| Fri 13 Apr 2007, 10:39 | | Spanjaard -- acquisition and withdrawal of caution |
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PPE SPA
PPE SPA
PPE / SPA - Purple Capital / Spanjaard - Acquisition And Withdrawal Of
Cautionary Announcement
Purple Capital Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/013637/06)
Share code: PPE ISIN: ZAE000071411
("Purple Capital")
Spanjaard Limited
(Incorporated in the Republic of South Africa)
(Registration number 1960/004393/06)
Share code: SPA ISIN: ZAE000006938
("Spanjaard")
ACQUISITION OF A SIGNIFICANT EQUITY STAKE IN SPANJAARD BY PURPLE CAPITAL AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT BY SPANJAARD
1. Introduction
Spanjaard manufactures and formulates an extensive range of specialised
lubricants and allied chemical products for the automotive, industrial, marine,
mining and consumer markets, both in Southern Africa as well as internationally.
In addition, a metal powder operation, located in separate premises,
manufactures various raw materials supplied directly to manufacturers of
friction materials such as brake pads, with the bulk of this production being
exported.
Purple Capital is a financial services and investment group which will make
equity investments in established companies where it expects its input of
merchant banking expertise will make a significant difference to the funding,
growth prospects and ultimate shareholder value of the company.
Purple Capital and Spanjaard are accordingly pleased to announce that they
have concluded an agreement in terms of which Purple Capital will subscribe for
2 442 850 new ordinary shares in Spanjaard at a subscription price of 260 cents
per share, being an aggregate amount of R6,35 million for an effective equity
stake of 29,99% post subscription for the new shares ("the specific issue"). The
subscription price for the specific issue is the weighted average price of
Spanjaard shares over the 30 days prior to determination of the subscription
Price
2. Background to and rationale for the transaction
The Spanjaard subscription is an investment banking opportunity for Purple
Capital. Spanjaard is a company of long standing with well established clients,
products and geographical reach. Together with the existing board and management
of Spanjaard, Purple Capital believes there is an opportunity to unlock value
through acquisitions in the industry, improved cost structures and operating
efficiencies.
From the Spanjaard point of view the association with Purple Capital and its
major shareholders is a catalyst and a vital enabling factor in successfully
enabling Spanjaard to increase its presence in international markets.
The synergy flowing from the association with Purple Capital will enable
Spanjaard to start benefiting fully from its listing in facilitating the growth
for which Spanjaard feels it is now ready.
The cash received by Spanjaard will be used to fund future acquisitions and
other expansion opportunities.
Mark Barnes, Executive Chairman of Purple Capital, will be appointed as a
non-executive director to the Board of Spanjaard.
3. Financial effects of the specific issue on Spanjaard
The table below sets out the financial effects on Spanjaard of the specific
issue based on the unaudited financial statements of Spanjaard for the six
months ended 31 August 2006. These financial effects are the responsibility of
the directors of Spanjaard, are prepared for illustrative purposes only and,
because of their nature, may not fairly present the financial position, changes
in equity, results of operations or cash flows of Spanjaard after the specific
issue.
Before the After the
specific specific
issue issue Change
Note (cents) (cents) (%)
Earnings per share 1 10.77 7.54 (30.00)
Headline earnings per share 1 10.11 7.07 (30.00)
Tangible net asset value per share 2 248.74 252.10 1.35
Net asset value per share 2 248.74 252.10 1.35
Number of shares in issue (000`s) 5 700 8 143 42.85
Notes:
1. On the assumption that the specific issue was effective throughout the six
months ended on 31 August 2006 and that the subscription monies had been
invested in an interest bearing account earning 7% before tax for 6 months;
2. On the assumption that the specific issue was effective on 31 August 2006.
4. Terms and conditions
The transaction is subject to the following conditions precedent:
* Confirmatory due diligence;
* Such regulatory, shareholder and other approvals and documentation that
are required for a transaction of this nature. In this regard, a circular to
shareholders is being prepared and will be dispatched to shareholders in due
course;
* Robert Spanjaard, Executive Chairman of Spanjaard, has undertaken to
vote all shares under his control (being 76,60% before the specific issue) in
favour of the transaction.
5. Withdrawal of cautionary announcement by Spanjaard
The cautionary announcement issued by Spanjaard on 10 April 2007 is hereby
withdrawn.
Johannesburg
13 April 2007
Sponsor to Purple Capital
Bridge Capital
Sponsor to Spanjaard
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Date: 13/04/2007 10:19:41 Produced by the JSE SENS Department.
