23 cents.
Foster's has advised the Board of Directors of Wine Planet that the offer is
subject to a number of conditions which are contained in the below Foster's
announcement.
38
Commenting on the Foster's offer, Wine Planet Chairman, Mr Richard Turner,
said, "Foster's offer of 35 cents per share delivers a premium of 59% over last
Friday's closing price, which we believe is fair and reasonable. So, in the
absence of a higher offer, the Board recommends that it be accepted by Wine
Planet shareholders".
For further information contact:
Mark Mezrani
Robert Hawkings
(02) 8594 3501
LETTER FROM: WINE PLANET
39
TARGETS STATEMENT
by
WINE PLANET HOLDINGS LIMITED
ABN 40 008 728 505
40
CONTENTS
Page No.
1 INTRODUCTION 41
2 PRICE MOVEMENTS IN WINE PLANET SHARES 41
3 DIRECTORS' RECOMMENDATION 41
4 REASONS FOR INDEPENDENT DIRECTORS' RECOMMENDATION 42
5 DIRECTORS' INTEREST IN WINE PLANET SHARES AND
INTENTIONS REGARDING OFFER 43
6 WINE PLANET'S DIRECTORS INTERESTS AND DEALINGS IN
CELLARMASTER OR FOSTER'S SECURITIES 44
7 DEALINGS IN WINE PLANET SHARES BY WINE PLANET'S
ASSOCIATES 45
8 OTHER MATERIAL INFORMATION 45
9 YOUR ALTERNATIVES 45
10 APPROVAL OF STATEMENT 46
11 DEFINITIONS AND INTERPRETATION 47
41
1. INTRODUCTION
1.1 On 27 March 2001 Cellarmaster, a wholly owned subsidiary of Foster's
announced an off-market bid for all of the issued shares in Wine Planet.
Cellarmaster has offered $0.35 for each Wine Planet share. Details of
Cellarmaster's offer are set out in the Bidder's Statement.
1.2 This Target's Statement is Wine Planet's formal response to the Bidder's
Statement. It is required by section 633 of the Corporations Law and must
contain the information required by section 638 and comply with section
639 of the Corporations Law. Your Independent Directors have determined
not to include information which has been included in the Bidder's
Statement and may therefore reasonably be expected to be known to
shareholders and their professional advisers.
1.3 Certain terms used in this Target's Statement are defined in paragraph
11.1 below.
2. PRICE MOVEMENTS IN WINE PLANET SHARES
Date Price traded
Volume weighted average over 3 months to 23 March 2001 $0.23
Closing Price 23 March 2001 $0.22
Closing Price 27 March 2001 (date Offer announced) $0.335
(Date Bidder's Statement lodged) (INSERT)
3. DIRECTORS' RECOMMENDATION
3.1 Wine Planet's Directors are:
(a) Richard Turner (Chairman);
(b) Mark Mezrani (Chief Executive Officer);
(c) Warwick Morris; and
(d) Phillip Taylor (Cellarmaster's representative on the Board).
3.2 Phillip Taylor is General Manager of Group Operations at Cellarmaster. He
was appointed to the Wine Planet Board as the representative of
Cellarmaster, which holds 24.6% of the shares in Wine Planet. As a result,
Mr Taylor has a material personal interest in the Offer and was not
present at, nor did he vote at, Board meetings at which the Offer was
discussed. This Target's Statement does not contain a recommendation from
him for this reason.
3.3 Your Independent Directors unanimously recommend that you accept the
Cellarmaster Offer of $0.35 for each Wine Planet share, in the absence of
a higher offer. All of the Independent Directors (and their associated
entities) intend to accept the Offer, in the absence of a higher offer.
Certain other shareholders have also indicated that they intend to accept
in the absence of a higher offer. Together with the Independent Directors,
they hold approximately 43% of Wine Planet's Shares.
