EMBLAZE LTD: Proposed acquisition of a controlling stake in WFI

Emblaze Ltd (LSE:BLZ)                              
                     ("Emblaze" or "the Company")                           


              Proposed acquisition of a controlling stake in WFI               

Tel Aviv, Israel, 3 March, 2014

The Company announces that on 2 March 2014, it signed an agreement (the "
Agreement") to acquire a controlling stake in Willi-Food Investments Ltd. ("WFI
"), a company listed on the Tel Aviv Stock Exchange, subject to the
satisfaction of the condition precedent and the additional terms referred to
below (the "Transaction"). The Agreement was signed with Zwi Williger ("ZW")
and Joseph Williger ("JW" and, together with ZW, the "Sellers") to acquire up
to their entire interests in WFI. WFI in turn, owns approximately 58% of G
Willi-Food International Ltd. ("WFINT", together with WFI, "Willi-Food"), a
company listed on NASDAQ. WFINT is the principal operating entity within the
WFI group of companies. The Agreement also governs the ongoing relationship of
the Company with the Sellers both before and after completion of the
Transaction.

The Transaction

The Transaction is structured as follows:

The Transaction is subject to the receipt of Israeli anti-trust authorities
approval. The Company and the Sellers will endeavour to obtain the approval
following signing of the Agreement (the "Condition Precedent").

Subject to fulfilment of the Condition Precedent:

 a. The Company will acquire shares carrying 44.99% of the voting rights in
    WFI, from the Sellers or companies controlled by the Sellers.
     b. The Company will then, within seven business days of fulfilment of the
    Condition Precedent, publish a special tender offer (the "Special Tender
    Offer") addressed to all shareholders of WFI pursuant to Israeli companies
    law in order to acquire shares carrying 5% of the voting rights in WFI. The
    Sellers have undertaken to participate in the Special Tender Offer in
    relation to their remaining shares in WFI not sold by them pursuant to (a)
    above (the "Remaining Shares").
     c. Subject to the successful completion of the Special Tender Offer, the
    Company will make a further purchase from the Sellers of their remaining
    shares in WFI, such that the Sellers will have sold, in aggregate,
    approximately 58% of the shares of WFI (or approximately 55% on a fully
    diluted basis), comprising their entire holding of shares in WFI (and which
    includes any such shares sold by them pursuant to ‎(a) and ‎(b) above).
     d. If the Company fails to complete the Special Tender Offer, the Sellers may
    elect, within seven business days of such date on which the Special Tender
    Offer lapsed to rescind the Agreement unless the Company elects, within a
    nine business day period starting from the date on which the Special Tender
    Offer lapsed, to purchase from the Sellers their Remaining Shares (the "
    Call Option") (in which case the Agreement will not be rescinded). If the
    Company elects to purchase the Remaining Shares in these circumstances,
    then pursuant to Israeli companies law, any shares in WFI held by the
    Company or any person connected with it for the purposes of the Israeli
    companies law, which would give the Company or such persons an interest in
    more than 44.99% of the voting rights in WFI will be treated as "dormant"
    and would not entitle them to exercise or enjoy any voting or economic
    rights for as long as the Company and such persons continue to hold, in
    aggregate, more than 44.99% of the voting rights in WFI or if and when the
    holding of such voting rights would no longer cause a breach of Israeli
    companies law with regard to any requirement on the Company and such
    persons, to make a Special Tender Offer.


Alternatively, if the Company fails to complete the Special Tender Offer and
the Sellers have not elected to rescind the Agreement within the seven business
day period referred to above and provided that the Company has not exercised
the Call Option the Company will grant the Sellers a put option (the "WFI Put
Option") exercisable at any time during a period of five years from completion
of the Transaction, to sell all or some of the Remaining Shares to the Company.
Exercise of the WFI Put Option by the Sellers will be subject to such exercise
not breaching Israeli companies law with regard to any requirement on the
Company to make a Special Tender Offer. The WFI Put Option relates to the
number of Remaining Shares less any shares of WFI sold by the Sellers between
the date of completion of the Transaction and the exercise of the WFI Put
Option. During the WFI Put Option exercise period, the Company will hold the
benefit of a power of attorney which would enable it to procure the Sellers to
sell their Remaining Shares to a third party, subject to compliance with
applicable laws. The power of attorney may be cancelled by the Sellers at any
time during that period, although such cancellation would lead to the immediate
cancellation of the WFI Put Option in relation to such Remaining Shares in
relation to which the power of attorney was cancelled. 
 e. The Sellers also hold shares and employee options in relation to 


