Heinz picks fruit and juice company

HJ Heinz Co, the world's largest ketchup maker, agreed to acquire Golden Circle Ltd for A$288 million (US$212 million) in cash, to gain a clutch of Australian juice, snack and spread brands.

The offer of A$1.65 a share is supported by the board and the major shareholder Anchorage Capital Partners Ltd, Golden Circle said in an e-mailed statement yesterday that was reported by Bloomberg News.

The Heinz offer is more than quadruple Golden Circle's last traded price of 40 cents on the National Stock Exchange of Australia.

Golden Circle, which has been unprofitable for the past two years, has agreed to be sold less than a year after converting from a farmer-owned cooperative to a publicly traded company.

Anchorage took a 35 percent stake last year after a A$1 a share offer from Coca-Cola Amatil Ltd was rejected.

'Compelling value'

"The Heinz proposal represents a compelling value proposition and is in the best interests of Golden Circle shareholders," Chairman Phillip Cave said in the statement.

"The continuation of contracts between growers and Golden Circle was an issue of high importance during our deliberations regarding the Heinz proposal. Heinz has indicated its desire to maintain grower contracts."

Golden Circle shareholders will vote on the bid at a November 13 meeting, subject to a report by Ernst & Young ruling it in the best interest of investors.

The offer also needs the approval of antitrust and foreign investment regulators, the company said.

ABN Amro Holding NV is advising Golden Circle and Heinz is being advised by UBS AG, the statement said.

Golden Circle cans fruit and vegetables and also owns the Original Juice Co label.