BBQZ Barbeques Galore Limited ADS (MM)

Barbeques Galore Limited (NASDAQ:BBQZ) today announced it has signed an agreement for a proposed transaction with Ironbridge Capital, a leading Australian private equity firm, to acquire all the outstanding shares and options in the company in a cash transaction valued at approximately US$45 million. The agreement provides that the shareholders of Barbeques Galore will be offered $13.00 per share cash in Australian dollars, equal to $9.91 per share in U.S. dollars, based on present currency exchange rates, and representing a 92% premium over the August 9, 2005 closing stock price of US$5.15 per share. The option holders will receive an equivalent amount less their option exercise price. Barbeques Galore has 4,246,091 shares and 494,290 options outstanding. The proposed transaction has the unanimous support of the Barbeques Galore Limited Board of Directors in the absence of an offer on more favorable terms, and subject to independent experts finding that the transaction is in the best interests of shareholders The proposed transaction is subject to the consent of a simple majority in the number of shareholders voting in person or by proxy representing 75% in value of the shares voted. It is also subject to the approval of the Federal Court of Australia, customary regulatory approvals in the United States and Australia and the fulfillment of certain financial and other conditions. Barbeques Galore confirmed that it has appointed independent experts in both Australia and the United States who will provide fairness opinions. In support of the proposed transaction, three of the executive directors, Sam Linz, Robert Gavshon and Sydney Selati, have, out of their own shareholdings, granted Ironbridge an option at A$13 per share to acquire 19.99% of the shares in the company. Barbeques Galore has also signed a break-fee arrangement with Ironbridge Capital as part of the agreement. The company said it anticipates mailing details of the transaction, including reports from the independent experts and a proxy statement to shareholders in early September, and the company expects to hold a special shareholders' meeting approximately four weeks later, with completion planned for mid-October. Upon completion of the proposed transaction, Barbeques Galore will seek to delist itself from NASDAQ. The current Executive Chairman Sam Linz, Executive Deputy Chairman Robert Gavshon and Sydney Selati, Chairman, Barbeques Galore U.S.A., will cease employment but make themselves available to the company if required . "The Board believes this transaction provides a good return to our shareholders and also benefits the company and its employees," Linz said. "Barbeques Galore has become a household name in Australia and has significant expansion potential in the United States." Ironbridge Capital is based in Sydney, Australia and is a leading independent Australian private equity manager with approximately A$450 million currently under management. The firm typically invests A$25 to A$75 million in each transaction, focusing on businesses with market-leading positions and strong growth potential. Barbeques Galore is the leading chain of specialty retail stores devoted to sales of barbecues, backyard accents, fireside products and related accessories. The company now owns and operates 68 stores in the U.S. and 44 stores in Australia. In addition, it has seven franchised stores in the U.S. and 48 licensed stores in Australia. Through its U.S. e-commerce Web site, www.bbqgalore.com, the company sells an extensive line of barbecue and fireside products and related accessories. This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Specifically, without limitation, forward looking statements include completion of the proposed transaction under which Barbeques Galore will be acquired, the timing of such transaction, and the proposed transaction price. Forward looking statements are based on management's current expectations and beliefs, and are subject to risks and uncertainties. Accordingly, actual results may differ materially from the forward-looking statements contained herein. Risks that relate to these forward looking statements include the risk that the transaction will not receive the required shareholder approval and the risk that the transaction will otherwise not be completed. Further detailed information about risk factors that may impact our business is set forth in our periodic filings with the U.S. Securities and Exchange Commission. Barbeques Galore expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.