    approximately 7% of the shares of WFINT on a fully diluted basis (the "
    WFINT Put Option Shares"). The Company has granted the Sellers a put option
    to sell all or some of such shares as vested from time to time (the "WFINT
    Put Option") exercisable for a period of four years (commencing on the
    first anniversary of completion of the Transaction) at a price of US$12 per
    share. The WFINT Put Option relates to the WFINT Put Option Shares less any
    shares sold by the Sellers between the date of completion of the
    Transaction and exercise of the WFINT Put Option. During the WFINT Put
    Option exercise period, the Company will hold the benefit of a power of
    attorney which would enable it to procure the Sellers to sell their WFINT
    shares to a third party at a price per share not below US$12, subject to
    compliance with applicable laws. The power of attorney may be cancelled by
    the Sellers at any time during that period, although such cancellation
    would lead to the immediate cancellation of the WFINT Put Option in respect
    of such WFINT Put Option shares in relation to which the power of attorney
    was cancelled. As from completion of the Transaction and until the exercise
    or expiry of the WFINT Put Option, the Sellers will each grant the Company
    an irrevocable proxy with respect to their holdings in WFINT, so as to
    allow the Company to vote such shares at general meetings of WFINT.
     f. ZW and JW will continue to be engaged by WFINT and will serve as chairman
    of the board (in respect of ZW) and as president (in respect of JW), or as
    joint chief executive officers of Willi-Food for an additional period,
    commencing upon termination of ZW and JW's current service agreements with
    WFINT (September 2014), of between 18 months and three years therefrom.
    Subject to further agreement between the parties and to applicable law, ZW
    and JW may continue their respective engagement also following such period.
     g. Each of the Sellers will be prohibited from competing against Willi-Food in
    any material way, subject to certain agreed exceptions described below, for
    an additional period commencing on the termination of his respective
    engagement with WFINT and terminating up to six years from completion of
    the Transaction. In consideration of such non-compete undertakings, each of
    the Sellers will be entitled to an additional annual payment of


NIS1,500,000 (approximately £250,000) per year following termination of 
his 


    respective engagement, to be paid by the Company, or, subject to applicable
    law. Willi-Food.


Under the Agreement, each of the Sellers shall have the rights to be released
from his engagement, in which case (except in the case of (viii) below) the
non-compete undertaking shall cease to apply in relation to him, where: (i)
Willi-Food's accounts will include a `going concern' provision as a result of
any activity which is not within the Willi-Food's business operations in the
field of import, export, marketing and distribution of food products (the "
Current Business Activity"); (ii) the board of directors of WFI, WFINT or any
other organ of the Willi-Food group materially disrupts ZW or JW's ability to
operate in the Current Business Activity as part of said engagement; (iii) ZW
or JW are not reappointed as directors in WFI or WFINT during said engagement
period; (iv) WFI or the Company, as the case may be, have not voted, as
shareholders of WFINT, in favour or extending ZW and JW's service contracts;
(v) ZW or JW's engagements were terminated for unreasonable reasons by WFI or
WFINT; (vi) sale of control in the Current Business Activity, WFI or WFINT to a
third party; (vii) introduction of a third party as a partner in the Current
Business Activity or in the control in WFI or WFINT unless previously approved
by the Sellers, such approval not to be unreasonably withheld; or (viii)
incapacity of ZW or JW. 
 h. The Transaction is expected to be completed soon after the successful 


    completion of the Special Tender Offer or, alternatively, following its
    lapse. This is expected to occur during Q2, 2014.
    Background on Willi-Food

WFI, through its operating subsidiary WFINT, is engaged, directly and through
subsidiaries, in the development, import, export, marketing and distribution of
a wide variety of over 600 food products world-wide. Most of WFINT's sales are
made in Israel with widespread demand in the Israeli marketplace, as well as
products which cater to more select groups. WFINT purchases food products from
over 150 suppliers located in Israel and throughout the world, including from
the Far East (China, India, the Philippines and Thailand), Ethiopia, Eastern
Europe (Poland, Lithuania, Bulgaria and Latvia), South America (Ecuador and
Costa Rica), the United States, Canada, Western and Central Europe (the
Netherlands, Belgium, Monaco, Germany, Sweden, Switzerland, Denmark, and
France) and Southern Europe (Spain, Portugal, Italy, Turkey, Greece). WFINT's
products are marketed and sold to approximately 1,500 customers in Israel and
around the world (for example, to the United States, the United Kingdom and
France), including to supermarket chains, wholesalers and institutional
consumers, but its current operations outside Israel are small in comparison to
its Israeli operations.