42
4. REASONS FOR INDEPENDENT DIRECTORS' RECOMMENDATION
Richard Turner, Mark Mezrani and Warwick Morris all recommend that you
accept the Offer, in the absence of a higher offer, for the reasons set
out below:
4.1 Cellarmaster is offering a substantial premium to Wine Planet shareholders
Cellarmaster is offering:
(a) a 59% premium to Wine Planet's closing share price on 23 March 2001,
which was the last full trading day before the Offer was announced;
(b) a 49% premium to Wine Planet's volume weighted average over the 3
months to 23 March 2001;
(c) a 40% premium to Wine Planet's share price immediately before the
trading halt in relation to its shares was implemented on 26 March
2001; and
(d) a valuation of Wine Planet at $56 million, compared with a market
capitalisation of approximately $35 million at close of trade on 23
March 2001.
4.2 Wine Planet is facing an uncertain business climate
In the Quarterly Business Update lodged with the ASX on 12 February 2001,
the Directors identified a number of constraints to revenue growth and
future profitability. Wine Planet continues to experience slower than
expected growth due to the following constraints:
(a) Internet penetration and take up of e-commerce has been slower than
expected;
(b) the sales environment for e-tailers remains volatile and subject to
large fluctuations;
(c) the general retail malaise due to the Sydney Olympics and the
introduction of the GST has continued through the Christmas period
and into 2001;
(d) market and consumer sentiment towards e-commerce companies has
continued to decline and this decline in sentiment has had a
detrimental effect on consumer willingness to purchase from e-
tailers; and
(e) the correction to technology share prices in April 2000 and their
continuing slide since has adversely affected the ability of e-
commerce companies to raise further cash from the sharemarket. The
resulting reduction in spending on marketing (due to concerns about
cash burn rates) has affected sales revenue growth.
4.3 Share price
Your Independent Directors believe that the factors outlined in paragraph
4.2 above make it unlikely that the Wine Planet Shares will trade at or
near the Offer price in the foreseeable future.
4.4 Alternative offer
Your Independent Directors believe that the factors outlined in paragraph
4.2 above combined with the large parcel of Wine Planet Shares currently
held by Cellarmaster, which may act as a deterrent to any potential
bidder, make it unlikely that an alternative offer for the all of Wine
Planet Shares will emerge in the foreseeable future.
43
5. DIRECTORS' INTERESTS IN WINE PLANET SHARES AND INTENTIONS REGARDING OFFER
5.1 Wine Planet's Independent Directors have the interests in the Wine Planet
Shares set out below and:
(a) in the absence of a higher offer; and
(b) subject to approval by the ASX (as described in paragraph 5.2
(below)),
the Directors intend to accept the Offer as indicated and procure that
their related entities accept the Offer:
Director Number and Interest in Wine Planet Shares Intention re
class of (shares held) (voting power) bid
securities
Mark Mezrani 21,516,627 13.4% 43% Accept
ordinary shares 1
Warwick Morris 15,271,695 9.5% 43% Accept
ordinary shares 2
Richard Turner 100,000 0.07% 0.07% Accept
ordinary shares
Phillip Taylor Nil Nil Nil Not
Applicable
5.2 68,470,165 shares in Wine Planet are subject to an ASX imposed escrow
until 1 September 2001. These shares are held (either personally or
through a controlled entity) by six persons. Of these six, only Mr Mezrani
and Mr Morris are Directors. The ASX may consent to allow the release of
these securities from escrow to enable these holders of escrowed shares to
accept the Offer for their Wine Planet Shares if holders of at least half
of the Wine Planet Shares that are not subject to ASX escrow, or owned by
Cellarmaster, have accepted the Cellarmaster Offer. If these conditions
are satisfied, Mr Mezrani and Mr Morris intend to request that ASX consent
to release their shares from escrow to enable them to accept the Offer, in
the absence of a higher offer.
