| Thu 3 May 2007, 7:57 | | ACP / ATS - Acucap /Atlas - Joint Announcement and |
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ACP ATS
ACP ATS
ACP / ATS - Acucap /Atlas - Joint Announcement and Withdrawal of Cautionary
Acucap Properties Limited
(Registration No. 2001/021725/06)
Share Code: ACP & ISIN Code: ZAE000037651
("Acucap")
Atlas Properties Limited
(Registration No. 1988/000742/06)
Share Code: ATS & ISIN Code: ZAE00008975
("Atlas")
JOINT ANNOUNCEMENT OF A FIRM INTENTION BY ACUCAP TO MAKE AN OFFER TO
ACQUIRE ALL THE LINKED UNITS OF ATLAS NOT ALREADY OWNED BY ACUCAP AND
WITHDRAWAL OF CAUTIONARY
1. INTRODUCTION
Further to the cautionary announcements published by Acucap and Atlas on 16
March 2007, unitholders of Acucap and Atlas are advised that Acucap has
submitted to the board of directors of Atlas a notice of Acucap`s firm
intention to make an offer (the "offer") to acquire 100% of the Atlas
linked units not already owned by Acucap ("scheme units"), in terms of a
scheme of arrangement (the "scheme") in terms of section 311 of the
Companies Act, 61 of 1973 (as amended). Acucap currently holds 22 320 644
linked units in Atlas, comprising 34.99% of the total issued units in
Atlas.
2. TERMS OF THE SCHEME
The principal terms and conditions of the scheme will be as follows:
2.1. The scheme consideration
2.2. The consideration payable by Acucap for the scheme units will comprise
0.635 Acucap linked units per scheme unit (the "consideration units").
2.3. Subject to the limitation referred to below, holders of scheme units
("scheme members") will have the ability to elect to receive R19,90 in
cash per scheme unit (the "cash consideration"). Acucap will fund all
or some of the cash consideration by way of a vendor consideration
placement.
2.4. In the absence of an election, scheme members will be deemed to have
elected to have received the consideration units as opposed to the
cash consideration.
2.5. The aggregate cash consideration will be limited to R330 055 652,
being 40% of the total consideration payable in terms of the scheme.
Accordingly, scheme members who elect to receive the cash
consideration in respect of more than 40% of their scheme units will
only be accommodated if, and to the extent that, other scheme members
elect to receive consideration units in respect of more than 60% of
their scheme units. To the extent that scheme members cannot be
accommodated, their pro rata portion of the scheme consideration will
be settled by way of consideration units.
2.6. The unit consideration represents a 6,4% premium to the market price
of Atlas units, based on the 30-day volume weighted average prices of
Acucap and Atlas linked units to 30 April 2007, being the last
practicable date prior to finalisation of this announcement and a
10,2% premium to the market price of Atlas units, based on the 30-day
volume weighted average prices of Acucap and Atlas linked units to 15
March 2007, being the day immediately prior to release of the
cautionary announcement.
2.7. The offer is to be made by Acucap on the basis that:
2.7.1. immediately prior to the date on which the scheme is implemented
(the "operative date"), the entire issued capital of Atlas will
comprise 63 784 922 linked units, each linked unit comprising one
ordinary share with a par value of 5 cents and one debenture of
R4,95;
2.7.2. the consideration units will rank for distributions in Acucap
with effect from the first day of the month in which the
operative date occurs (the "effective date");
2.7.3. Acucap and Atlas will pay special distributions (the "special
distributions") for the period commencing on 1 April 2007 and
ending on the last day of the month immediately preceding the
effective date;
2.7.4. the Atlas special distribution shall be payable to Atlas
unitholders registered as such on the record date for
qualification as a scheme member;
2.7.5. the Acucap special distribution shall be payable to Acucap
unitholders registered as such on a date to be announced, which
date shall be a date prior to the operative date of the scheme;
2.7.6. declaration of the special distributions will ensure that both
the Acucap and Atlas linked units will be ex-distribution with
effect from the effective date;
2.7.7. no distributions, other than:
- the final distribution payable by Acucap for the
distribution period ended 31 March 2007;
- the interim distribution payable by Atlas for the
distribution period ended 31 March 2007; and
- the special distributions,
shall be declared between the date of the notice of Acucap`s
firm intention to make the offer and the operative date.
2.8. Conditions to the scheme
The scheme will be subject to (and will be implemented as soon as
reasonably practicable after) the fulfilment (or where applicable
and permissible in law, waiver) of the following conditions
precedent by 30 September 2007:
2.8.1. the securing of the requisite approval of Acucap linked
unitholders for the acquisition by Acucap of the scheme units;
2.8.2. the securing of the requisite approvals of scheme members for the
scheme;
2.8.3. receipt of all requisite regulatory approvals (including the
approval of the Competition Authorities, the JSE Limited ("JSE")
and the Securities Regulation Panel ("SRP")); and
2.8.4. the sanctioning of the scheme by the High Court of South Africa
and the registration of a certified copy of the Order of Court
with the Registrar of Companies.
