| Fri 23 Nov 2007, 17:02 | | BSB - The House Of Busby - Firm Intention And Furt |
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BSB
BSB
BSB - The House Of Busby - Firm Intention And Further Cautionary Announcement
THE HOUSE OF BUSBY LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 1997/009173/06)
Share code: BSB ISIN number: ZAE000013637
("Busby" or "the company)
FIRM INTENTION AND FURTHER CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Further to the cautionary announcements published by Busby on 1 October 2007 and
12 November 2007, shareholders are advised that Ethos Private Equity Fund V
("Ethos"), acting through Main Street 251(Proprietary) Limited ("Newco"), has
submitted to the board of directors of Busby ("the board") a firm intention to
make an offer ("the offer") to acquire all of the issued ordinary shares in
Busby (other than the 38 532 641 shares in aggregate held by Keith Brouze Trust,
the David Brouze Trust, Moneyline 706 (Proprietary) Limited, Moneyline 848
(Proprietary) Limited, Moneyline 857 (Proprietary) Limited, the Selwyn Moss
Family Trust, the Mark Gordon Family Trust, Mr Martinho Gomes Duarte (in respect
of 450 000 of the 1 516 424 shares held by him, the balance forming part of the
scheme shares), Mr Shawn Maurice Lashansky (collectively "the consortium"),
Buxton Leathergoods (Proprietary) Limited, the Busby shares held by The House of
Busby Share Scheme, the proposer to the extent that it holds shares in Busby and
other than in respect of the Busby shares still registered in the name of Busby
(the "excluded shares")) for a cash consideration of R21.00 per scheme share.
The offer is to be implemented, subject to the conditions set out below, by way
of a scheme of arrangement ("the scheme") in terms of section 311 of the
Companies Act, 61 of 1973, as amended ("the Act"), to be proposed by Newco
between Busby and all of its shareholders other than the holders of the excluded
shares (the "scheme shares").
TERMS AND CONDITIONS OF THE OFFER
The material terms and conditions of the offer will be as follows:
Offer consideration
The offer will be made at a cash price of R21.00 per scheme share (the "offer
consideration"). Assuming that all of the outstanding share options are
vested in the option holders and settled in cash on or prior to the
implementation date of the scheme ("operative date") and the shares still
registered in the name of the company are cancelled on or prior to the
operative date, the aggregate number of scheme shares will be 19 414 330 and
the aggregate consideration payable by the proposer will be R407 700 930.
The offer will be made on the basis that no dividends or similar payments
will be declared or paid to Busby shareholders between 23 November 2007 and
the operative date. Should Busby declare any such dividends or make any such
payments, the offer consideration will be reduced by an amount equal to the
amount of such dividend or payment per Busby share.
Newco will pay interest on the offer consideration at (Absa Bank) Limited`s
prime rate for the period from 1 February 2008 to the date on which the
scheme consideration is paid, including the first day and excluding the last
day.
Following the implementation of the scheme, Busby shares will be owned by the
proposer and the consortium, which will continue to operate the businesses
currently operated within the Busby group, and the listing of the entire
issued share capital of Busby on the JSE Limited (the "JSE") will be
terminated.
Conditions precedent to the scheme
The scheme will be subject to the fulfilment of the following conditions
precedent:
- a recommendation from the required number of eligible directors on the
board of Busby to the shareholders of Busby to vote in favour of the offer;
- an independent financial advisor appointed by the board to advise the
minorities of Busby, confirming to the board and the shareholders of Busby
that the offer consideration is fair and reasonable;
- all regulatory approvals and consents necessary in respect of the
offer being obtained, including but not limited to approvals and consents
from the JSE, the Securities Regulation Panel ("the SRP") and the South
African competition authorities;
- the scheme being approved by a majority representing not less than
three-fourths of the votes exercisable by members of Busby entitled to
attend and vote at the scheme meeting who are present and voting (either in
person or by proxy) at such meeting;
- the High Court of South Africa (Transvaal Provincial Division or
Witwatersrand Local Division) sanctioning the scheme;
- a certified copy of the order of court sanctioning the scheme being
registered by the Registrar of Companies in terms of the Act;
- the securing, by no later than the business day immediately preceding
the date of sanction of the Scheme, to the extent necessary and to the
extent reasonably required by Ethos, of the approval of each of Guess Inc.,
Aldo Group International, Mango, Esprit and Nine West to the assignment of
the licence agreements pursuant to which the company (or any of its
subsidiaries) licenses the Guess, Aldo, Mango, Esprit or Nine West
trademarks or other intellectual property to the extent that an assignment
of the relevant license agreement is required in order to give effect to
any restructure to be effected by the company (or any of its subsidiaries)
immediately post the implementation of the scheme; and
- the securing by no later than the business day immediately preceding
the date of sanction of the Scheme, to the extent necessary and to the
extent reasonably required by Ethos, of the approval of the landlord of
each of the key premises leased by the company (or any of its subsidiaries)
to the assignment of the relevant lease agreement to the extent that an
assignment of the lease is required in order to give effect to any
restructure to be effected by the company (or any of its subsidiaries)
immediately post the implementation of the scheme.