As at 30 September 2013, Willi-Food's principal consolidated financial figures
are as follows:

Cash and cash           NIS301,242,000         
equivalent                                     


                                           
Total assets            NIS476,379,000          
                                           
Equity                  NIS257,081,000          
                                           
Operational profit      NIS24,244,000           
                                           
Net profit              NIS43,107,000           
Consideration 
The aggregate consideration for the shares in WFI to be acquired from the
Sellers (including the Remaining Shares and whether or not such shares are
acquired pursuant to the WFI Put Option or not) is approximately NIS268,000,000
(approximately £45,800,000). 
The consideration to be offered to WFI's shareholders as part of the Special
Tender Offer represents the same price per share as paid to the Sellers for
their shares in WFI, and is expected to be, in aggregate, approximately
NIS23,000,000 (approximately £3,900,000). 
Assuming, therefore, that all the shareholders of WFI other than the Seller
participate in the Special Tender Offer in relation to their entire
shareholdings, then the Company expects to acquire up to 61.80% (though the
actual number may be lower, depending on the breakdown of shareholder
acceptances under the Special Tender Offer) of the shares in WFI for an
aggregate consideration of approximately up to NIS285,500,000 (approximately £
48,804,000). 
Background on the Sellers 
ZW, age 58, has served as the active chairman of WFINT since January 1997. From
January 1997 until September 2011 he also served as chief operating officer of
WFINT and from the inception of WFINT in January 1994 until January 1997, as a
director and manager of marketing development of WFINT. ZW has also served as a
director of WFINT's subsidiaries, W.F.D. (Import, Marketing and Trading) Ltd.
("W.F.D.") and Gold Frost Ltd. ("Gold Frost") since November 1996 and April
2001, respectively. In addition, ZW has served as a director of WFI since
December 1992 and as a director of Titanic Food Ltd. ("Titanic"), a company he
owns together with JW, since April 1990. ZW attended Fresno University in
California. ZW is the brother of JW, president and a director of WFINT. 
JW, age 56, has served as president of WFINT since September 2011 and a
director of WFINT since WFINT's inception. Since WFINT's inception until
September 2011 he served as the chief executive officer (or general manager) of
WFINT. He has also served as a chairman of WFINT's subsidiaries, W.F.D. and
Gold Frost, since November 1996 and April 2001, respectively. JW has also
served as a director and as chairman of the board of WFI, the controlling
shareholder of WFINT, since December 1992 and June 1994, respectively. JW has
served as director of Titanic since April 1990. JW attended Bar-Ilan University
in Israel and Northridge University in Los Angeles. JW is the brother of ZW,
chairman of the board of directors of WFINT. 
Commercial rational and the expected effect of the Transaction on the Company 
Following completion of the Transaction, the Company will exercise control over
WFI by means of (i) its ability to exercise control over between 44.99% and
61.80% of the votes exercisable at shareholder meetings of WFI; and (ii) its
right to appoint the majority of board members of WFI and WFINT at completion
of the Transaction. 
The Company intends to be actively involved in the management of Willi-Food
through, amongst other things, the appointment of directors to the boards of
WFI and WFINT and through involvement in the nomination of Willi-Food's senior
management. Through such involvement, the Company hopes to be able to improve
the results and profitability of Willi-Food, thereby creating value to the
Company and its shareholders. Among other things, the Company is considering
various options for the expansion of Willi-Food's operations, both in Israel
and internationally. 
The board considers that the acquisition of a controlling interest in WFI
represents an attractive opportunity for the Company and its shareholders as a
whole and is aligned with the intentions of the Company's management which are
aimed at maximizing value for the Company's shareholders. 
No obligation to seek shareholder approval 
As set out in the Company's circular of October 2013 in relation to its move to
a Standard Listing, a standard listed company is not required to comply with
the provisions of Listing Rule 10 which sets out requirements for shareholders
to be notified of certain transactions and to have the opportunity to vote on
proposed significant transactions. As such, the Company is able to undertake
significant transactions (including the Transaction) without requiring
shareholder approval. 
Share suspension and re-admission 
Given the Transaction by the Company would constitute a reverse takeover under
the Listing Rules and after consultation with the UK Listing Authority, the
Company has requested that trading in its shares be temporarily suspended with
effect from 7.30 a.m. today pending either (i) the publication of a prospectus
by Company in connection with the requirement on it to re-apply for the listing
of its shares following completion of the Transaction; or (ii) the termination
of the Agreement in accordance with their respective terms. 
Until the Company has completed the formal application process and satisfied
the UKLA as to its eligibility, there is no certainty that the UKLA will
approve the re-listing of the Company's shares to trading on the Standard List.
In such circumstances, the Company would cease to be listed although the board
would actively explore the possibility of moving to AIM or an alternative
listing or admission venue. 
Furthermore, there can be no guarantee that the completion of the Transaction
will occur before the date on which the Company is able to publish a prospectus
in connection to its re-application for the listing of its shares. In this
regard, the UKLA have confirmed that trading in the Company's shares will
continue to be suspended pending publication of a prospectus by Company in
connection with the application for relisting of its shares following
completion of the Transaction. 
Enquiries: 
Eyal Merdler, CFO: Eyal.Merdler@emblaze.com 
The Emblaze Group has been traded on the London Stock Exchange (LSE: BLZ) since
1996. 
www.emblaze.com 
1 03.03.14 
END 
-0- Mar/03/2014 07:00 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.