| Wed 14 Nov 2007, 8:08 | | TAL - Tiger Automotive Limited - Further cautionar |
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TAL
TAL
TAL - Tiger Automotive Limited - Further cautionary announcement
TIGER AUTOMOTIVE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/042651/06)
Share code: TAL & ISIN: ZAE000087482
("TiAuto" or "the company")
FURTHER CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Further to the cautionary announcement released on SENS on 18 October 2007
advising shareholders of TiAuto that the board of directors of TiAuto had
received a proposal which may result in an offer to acquire the entire issued
share capital of the company and ordinary shares to be issued by the company
pursuant to options granted in terms of the Tiger Automotive Limited Employee
Share Trust deed (collectively "the offer shares") ("the possible transaction"),
shareholders are advised that a written expression of interest ("the letter of
interest") in respect of the possible transaction has been signed between Ethos
Private Equity Fund V ("Ethos"), TiAuto and the shareholders reflected in the
table below..
The letter of interest does not constitute a binding offer and is not a notice
of firm intention to make an offer for the purposes of the Securities Regulation
Code on Takeovers and Mergers ("the Code").
LETTER OF INTEREST AND PRE-CONDITIONS TO A FIRM OFFER
The purpose of the letter of interest is to set out the pre-conditions subject
to which Ethos will procure that Main Street 615 (Proprietary) Limited
("Newco"), will make a formal offer to acquire the offer shares ("the offer")
and various matters relating thereto. Upon the fulfilment of such pre-
conditions, the offer will be made at a cash price of R17.00 per share ("the
offer price"), excluding the distribution (up to a maximum of 65 cents per
TiAuto share) that is proposed to be voted on by TiAuto shareholders at the
Annual General Meeting of the company on 27 November 2007 ("the proposed
distribution").
The offer price and proposed distribution implies an offer consideration for the
company of approximately R1 052 million. To the extent that the proposed
distribution is less than 65 cents per share, the offer price will be increased
by the difference. It is to be noted in this regard that the proposed
distribution placed on the agenda of the Annual General Meeting is for an amount
of 49 cents per share. If the proposed distribution is not increased to 65
cents per share, the offer price will, accordingly, be increased to R17,16 per
share. The offer price will be reduced by the amount of any dividends or
distributions (inclusive of Secondary Tax on Companies thereon) made in excess
of 65 cents per share.
If payment is not made before 1 March 2008, interest will be levied on the offer
price at a rate of:
* 11.5% per annum with effect from 1 March 2008 to the date on which the
offer price is paid or to 1 April 2008 (whichever occurs first); and
* First National Bank`s prime overdraft rate plus 200 basis points from 1
April 2008 to the date of payment, if applicable.
Interest will be calculated inclusive of the first day and exclusive of the last
day,
The pre-conditions subject to which the offer will be made are, firstly, the
completion by Ethos acting reasonably of an investigation to confirm the absence
of issues that would have reduced or have been reasonably likely to reduce the
reported earnings of the company for the financial year ended 30 June 2007 by R6
million or more, or would result, or would be reasonably likely to result in a
loss or liability (actual or contingent) of R12 million or more. The second pre-
condition is that Ethos, acting reasonably, is satisfied that the counterparties
to certain key contracts necessary for the conduct of the business of TiAuto
consent to the change of control of TiAuto that would result from the
implementation of the offer and to the assignment of such key contracts to Newco
or any of its subsidiaries.
At the time when Newco notifies the company of its firm intention to make the
offer, it will also be necessary in terms of the Code for Newco to provide
confirmation to the satisfaction of the Securities Regulation Panel and TiAuto
that Newco has the resources to satisfy full acceptance of the offer. In
addition to the pre-conditions, TiAuto has undertaken inter alia to cooperate
with Ethos and Newco in implementing any offer, and not actively to solicit any
competing offer.
The offer will be implemented by means of a scheme of arrangement to be proposed
by Newco in terms of section 311 of the Companies Act, 1973 ("the scheme"). The
scheme will be subject to the conditions precedent normal for a transaction of
this type, including regulatory approvals, approval by a majority of not less
than 75% of votes exercisable by members of the company at a scheme meeting, and
sanction of the scheme by the High Court of South Africa on or before 30 June
2008.
The company has undertaken to reimburse Newco all reasonable third party
expenses incurred by Newco in relation to and in connection with the possible
transaction if a competing offer is successfully implemented.
SHAREHOLDER SUPPORT
Shareholders reflected in the table below have irrevocably undertaken to vote in
favour of the scheme, if and when proposed:
Shareholder Number of Percentage of
shares share capital
BB Investment Company (Pty) Limited (a 12 065 086 20.2
subsidiary of Bidvest Limited)
Coronation Fund Managers Limited 7 536 600 12.6
RMB Asset Management (Pty) Limited 6 600 000 11.1
E Keizan 6 442 957 10.8
K Rivers* 722 999 1.2
TOTAL 33 367 642 56.0
* Messrs E Keizan and K Rivers have notified the company that they may be
included as participants in the offeror consortium.
The irrevocable undertakings referred to above will fall away should a competing
cash offer by a third party that exceeds the offer by at least 10% be received
and not matched or bettered by Newco within 5 business days after Newco becomes
aware of such competing offer.
Further cautionary
In the light of the above, shareholders are advised to continue to exercise
caution in trading in their TiAuto shares until a further announcement is made.
Midrand
13 November 2007
Sponsor: Sasfin Capital
(a division of Sasfin Bank Limited)
Date: 14/11/2007 08:08:47 Produced by the JSE SENS Department.
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