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2015-03-27

BONDUELLE: BONDUELLE :2009 redeemable equity warrants repurchase and buy out procedure

BONDUELLE

March 27, 2015

The Bonduelle Group repurchased a block of 2009 redeemable equity warrants
(BSAARs) and then initiated a buyout procedure (procédure de désintéressement
).

On March 27, 2015, Bonduelle SCA made a block purchase of redeemable equity
warrants from its main shareholder, Pierre et Benoit Bonduelle SAS and
initiated a buyout offer to the other warrant holders. The objective of this
transaction, made possible by the vast improvement of the Group's financial
profile and justified by the increase in its stock price, was to limit the
creation of equity and the dilution that could be caused if the redeemable
equity warrants issued in 2009 were exercised.

Reasons for the transaction

In July 2007, Bonduelle issued 150,000 bonds with redeemable warrants
(OBSAARs) for an amount of €150 million, with five warrants attached to each
bond, i.e. a total of 750,000 redeemable equity warrants. This issue allowed
Bonduelle to improve its financial structure by optimizing the cost of its
debt, with the option to increase its equity if new shares are issued when
the bonds are exercised.

In April 2009, Bonduelle issued 233,333 additional bonds with redeemable
warrants for an amount of €140 million, with three warrants attached to each
bond, i.e. a total of 699,999 redeemable equity warrants issued. The
financial benefits of the transaction were the same for Bonduelle as those
during the 2007 issue, i.e. the cost of debt was optimized with the option to
increase its equity.

At the time of this new issue, Bonduelle had also offered to exchange the
750,000 redeemable equity warrants from 2007 against the same number of
warrants with the same features as the warrants attached to the 2009 OBSAARs,
i.e. maturing on April 8, 2016 and with a strike price of €80. Following this
operation, there was a total of 1,449,999[1]redeemable equity warrants in
circulation.

A detailed description of the redeemable equity warrants (ISIN code:
FR0010734509) can be found in the prospectus, which the French financial
markets authority certified under No. 09-052 on March 6, 2009 and in the
information note with certification number 09-075 of April 2, 2009. This
prospectus and the information note are available free of charge on the
websites of the French financial markets authority (www.amf-france.org). On
March 28, 2013, the Bonduelle share was split into four, leading to a parity
adjustment of the redeemable equity warrants, which now carry entitlement to
four shares per warrant, at a strike price of €80.

On the date of the block purchase, all of the 2007 warrants had matured and
1,426,739 of the 2009 warrants remained in circulation, which could lead to
the creation of 5,706,956 new shares with a unit strike price of €20 each,
i.e. a potential dilution of 15.14% and an equity increase of €114,139,120.

In view of the continued improvement in its financial profile, making a
capital increase irrelevant, the Bonduelle Group decided to limit the
dilution which would be brought about by the exercising of the redeemable
equity warrants and the associated equity creation.

To do this, the company purchased, on that day, a block of 1,016,350
redeemable equity warrants over the counter from Pierre et Benoit Bonduelle
SAS at the unit price of €18, for a total of €18,294,300. This block
represented 71.24% of the warrants in circulation which could lead to the
creation of 4,065,400 new shares. The warrants purchased will be canceled in
accordance with the terms of the issue agreement and the law.
Following this purchase, 410,389 redeemable equity warrants remained in
circulation, i.e. 28.76% of the warrants that had been in circulation prior
to the purchase. To ensure the equal treatment of all holders, Bonduelle SCA
initiated a buyback procedure for the outstanding redeemable equity warrants
on the NYSE-Euronext regulated market in Paris. This procedure will take
place as outlined below.
After the sale of its block, Pierre et Benoit Bonduelle SAS held 170,962
redeemable equity warrants. In support of the aim of this transaction and
wanting to support the growth of the Bonduelle Group and its value creation,
Pierre et Benoit Bonduelle SAS will exercise, subsequently and subject to
market conditions, the balance of the redeemable equity warrants remaining in
its possession after sale of the block, by reinvesting the net proceeds of
the sale of the warrants.

As of February 28, 2015, Pierre et Benoit Bonduelle SAS has held, directly and
indirectly, 27.66% of the share capital and 37.89% of the voting rights which
may be exercised in a Bonduelle SCA Shareholders' Meeting. In the event that
the redeemable equity warrants, are exercised, these percentage holdings
would become 29.80% and 38.79% respectively.