1 Mr Mezrani's shares are held through Pacster Pty Ltd and 21,119,553 of those
shares are subject to ASX imposed escrow
2 Mr Morris' shares are held through Wine Capers Pty Ltd and 14,984,939 of
those shares are subject to ASX imposed escrow
44
5.3 Directors, employees and former employees of Wine Planet were granted
6,020,000 options over unissued shares in Wine Planet as set out below:
Issued under Number Issued Issue Date Exercise Price Expiry Date
Executive Option
Plan
Directors 1,060,000 08/12/1999 1.50 08/12/2004
Other Executives 800,000 08/12/1999 1.50 08/12/2004
Directors 400,000 22/02/2000 1.20 22/02/2005
Other Executives 1,960,000 22/02/2005 1.50 22/02/2005
Macquarie Bank 1,400,000 22/02/2005 1.50 22/02/2004
Ltd
Other Executives 400,000 22/12/2005 1.22 22/12/2005
5.4 Each holder of options in Wine Planet has either agreed to renounce all of
their rights to these options upon Cellarmaster declaring the Offer
unconditional, or the options have lapsed on termination of the holder's
employment with Wine Planet. The Plan Committee of Wine Planet has
confirmed that it has not exercised its discretion under the Wine Planet
Option Plan Rules to allow any of the optionholders listed above to
exercise their options prior to their expiry date.
6. WINE PLANET'S DIRECTORS' INTERESTS AND DEALINGS IN CELLARMASTER OR FOSTER'S
SECURITIES
6.1 None of the Independent Directors or any of their associates have any
interests in securities of Cellarmaster or Foster's except as set out
below:
(a) Richard Turner holds 15,000 ordinary shares in Foster's through a
private superannuation fund; and
(b) Phillip Taylor holds ordinary share in Foster's. As indicated in
paragraph 3.2 above, Mr Taylor is Cellarmaster's appointment to the
Board and has neither been present at nor voted at Board meetings at
which the Offer was discussed.
6.2 There have been no acquisitions or disposals of shares in Cellarmaster or
Foster's by Wine Planet or any Director of Wine Planet or any of their
associates, in the 4 months ending on the day immediately before the day
on which the Bidder's Statement was served on Wine Planet.
45
7. DEALINGS IN WINE PLANET SHARES BY WINE PLANET'S ASSOCIATES
There have been no acquisitions or disposals of Wine Planet Shares by any
associate of Wine Planet in the four months ending on the day immediately
before the day on which the Bidder's Statement was served on Wine Planet,
except as set out below:
Name Date Description of Number of Price
dealing securities
Mr R.I. Walters* 20 December 2000 On market sale 80,000 $0.34
Mr R.I. Walters 21 December 2000 On market sale 70,000 $0.3243
Mr R.I. Walters 22 December 2000 On market sale 10,000 $0.33
* Mr Walters is an executive officer of Wine Planet and is associated with
Mr Mezrani and Mr Morris pursuant to a voluntary escrow agreement entered into
by each individual and their related entities and others on 28 March 2000 and
approved by Wine Planet shareholders at a general meeting on 1 June 2000.
8. OTHER MATERIAL INFORMATION
8.1 Interest of Directors in contracts
No Director has any interest in any contract entered into by Cellarmaster,
except as set out below:
(a) each of the Independent Directors entered into the deeds of release
detailed in section 6.8 of the Bidder's Statement; and
(b) Phillip Taylor is employed as a senior executive by Cellarmaster.
8.2 Offer Conditions
The conditions to the Offer are set out in section 2.10(a) of the Bidder's
Statement.
9. YOUR ALTERNATIVES
You have several alternatives in relation to the Offer:
9.1 Accepting the Offer
If you wish to accept the Offer, you should follow the instructions set
out in the acceptance and transfer form enclosed with the Bidder's
Statement. Subject to satisfaction of the conditions of the Offer, you
will be paid $0.35 cash for each Wine Planet share held by you. You will
not incur any stamp duty or brokerage charges if you accept the Offer.
46
If the conditions of the Offer are not satisfied by the end of the Offer
period (currently (date)) the Offer will lapse.
If you accept the Offer prior to the satisfaction or waiver of all
conditions of the Offer, two outcomes are possible. Either:
(a) all conditions of the Offer will be satisfied or waived prior to the
close of the Offer period, in which case you will received $0.35 cash
per Wine Planet Share; or
(b) all conditions of the Offer will not be waived or satisfied prior to
the close of the Offer period, in which case you will retain your Wine
Planet Shares.
