Savola acquires Al-Muhaidib’s shareholding in subsidiaries

The Savola Group has announced its acquisition of Al-Muhaidib Holding Company’s 10 percent shareholding in Savola Foods Company (SFC) and its 18.6 percent (direct and indirect) shareholding in Azizia Panda United Company (Panda) in exchange for issuing new shares in Savola to Al-Muhaidib based on a new agreed valuation (transaction) following the approval of its board of directors.
For the purposes of the transaction, SFC and Panda have been valued (on a 100 percent equity basis) at SR 6.26 billion and at SR 3.83 billion, respectively. As a result, Al-Muhaidib’s shareholdings in SFC and Panda are valued at SR 626.3 million and SR 712.6 million, respectively (total value of transaction is SR 1.34 billion).
As consideration for the acquisition of Al-Muhaidib’s shares in SFC and Panda, Savola will issue 33,980,684 new shares to Al-Muhaidib, representing approximately 6.4 percent of Savola's entire issued share capital after the issue of the new shares. This will increase Savola’s total shares in issue from 500,000,000 shares to 533,980,684 shares. The number of new Savola shares to be issued has been determined using a 60-day volume weighted average share price of SR 39.40 as of March 16, 2013.
According to Abdulraouf Mannaa, managing director of the Savola Group, the performed transaction is in line with Savola’s strategy of focus and sustainable growth in the food and retail sectors. Mannaa added: “As a result of the transaction, the combined shareholding of AbdulKadir Al-Muhaidib & Sons and Al-Muhaidib Holding Company in Savola will increase from 8.52 percent to 14.34 percent, and Savola’s direct and indirect shareholding in SFC and Panda will increase from 90 percent to 100 percent and from 74.4 percent to 93.0 percent respectively.”
The Transaction is considered to be a related party transaction because AbdulKadir Al-Muhaidib & Sons owns 8.52 percent of Savola's shares as at the date of this announcement and Sulaiman AbdulKadir Al-Muhaidib is the chairman of the board of directors for the Savola Group and AbdulKadir Al-Muhaidib & Sons Co.
Samba Capital & Investment Management Company is acting as financial adviser to Savola. and Jadwa Investment Company is acting as financial adviser to Al-Muhaidib in relation to this transaction.
Savola intends to enter into a binding conditional sale and purchase agreement with Muhaidib to give effect to the transaction and will seek to obtain the requisite regulatory approvals and the approval of Savola’s shareholders at an extraordinary general assembly meeting to increase the capital of Savola.
Further announcements concerning any material developments in relation to the transaction will be made by Savola in due course.
The Savola Group operates in three core sectors — the food sector, which includes edible oils, sugar and pasta; the retail sector through Azizia Panda supermarkets and hypermarkets; and the plastics sector, which manufactures both rigid and flexible plastic products. In addition, the group has a diversified portfolio of strategic investments in which it owns 36.6 percent of Al-Marai fresh dairy company, 49 percent of Herfy foods and restaurant chain, and 29.9 percent of Kinan International Real Estate. The Savola Group is also one of the founders of Knowledge Economic City in addition to its shareholdings in major companies and other investments portfolios.