| Thu 5 Jul 2007, 9:30 | | ZED - Zeder Investments - Disposal by Zeder of its |
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ZED
ZED
ZED - Zeder Investments - Disposal by Zeder of its shareholding in Pioneer
Foods Limited to Kaap Agri Limited in Exchange for Kaap Agri Limited
shares
Zeder Investments Limited
Previously Friedshelf 766 (Pty) Limited
Incorporated in the Republic of South Africa
Registration number: 2006/019240/06
Share code: ZED & ISIN: ZAE000088431
("Zeder" or "the company")
DISPOSAL BY ZEDER OF ITS SHAREHOLDING IN PIONEER FOODS LIMITED TO KAAP AGRI
LIMITED IN EXCHANGE FOR KAAP AGRI LIMITED SHARES
1 Introduction
Shareholders are advised that the company has entered into an agreement
with Kaap Agri Limited ("Kaap Agri") in terms whereof it will dispose of
its shareholding in Pioneer Foods Limited ("Pioneer"), being 5.84%, to Kaap
Agri in exchange for Kaap Agri shares ("the share exchange").
2 Rationale and future outlook
The share exchange will result in Kaap Agri`s shareholding in Pioneer
increasing by 5.84% to 27.81%, and Zeder`s shareholding in Kaap Agri
increasing from 5.00% to 21.81%.
The board of Zeder regards the share exchange as an effective means of
substantially increasing its strategic interest in Kaap Agri, as well as
maintaining (and increasing) its interest in Pioneer. The transaction
represents a mechanism for Zeder to consolidate its holdings in Kaap Agri
and to equity account its Kaap Agri investment. This is in line with
Zeder`s stated objective of achieving interests in each of its underlying
investments of between 20 - 30%. The board of Zeder believes that Zeder`s
investment in Kaap Agri will ultimately enhance earnings and bring with it
annuity income streams, which will reduce Zeder`s exposure to the
volatility of marked-to-market profits.
Kaap Agri offers a wide range of services to the agricultural community in
the Northern and Western Cape. It has several "Agrimark" stores that not
only provide general farming requisites, but also cater for the general
public seeking out gardening, DIY or other outdoor equipment. This shift in
emphasis has had a positive impact on Kaap Agri`s revenue and profits in
the past financial year.
Pioneer has in its over 70 years of existence grown to become one of South
Africa`s largest food manufacturers. Although the core of its business is
largely the milling and baking of grain, it has developed an array of well
known household brands through organic and acquisitive growth, such as
Bokomo, Sasko, Heinz, Pepsi, Ceres, Liqui-Fruit and branded S.A.D
products.
3 Terms of the share exchange
3.1 The share exchange will be done on a 400 to 100 basis i.e. for every
100 Pioneer shares received by Kaap Agri from Zeder, it will issue 400 new
Kaap Agri shares to Zeder.
3.2 The effective date is 1 August 2007.
3.3 The share exchange, as well as the restructuring of Kaap Agri, upon
which the share exchange is dependent, is subject to the approval of Kaap
Agri shareholders.
3.4 Zeder intends retaining its Kaap Agri shares in the foreseeable
future.
4 Pro forma financial effects of the share exchange
Set out below are the pro forma financial effects of the share exchange,
based on Zeder`s audited results for the 6 months ended 28 February 2007.
The unaudited pro forma financial effects of the share exchange have been
prepared for illustrative purposes only so as to provide information as to
how the share exchange might have impacted on the audited results of Zeder
and because of their nature may not give a fair reflection of Zeder`s
financial position after the share exchange nor of the effect on Zeder`s
future earnings. The unaudited pro forma financial effects are the
responsibility of the company`s directors:
Column 1 Column 2
Before After Percentage
the the Change
share share
exchange exchange
(1) (2) (3)
(cents) (cents) (%)
Earnings per share 27.8 25.6 (7.9)
Headline earnings per share 27.8 25.6 (7.9)
Net asset value per share 224.5 231.8 3.3
Net tangible asset value per share 224.5 231.8 3.3
Number of shares in issue (million) 571.3 571.3 -
Weighted average number of shares in 490.5 490.5 -
issue (million)
Notes:
1 The figures in Column 1 have been extracted from the audited financial
results of Zeder for the 6 months ended 28 February 2007.
2 The earnings and headline earnings per share figures in Column 2 have
been calculated on the basis that the share exchange was effected on 1
September 2006 and based on the following assumptions:
- The after tax fair value gains on Zeder`s investments in Pioneer and
Kaap Agri amounting to R15,5 million and R8,8 million respectively have
been excluded;
- Interest income net of tax at 29% has been reduced by R0,9 million to
take into account additional Pioneer shares acquired subsequent to 28
February 2007 and disposed of in terms of this transaction;
- The dividends received from Pioneer and Kaap Agri have been excluded;
- Equity accounted earnings of Zeder`s effective 21,81% interest in Kaap
Agri amounting to R20,8 million have been taken into account.
3 The net asset value and net tangible asset value per share figures in
Column 2 have been calculated on the basis that the share exchange was
effected on 28 February 2007 and based on the following assumptions:
- The total aggregate consideration in respect of the share exchange was
received on that date;
- The after tax carrying value of Zeder`s investment in Pioneer
amounting to R298,4 million has been excluded;
- The cash balance has been reduced by R31 million, being the
consideration paid for 982 812 Pioneer shares subsequent to 28 February
2007;
- The additional 16,81% interest acquired in Kaap Agri amounting to
R370,6 million has been included.
5 Documentation
Should the JSE require a circular to be sent to shareholders containing the
details of the share exchange, same will be posted to shareholders in due
course.
6 Withdrawal of cautionary
Shareholders are advised that they no longer need exercise caution when
dealing in the company`s securities.
5 July 2007
Stellenbosch
Sponsor
PSG Capital (Pty) Limited
Date: 05/07/2007 09:30:01 Produced by the JSE SENS Department.