The Independent Directors of Wine Planet unanimously recommend you accept
the Offer from Cellarmaster, in the absence of a higher offer.
9.2 Selling your shares on the ASX
You may sell your Wine Planet Shares on the ASX. The price you will
receive will depend on the prevailing market price of Wine Planet Shares
at the time of sale.
You should be aware that the market price of Wine Planet Shares may rise
or fall during the Offer period and following the close of the Offer.
You should also note that you will be required to pay any stamp duty and
brokerage payable on the sale of your shares on the ASX.
9.3 Rejecting the Offer
If you wish to reject the Offer and retain your Wine Planet Shares, you do
not need to take any action in relation to the Offer.
You should be aware that the Independent Directors and their associates,
in the absence of a higher offer, intend to accept the Offer. Your Wine
Planet Shares may be subject to compulsory acquisition in accordance with
the Corporations Law, even if you reject the Offer.
10. APPROVAL OF STATEMENT
10.1 This Target's Statement has been approved by a resolution passed by the
Independent Directors.
10.2 Each Independent Director has:
(a) consented to their recommendation that the Offer be accepted, and
their reasons for the recommendation, being included in this Target's
Statement in the form and context in which it is included; and
(b) not withdrawn this consent before this Target's Statement is lodged
with the ASIC.
47
10.3 Foster's and Cellarmaster have consented to:
(a) the Bidder's Statement accompanying this Target's Statement;
(b) statements made by Foster's being included in this Target's Statement
in the form and context in which they are included: and
(c) this Target's Statement cross referring to the Bidder's Statement in
the manner and context in which such cross references are made.
11. DEFINITIONS & INTERPRETATION
11.1 Definitions
In this statement, unless the context otherwise requires:
'ASIC' means Australian Securities and Investments Commission.
'ASX' means Australian Stock Exchange Limited
'Bidder's Statement' means the bidder's statement dated 4 April 2001
served on Wine Planet by Cellarmaster on 5 April 2001, a copy of which is
contained in this booklet.
'Board' means the board of Directors.
'Cellarmaster' means Cellarmaster Wines Pty Ltd ABN 95 076 727 949, having
its registered office at 77 Southbank Boulevard, Southbank, Melbourne.
'Directors' means directors of Wine Planet.
'Ewines' means Ewines Pty Limited ABN 48 082 976 403, having its
registered office at 1-19 Booth Street, Annandale, Sydney.
'Foster's' means Foster's Brewing Group Limited ABN 49 007 620 886, having
its registered office at 77 Southbank Boulevard, Southbank, Melbourne.
'Independent Directors' means each of Richard Turner, Mark Mezrani and
Warwick Morris.
'Offer' means the offers by Cellarmaster made in the Bidder's Statement to
acquire all Wine Planet Shares.
'Target's Statement' means this document, lodged with the ASIC on 5 April
2001.
'Wine Planet' or 'Company' means Wine Planet Holdings Limited ABN 40 008
728 505, having its registered office at 1-19 Booth Street, Annandale,
Sydney.
'Wine Planet Shares' means all ordinary shares in Wine Planet.
11.2 Interpretation
In this statement unless the context otherwise requires:
(a) the singular includes the plural and vice versa and words importing
one gender include other genders;
48
(b) terms defined in the Corporations Law as at the date of this statement
have the meanings ascribed to them in the Corporations Law at that
date;
(c) a reference to any currency is a reference to Australian currency;
(d) a reference to a statute of any parliament or any section, provision
or schedule of a statute of any parliament includes a reference to any
statutory amendment, variation or consolidation of the statute,
section, provision or schedule and includes all statutory instruments
issued under the statute, section, provision or schedule;
(e) a reference to a paragraph, clause, schedule or annexure is a
reference to a part of this statement and a reference to this
statement includes any schedules and annexures; and
(f) a reference to time is a reference to time in Sydney, Australia.
11.3 Headings
In this statement, headings are used for reference only.
DATED 5 April 2001, being the date on which this Target's Statement was lodged
with the ASIC.
SIGNED on behalf of Wine Planet by each of the Independent Directors
Richard Turner Mark Mezrani Warwick Morris
Chairman
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