The board of directors of So Natural Foods yesterday (3 July) issued a target statement calling on shareholders to reject Arrovest's bid to takeover the company to the Australian Stock Exchange.

The offer, So Natural's board said, is "opportunistic" in light of the company's improving financial performance "and aims to acquire So Natural shares at a price significantly below the value range ascribed by the independent expert".

The Perich family-owned investment company Arrovest submitted an offer of A$0.50 per So Natural share on 9 June. However Summer Hall Associates, the independent expert cited in So Natural's target statement, valued shares at between A$0.58 and A$0.67 per share.

"It is sometimes the case that a takeover offer that is not fair might nevertheless be reasonable and shareholders would be justified in accepting the offer," Summer Hall Associates said. "In Summer Hall Associates' opinion, these circumstances do not apply in the case of the Perich group Offer."

Summer Hill said that So Natural had achieved "substantial profit growth" for the year ending 30 June 2006. So Natural has forecast an annual net profit of $A1.17m, compared to a net profit of A$58,000 for the comparable period of the previous year. Earnings before interest tax and amortisation are expected to reach A$2.62m for the year, compared to A$1.08m previously.