Should the exercise of the redeemable equity warrants lead to a situation in
which the combined holding of Pierre et Benoit Bonduelle SAS and the Concert
results in a mandatory public takeover bid, a request for a waiver to the
obligation to file a mandatory public takeover bid will be made to the AMF.
Details of the buyback procedure
Bonduelle irrevocably commits to buy back the redeemable equity warrants
during a period of 10 trading days at a price identical to the price paid for
the block purchase, i.e. €18 per warrant. During this period, listing of the
redeemable equity warrants will be suspended.
The procedure applies to all redeemable equity warrants remaining in
circulation not held by Pierre et Benoit Bonduelle SAS following the block
purchase, i.e. 239,427 warrants.

Any holder wanting to sell all or some of their redeemable equity warrants
under the procedure must send their sale instruction to their broker at the
unit price of €18.

The buyback offer will be open to warrant holders from March 30, 2015 to April
14, 2015 inclusive.

The buyout transactions will be managed by Société Générale Securities
Services.

At the end of the buyback period, the warrants will be purchased at the unit
price of €18 per warrant.

Settlement and delivery of the repurchased warrants will take place on April
21, 2015.
At the end of the buyback period, Bonduelle SCA will issue a financial press
release to announce the overall amount of warrants purchased.
The warrants purchased will be canceled in accordance with the terms of the
issue agreement and the law.

Furthermore, the company holds 1,590,564 treasury shares allocated to external
growth operations. After the outstanding redeemable equity warrants on the
market have been repurchased, Bonduelle SCA will reallocate part of its
treasury shares to hedge the redeemable equity warrants to deliver the
existing shares in the event that the warrants are exercised. By reallocating
its treasury shares, the company will limit the issue of new shares when the
warrants remaining in circulation are exercised, and will have thus limited
any dilution caused by the exercising of the warrants.

Impact of the operation on Bonduelle's financial statements

According to IFRS, derivatives of treasury shares are analyzed as equity
instruments when their exercise involves exchanging a fixed amount of cash
against a fixed number of shares. This is the case with the redeemable equity
warrants, as each warrant carries entitlement to four Bonduelle shares in
exchange for payment of €80.

So, as they are equity instruments, the buyout of the redeemable equity
warrants in the consolidated financial statements will not have an impact on
the company's income statement and will materialize by the following entries:

1 The buyback of the block of warrants from Pierre et Benoit Bonduelle SAS is
reflected in a cash outlay and an equity reduction of the same amount;
2 At the start of the buyback procedure, a debt equal to the number of
redeemable equity warrants remaining in circulation multiplied by the
buyback price of the block will be recorded offset by an equivalent equity
reduction. This debt has a fixed value (the price and the quantities are
fixed) and as such will not be revalued over the 10 days of the
transaction. Finally, this debt will be cleared by the offsetting cash
outflow;
3 After the buyback procedure, the debt initially recorded will be
reclassified under equity at the value of the warrants which have not been
contributed.

In the corporate financial statements, the redeemable equity warrants
repurchased in this way with a view to their cancellation will also be
recorded as a deduction from the company's equity, without any impact on the
income statement.

Therefore, in the consolidated financial statements of the Bonduelle Group, as
an equity instrument, the impact of this transaction on the redeemable equity
warrants will be recorded against equity.

In the individual financial statements of Bonduelle SCA, this transaction will
also impact on equity, with the exception of warrants exercised delivered in
treasury shares, which would impact on the income statement.

The planned accounting systems were submitted to the Group's statutory
auditors, who did not make any observations on it.

Independent expert report on the corporate interest and fairness of the
transaction

An independent expert, Associés en Finance, prepared a report on the
transaction, to confirm that it is in the company's corporate interest, and
that it is fair, as concerns both the shareholders and the warrant holders.
The report also certified that the buyback price proposed is consistent with
the valuations obtained using the commonly-used tools to determine the price
of optional instruments.

The conclusions were as follows:

"The main aim of the transaction for Bonduelle is to limit the potential
creation of equity resulting from the exercising of redeemable equity
warrants, which is no longer necessary in the Group's current structure. [.]

The equity raised from the main shareholder exercising the remaining
redeemable equity warrants would offset the equity impact caused by the
buyback of the redeemable equity warrants. In addition, this transaction
would not entail, according to the calculations resulting from the Trival
model used by Associés en Finance, any major change in Bonduelle's level of
financial risk.

The transaction is consistent with the company's corporate interest.

The buyback procedure gives managers and the public a liquidity opportunity on
a security on which market trading is very low.

The redeemable equity warrants were valued based on the average weighted
prices of the share volumes over 20 trading days ending on March 25, 2015,
i.e. €24.47. It was also based on the low point of €23.10 and the high point
of €24.91 of the weighted prices over the period.

On March 25, 2015, the value of the Bonduelle redeemable equity warrants was
between €13.58...

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