3. DE-LISTING OF ATLAS
Subject to the scheme being implemented, Atlas will be delisted from the
JSE.
4. CONDITIONAL UNDERTAKINGS TO SUPPORT THE SCHEME
4.1. Atlas linked unitholders (excluding Acucap) holding approximately:
4.1.1. 44,96% of the scheme units have provided irrevocable
undertakings;
4.1.2. 19,19% of the scheme units have provided letters of support,
to vote in favour of the scheme, totalling 64,15% of the scheme units.
4.2 Acucap linked unitholders holding approximately:
4.2.1. 31,02% of the Acucap linked units in issue have provided
irrevocable undertakings;
4.2.2. 24,96% of the Acucap linked units in issue have provided letters
of support,
to vote in favour of the acquisition by Acucap of 100% of the scheme units
pursuant to the scheme, totalling 55,98% of the Acucap linked units in
issue.
The irrevocable undertakings provided in 4.1.1. and 4.2.1. are subject to
certain events or actions having taken place by certain dates.
5. CONFIRMATION OF FINANCIAL RESOURCES
Nedbank Limited has confirmed to the SRP that sufficient resources are
available to Acucap to satisfy the maximum cash consideration of R330 055
652 payable in terms of the scheme.
6. OPINION AND RECOMMENDATIONS
The Atlas board has formed a separate independent sub-committee to consider
the terms of the offer. The sub-committee will appoint independent advisors
to assist in its task and provide it with the external advice required in
terms of the SRP Code. The opinions and recommendations of the independent
advisors, independent sub-committee and the board will be set out in the
circular referred to below.
7. ATLAS FINANCIAL EFFECTS
The pro forma financial effects of the scheme on an Atlas unitholder are
presented below for illustrative purposes only and because of their pro
forma nature may not give a fair reflection of all scheme members`
financial effects.
The financial effects have been prepared on two bases - the first, on the
assumption that all of the Atlas unitholders elect to receive the unit
consideration and the second, on the assumption that 40% of the aggregate
consideration is settled in cash.
The unaudited pro forma financial effects are the responsibility of the
directors of Atlas and the directors of Acucap accept no responsibility in
relation thereto.
(i) 100% Consideration units
(Cents) Before After (1) % Change
Attributable market value
- Market price (2) 1915 2096 9.4%
- 30-day weighted average price (3) 1838 1954 6.4%
- Market price (4) 1780 1969 10.6%
- 30-day weighted average price (5) 1736 1913 10.2%
Notes:
The financial effects set out above have been based on the following
assumptions:
1 Atlas linked unitholders elect to receive consideration units only and
no cash consideration;
2 the closing prices of Acucap and Atlas linked units on 30 April 2007
have been utilised;
3 the 30-day volume weighted average prices of Acucap and Atlas linked
units to 30 April 2007 have been utilised;
4 the closing prices of Acucap and Atlas linked units on 15 March 2007,
being the day immediately before release of the cautionary
announcement, have been utilised; and
5 the 30-day volume weighted average prices of Acucap and Atlas linked
units to 15 March 2007, being the day immediately before release of
the cautionary announcement have been utilised.
(ii) 60% consideration units and 40% cash consideration
(Cents) Before After (1) % Change
Attributable market value
- Market price (2) 1915 2053 7.2%
- 30-day weighted average price (3) 1838 1969 7.2%
- Market price (4) 1780 1977 11.1%
- 30-day weighted average price (5) 1736 1944 12.0%
Notes:
The financial effects set out above have been based on the following
assumptions:
1 Atlas linked unitholders have elected to receive the cash
consideration in respect of 40% of their Atlas linked units;
2 the closing prices of Acucap and Atlas linked units on 30 April 2007
have been utilised;
3 the 30-day volume weighted average prices of Acucap and Atlas linked
units to 30 April 2007 have been utilised;
4 the closing prices of Acucap and Atlas linked units on 15 March 2007,
being the date before release of the cautionary announcement have been
utilised; and
5 the 30-day volume weighted average prices of Acucap and Atlas linked
units to 15 March 2007, being the date before release of the
cautionary announcement have been utilised.
8. ACUCAP FINANCIAL EFFECTS
8.1. The unaudited pro forma financial effects of the scheme on an Acucap
unitholder are presented below for illustrative purposes only and
because of their pro forma nature may not give a fair reflection of
Acucap`s financial results and position after the scheme.
8.2. The unaudited pro forma financial effects are the responsibility of
the directors of Acucap and the directors of Atlas accept no
responsibility in relation thereto.
8.3. The board of directors of Acucap believes that earnings and headline
earnings per linked unit are irrelevant to listed property fund
investors, and that distributions per unit are a more appropriate
measure of performance.
8.4. The increase in the earnings per linked unit as depicted in the
financial effects below can be ascribed to a fair value adjustment to
investment properties in Atlas.
