15th Dec 2005 07:00
Fyffes PLC15 December 2005 Stock Exchange Announcement Fyffes creates new quoted property company with initial net assets of €200million Summary Fyffes plc intends to establish a new, separately quoted property company,Bluestone Properties plc, with initial net assets of approximately €200 million.Fyffes' shareholders will directly own 60% of Bluestone, corresponding to €120million of book value, equivalent to €0.34 per share. Fyffes will own theremaining 40% of Bluestone, representing €80 million of book value, equivalentto €0.23 per share. In aggregate, the proposal has the potential to createvalue for the Group's shareholders equivalent to €0.57 per existing Fyffesshare. Bluestone, a debt free company managed by a highly experienced propertyteam, will have the capacity to further develop its portfolio and to pursue newopportunities on a significantly greater scale. Details of the proposal Fyffes has recently commissioned independent valuations of certain of itsproperties, mainly in Ireland and the UK. The valuers have determined that the25 properties involved have a current market value of approximately €190million, compared to a net book value of approximately €110 million. Fyffes believes that shareholder value can be enhanced by de-merging the Group'sproperty activities, including associated debt, from its fresh produce business.It intends to seek shareholder approval to transfer these properties intoBluestone, which will initially be owned by Fyffes' current shareholders. It isproposed that, immediately thereafter, Fyffes will subscribe €80 million toacquire a 40% shareholding in Bluestone, the latter using part of this cash torepay the €60 million debt transferred with the de-merged properties. Following the de-merger and subscription by Fyffes, Bluestone will have aninitial net asset value of €200 million, comprising properties of €180 million(net of deferred tax of €10 million) and net cash of €20 million. The Group'sshareholders will own 60% of Bluestone, corresponding to €120 million of bookvalue, equivalent to €0.34 per share. Fyffes' 40% stake in Bluestone will havea book value of €80 million, equivalent to €0.23 per share. The combined netasset value attributable to each existing Fyffes shareholder will therefore beapproximately €0.57 per share. It is intended that Bluestone will be listed on the AIM market in London (AIM)and IEX in Dublin. Davy will be appointed nominated adviser and broker toBluestone. Fyffes will enter into arm's length lease agreements for the properties which itcurrently uses in its fresh produce business. The related rental commitments(net of the operating costs of the properties to be assumed by Bluestone) areexpected to reduce Fyffes' annual adjusted earnings per share by approximately€0.008 per share. The de-merger and the subscription for equity in Bluestone will reduce Fyffes'total net assets by approximately €40 million, including its net cash by €20million. Fyffes will continue to hold other properties, mainly in ContinentalEurope, with a net book value of approximately €70 million. These propertiesare in the process of being revalued. The chairman of Bluestone will be Fyffes chairman, Carl McCann, and its managingdirector will be Robert Knox, who has been with the Group for 13 years andcurrently heads its property business. Alan White, a director of LenboroughConsultants, a UK property consultancy, and formerly property director ofBritish Telecom, has agreed to become a non-executive director. It is intendedthat independent non-executive directors will comprise the majority of the Boardof Bluestone. Detailed documentation in relation to the de-merger plan will be posted toshareholders in March 2006 in advance of an EGM (subject to all necessaryregulatory and other approvals being obtained in the meantime). 15 December 2005 For further information please contact: Brian Bell, Wilson Hartnell PRTel: +353-1-669 0030 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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