Retail Food Group has launched a A$38m (US$30m) takeover bid for Brumby’s Bakeries, which the Brumby’s board is already reported to have accepted.
RFG will acquire Brumby’s Bakeries Holdings (BBH), in a deal comprising $36m in cash and a $2m fully franked dividend payment. “This is a strategic acquisition which will allow Retail Food to apply its proven expertise in managing franchise systems to another high-profile Australian brand,” said Retail Food chairman John Cowley.
The company said the purchase of BBH, which has around 316 outlets across Australia and New Zealand that are either owned or operated by franchisees, would add between 15% to 30% to its EPS outlook for 2008, with synergy benefits of at least $1m a year expected.
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Listed on the Australian Stock Exchange, RFG operates the Donut King and bb’s cafe brands under licence in Australia and New Zealand. The company has forecast a net profit of $7.4m for the 2007 fiscal year. BBH posted a net profit of $2.08m in 2006, up 21% from the previous year.
