- Sale of Petfoods division to Nestle SA for #715m :: Sale of Martin-Brower for #120m :: Proposed return of up to #650m to shareholders :: World leader PIC the core of "new Dalgety" :: Interim pre-tax profits of £34.8m in line with Board expectations
Dalgety PLC announces that it has agreed to sell its Petfoods division to Nestle SA for a cash consideration of £715m. The transaction is subject to the approval of Dalgety shareholders and the European regulatory authorities.
In addition, Dalgety has agreed to sell Martin-Brower, its US food distribution company, to Reyes Holdings for $200m (£120m) payable in cash. The transaction is subject to US regulatory approval.
The excellent prices achieved in the disposals of Martin-Brower and of Dalgety Food Ingredients, which was annonced on January 26, will allow #250m to be returned to shareholders (against the #200m originally envisaged) and a #100m reduction in debt. It is planned that the #250m will be paid before the end of the current financial year. In addition, the sale of the Petfoods division, when completed, is expected to enable the Board both to eliminate debt and, in due course, to return up to a further #400m to shareholders, making up to £650m in total.
Profits before tax for the six months ended December 31, 1997, amounted to #34.8m (1996: £43.0m). These results are in line with the Board's expectation at the start of the year. An interim dividend of 6 pence (1996: 8.5 pence) has been declared as part of a rebalancing of the interim and final dividend payments.
Group Chief Executive, Ken Hanna, said today:
"We have obtained tomorrow's price today for our Petfoods business and have now successfully disposed of three businesses at excellent prices. In aggregate, we have achieved gross proceeds of #1.2 billion, significantly more than our market capitalisation and we intend to pay back up to £650m to shareholders. We also have a rapidly growing world leading business in PIC as the focus of the remaining Group. Shareholder value is being rapidly restored."