8.5. The financial effects have been prepared on two bases - the first, on
the assumption that all of the Atlas unitholders elect to receive the
unit consideration and the second, on the assumption that 40% of the
aggregate consideration is settled in cash.
(i) 100% consideration units
(Cents) Before After (1) % Change
(1)
Earnings per linked unit (2) 6.40 145.59 2173%
Headline earnings per linked unit (2) 99.30 104.66 5%
Distribution per linked unit (2) 91.26 96.78 6%
NAV per linked unit (3) 2,144.27 2,472.31 15%
NTAV per linked unit (3) 2,144.27 2,218.77 3%
Weighted average linked units in issue 69,596 109,181
(`000)
Linked units in issue less treasury 73,561 113,147
linked units (`000)
Linked units in issue (`000) 81,182 120,768
Notes:
1 The financial effects set out above have been based on the reviewed
interim results of Acucap for the 6 months ended 30 September 2006 and
the financial results of Atlas for the period 1 April 2006 to 30
September 2006 and on the assumption that none of the Atlas
unitholders elects the cash consideration.
2 Earnings, headline earnings and distribution effects are based on the
following assumptions:
a) the scheme was implemented effective 1 April 2006; and
b) the 22 320 644 Atlas linked units already owned by Acucap ("initial
tranche of Atlas units") were acquired by Acucap effective 1 April
2006.
3 NAV and NTAV effects are based on the following assumptions:
a) the scheme was implemented effective 30 September 2006;
b) the fair value of the consideration units was determined at the price
per Acucap linked unit of R33.00 as at 30 April 2007;
c) costs of the scheme of R5,15 million have been capitalised to
investment properties; and
d) the initial tranche of Atlas units was acquired by Acucap effective 30
September 2006.
4 A purchase price allocation exercise will need to be performed at the
effective date of the scheme in terms of IFRS 3: Business
Combinations.
5 For purposes of the pro forma financial effects, the difference
between the purchase price and the carrying value of the assets and
liabilities acquired has been allocated to goodwill.
(ii) 60% consideration units and 40% cash consideration
(Cents) Before After (1) % Change
(1)
Earnings per linked unit (2) 6.40 150.21 2246%
Headline earnings per linked unit (2) 99.30 104.91 6%
Distribution per linked unit (2) 91.26 94.62 4%
NAV per linked unit (3) 2,144.27 2,387.36 11%
NTAV per linked unit (3) 2,144.27 2,124.85 (1)%
Weighted average linked units in issue 69,596 98,649
(`000)
Linked units in issue less treasury 73,561 102,615
linked units (`000)
Linked units in issue (`000) 81,182 115,502
Notes:
1 The financial effects set out above have been based on the reviewed
interim results of Acucap for the 6 months ended 30 September 2006 and
the financial results of Atlas for the period 1 April 2006 to 30
September 2006 and on the assumption that Atlas unitholders elect the
40% cash consideration, half of which will be placed with Thesele
Group (Proprietary) Limited, Acucap`s empowerment unitholder, in terms
of a vendor consideration placement.
2 Earnings, headline earnings and distribution effects are based on the
following assumptions:
a) the scheme was implemented effective 1 April 2006;
b) the initial tranche of Atlas units were acquired by Acucap effective 1
April 2006; and
c) the cash consideration of R330,1 million was financed by long-term
borrowings, incurring interest at an average interest rate of 9,2% per
annum before taxation.
3 NAV and NTAV effects are based on the following assumptions:
a) the scheme was implemented effective 30 September 2006;
b) the fair value of the consideration units was determined at the price
on 30 April 2007 per Acucap linked unit of R33.00;
c) costs of the offer of R5,15 million have been capitalised to
investment properties;
d) the initial tranche of Altas units were acquired by Acucap effective
30 September 2006;
e) the cash consideration of R330,1 million was financed 50% by long-term
borrowings and 50% by way of a vendor consideration placement.
4 A purchase price allocation exercise will need to be performed at the
effective date of the scheme in terms of IFRS 3: Business
Combinations.
5 For purposes of the pro forma financial effects, the difference
between the purchase price and the carrying value of the assets and
liabilities acquired has been allocated to goodwill.
9. SALIENT DATES AND TIMES
The salient dates and times pertaining to the scheme will be published in
due course.
10. FURTHER DOCUMENTATION
10.1. A circular containing full details of the scheme will be posted
to Atlas unitholders in due course.
10.2. An Acucap Category 1 acquisition circular will be posted to
Acucap unitholders in due course.
11. WITHDRAWAL OF CAUTIONARY
Unitholders need no longer exercise caution when dealing in the securities
of Acucap and Atlas.
Rosebank
2 May 2007
Corporate advisor, legal advisor and sponsor to Acucap
Java Capital (Proprietary) Limited
Sponsor to Atlas
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited.
Corporate advisor to Atlas
Investec Corporate Finance, a division of Investec Bank Limited
Legal advisor to Atlas
Edward Nathan Sonnenbergs Inc.
Date: 03/05/2007 07:57:01 Produced by the JSE SENS Department.
