Golden Circle, a 61 year-old Australian company renowned for their canned fruit and vegetables, fruit juice and jam, appears likely to agree to a takeover by Heinz after their Board unanimously recommended the proposal.

Golden Circle Limited and H.J. Heinz Company Australia Limited today announced they entered into an Implementation Agreement, whereby it is proposed that Heinz will acquire all of the Golden Circle shares on issue for A$1.65 cash per share, valuing Golden Circle at approximately $288 million.

The $1.65 per share offer represents a strong premium on their current National Stock Exchange price of 40 cents (as of October 3).

Golden Circle earlier this year listed on the National Stock Exchange after refusing a $1 a share bid from Coca-Cola Amatil last year when they were operating as a co-operative. They announced a $3.5 million net profit in the 07/08 Fiscal Year, their first annual profit in a number of years.

“The Board of Golden Circle believes that the Heinz Proposal represents a compelling value proposition and is in the best interests of Golden Circle Shareholders. In the absence of a Superior Proposal, the Board of Golden Circle unanimously recommends that Golden Circle Shareholders vote in favour of the Heinz Proposal at the Scheme Meeting,” Golden Circle Chairman, Mr. Phillip Cave, said. “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.”

“The Board also considers the certainty of timing and payment of the Heinz Proposal as attractive for all Golden Circle Shareholders, particularly during a period of difficult economic conditions.”

Golden Circle’s largest Shareholder, Anchorage – which has a 35% shareholding, also outlined their support for the proposal. “The Heinz Proposal is very attractive and we intend to vote in favour of the Heinz Proposal in the absence of a Superior Proposal,” they advised.

Golden Circle Chief Executive Officer, Craig Mills, expects that the global manufacturing giant will be able to take Golden Circle to the next level. “Heinz is a leading global player in the food industry. It is considered an innovator with considerable marketing know-how,” he noted. “The acquisition provides the opportunity for a complementary product range offering a wide variety of everyday consumer food and beverages under iconic brands.”

“Like Heinz, Golden Circle holds a longstanding Australian heritage of providing high quality, affordable food and beverages to Australian families. We look forward to continuing this heritage and growing the Golden Circle business,” Heinz Managing Director, Mr. Peter Widdows, added. “We are acutely aware of Golden Circle’s origins and the importance of Golden Circle to the farming community. Our desire is to maintain contracts between growers and Golden Circle, which would benefit from potential increases in volume over time as the combined sales and marketing strength of a combined Golden Circle and Heinz is realised. Golden Circle’s workforce also forms an integral part of Golden Circle’s success and will benefit from opportunities that will become available as part of the Heinz group.”

The acquisition is to be implemented by way of a Scheme of Arrangement under which Golden Circle Shareholders will be asked to vote on the Heinz Proposal at a Scheme Meeting – expected to be held in early to mid December 2008.

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