| Withdrawal of 4.5p proposed offer for Coffee Republic |
| 13 December 2002 |
Last week, Caffe Nero's Board presented a proposed offer to the board of Coffee Republic to purchase the entire issued share capital of Coffee Republic for a cash consideration of 4.5p per share, subject simply to board recommendation and basic due diligence. However, Coffee Republic's board has refused to enter into any discussions regarding this proposal and has not allowed Caffe Nero access to verify standard issues, such as how much debt Coffee Republic has and if there is any outstanding litigation.
Caffe Nero's Board believes that it would have been in an excellent position, had an offer been made, to realise value from the Coffee Republic business as it shares a number of synergies. Caffe Nero was even willing to pay a premium for Coffee Republic for its strategic value. That said, the Board of Caffe Nero considers its proposed offer to be a full and fair price and it is unwilling to overpay.
As the third largest shareholder in Coffee Republic, Caffe Nero is unaware of how Coffee Republic intends to deliver shareholder value in the next few months above and beyond Caffe Nero's offer. Nonetheless, if Coffee Republic believes it can deliver greater value, the Caffe Nero Board is willing to be supportive and shall wait with interest to see if this can be achieved.
In light of the above and further to the announcement made by the Takeover Panel on 25 November 2002, the Board of Caffe Nero today announces that it will not proceed with an offer for Coffee Republic Plc ('Coffee Republic'). However, the Board of Caffe Nero reserves the right to make an offer in the event that the Board of Coffee Republic agrees to recommend an offer by Caffe Nero or a third party announces a firm intention to make an offer for Coffee Republic.
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