FUNDING AND CASH CONFIRMATION
Ethos will underwrite all the funding required to settle the offer
consideration.
In terms of Rule 2.3.2(b) and Rule 21.7 of the SRP Code on Takeovers and Mergers
(the "SRP Code"), Ethos has provided the SRP with the necessary cash
confirmation letter.
GENERAL
At the date of this announcement, neither Ethos nor Newco, directly or
indirectly, own or control any of the issued shares in Busby. No arrangements
exist with Ethos and/or Newco, with Busby or with any person acting in concert
with Ethos and/or Newco or with Busby in relation to the scheme shares.
MANAGEMENT PARTICIPATION
Arrangements between the proposer and key management are being negotiated
without any involvement of Busby. Details of any arrangements with the
management team will be disclosed in due course.
CO-OPERATION AND RELATED MATTERS
Busby has agreed to co-operate fully with Ethos and Newco in the preparation of
the necessary documents, circulars to shareholders, Court applications, board
resolutions, meetings, announcements and the like required to implement the
scheme.
Busby has agreed to reimburse Newco and/or Ethos, for all reasonable third party
costs incurred by Newco and/or Ethos (which are anticipated to be about R6.5
million, but in any event not more than 1% of the company`s market
capitalisation based on the competitive offer price) if:
- the independent sub-committee of the board withdraws or adversely
modifies its recommendation of the offer after such recommendation has been
made as a result of a proposal in respect of any offer, scheme of arrangement
or similar transaction proposed by a third party which is not acting in
concert with the offeror and the purpose of which is to enable that third
party (or any person other than the offeror) to acquire all or a substantial
portion of the scheme shares or all or a substantial portion of Busby`s
assets or business (a "competing offer") unless, notwithstanding such
withdrawal or adverse modification of such recommendation, the offer is
successfully implemented; or
- a competing offer is announced while the offer remains open and such
competing offer is successfully implemented.
APPOINTMENT OF INDEPENDENT ADVISOR
The board has appointed PKF (Jhb) Inc. to advise the board on the offer and as
to how the offer affects the holders of all of Busby`s securities.
Pursuant to the requirements of the SRP Code, the substance of the advice
furnished to the board shall be made known to the holders of Busby securities in
a form and manner approved by the SRP.
UNDERTAKINGS
Ethos has received irrevocable undertakings to support the offer from Stanlib
Asset Management, Visio Capital Management, 36ONE Asset Management, BOE Alpha
Fund, Spyglass Capital and Martin Duarte who collectively represent
approximately 53.1% of the scheme shares, in terms of which these shareholders
have undertaken to vote in favour of the scheme. In addition, Ethos has received
a letter of support from 36ONE Management to vote in favour of the scheme in
respect of 3.6% of the scheme shares.
MARKET AND FINANCIAL INFORMATION
Information regarding the price at which Busby shares traded immediately prior
to the publication of Busby`s cautionary announcement and this announcement of
Newco`s firm intention to make an offer, in relation to the offer consideration,
as well as a comparison of the offer consideration to the net asset value and
tangible net asset value per Busby share at 30 June 2007, Busby`s financial year
end, is set out in the table below.
Before the The offer Premium (%)
scheme considerati
(cents) on (cents)
Market price on 1 October 2007 1950 2100 7.69%
30-day VWAP to 1 October 2007 1894 2100 10.87%
Market price on 22 November 2007 1950 7.69%
2100
30-day VWAP to 22 November 2007 1974 2100 6.39%
Net asset value per share 579 2100 262.69%
Tangible net asset value per share 563 2100 273.00%
Notes:
(1)Closing price of Busby shares on the JSE on 1 October 2007, being the last
trading day prior to publication of the cautionary announcement.
(2)the volume weighted average price ("VWAP") at which Busby shares traded on
the JSE for the 30 trading days up to and including 1 October 2007, being
the last trading day prior to publication of this announcement.
(3)Closing price of Busby shares on the JSE on 22 November 2007, being the last
trading day prior to publication of this announcement.
(4)VWAP at which Busby shares traded on the JSE for the 30 trading days up to
and including 22 November 2007.
(5)Audited net asset value and tangible net asset value per share attributable
to Busby at 30 June 2007.
IMPORTANT DATES AND TIMES
Busby shareholders will be advised of important dates and times of the scheme in
due course.
FURTHER ANNOUNCEMENT
Further announcements in respect of the offer will be published in due course.
Until publication of such further announcements, shareholders of Busby are
advised to continue to exercise caution when dealing in Busby shares.
Rosebank
23 November 2007
Transaction sponsor and corporate advisor to Busby
Java Capital (Proprietary) Limited
Sponsor
Investec Bank Limited
Attorneys and tax advisor to Ethos and Newco
Webber Wentzel Bowens
Independent advisor to Busby
PKF (Jhb) Inc.
Attorneys to the scheme
Fluxmans Inc.
Date: 23/11/2007 17:02:44 Produced by the JSE SENS Department.
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