| Wed 12 Dec 2007, 7:40 | | TAL - Tiger Automotive Limited - Firm intention |
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TAL
TAL
TAL - Tiger Automotive Limited - Firm intention
TIGER AUTOMOTIVE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/042651/06)
(Share code: TAL ISIN: ZAE000087482)
("TiAuto" or "the company")
FIRM INTENTION
INTRODUCTION
Further to the cautionary announcements dated 18 October 2007 and 14 November
2007, shareholders are advised that Ethos Private Equity Fund V ("Ethos"),acting
through Main Street 615(Proprietary) Limited ("the proposer")), has submitted to
the board of directors of TiAuto ("the board") a letter confirming its firm
intention to make an offer ("the offer") to acquire all of the issued ordinary
shares in TiAuto (the "scheme shares") for a cash consideration of 1751 cents
per scheme share. The cash consideration of 1751 cents per scheme share that
shareholders will receive is in addition to the 49 cent distribution to
shareholders payable on or about 18 December 2007 ("the proposed distribution").
The cash consideration per scheme share (excluding the proposed distribution)
represents a premium of approximately 33% to the 30-day volume weighted average
price ("VWAP") of TiAuto shares prior to the first cautionary announcement.
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 the
proposer between TiAuto and all of its shareholders.
TERMS AND CONDITIONS OF THE OFFER
* The material terms and conditions of the offer will be as follows:
Scheme consideration
The consideration payable by the proposer to each scheme participant in terms of
the scheme is 1751 cents per scheme share plus, if the operative date of the
scheme occurs after 1 March 2008, interest at a rate of:
- 11.5% per annum (nominal annual compounded monthly) for the period from 1
March 2008 to the date on which the scheme consideration is paid or to 1
April 2008 (whichever occurs first); and if applicable
- the prime overdraft rate of First National Bank, a division of FirstRand
Bank Limited, plus 200 basis points for the period from 1 April 2008 to the
date on which the scheme consideration is paid.
The aforesaid interest will be calculated from 1 March 2008 to the date on which
the scheme consideration is paid, including the first day and excluding the last
day.
Other than the proposed distribution, the amount of the scheme consideration
assumes that no dividends, distributions or similar payments will be declared or
paid to TiAuto shareholders between 13 November 2007 and the operative date of
the scheme. Should the company declare or pay any such dividends and/or make any
such payments over and above the proposed distribution, the scheme consideration
will be reduced by an amount equal to the aggregate amount of such dividends
and/or payments, including any Secondary Tax on Companies payable by the company
in respect thereof.
Following the implementation of the scheme, TiAuto will be a wholly-owned
subsidiary of the proposer and the listing of the entire issued share capital of
TiAuto on the JSE Limited (the "JSE") will be terminated.
* Conditions precedent to the scheme
The scheme will be subject to the fulfillment of the following conditions
precedent:
* an unqualified recommendation from the eligible directors of the board to
the shareholders of the company to vote in favour of the scheme. This
condition precedent will be stipulated for the exclusive benefit of the
proposer which may waive the fulfillment of such condition in its sole
discretion;
* all approvals and consents necessary to implement the scheme being obtained
from the Competition Authorities by not later than 30 June 2008;
in addition to approval from the Competition Authorities, all regulatory
approvals and consents necessary to implement the scheme being obtained by
not later than 30 June 2008;
* the scheme being approved by a majority representing not less than three-
fourths of the votes exercisable by scheme members who are present and
voting (either in person or by proxy) at such meeting by not later than 30
June 2008;
* the High Court of South Africa (Witwatersrand Local Division) sanctioning
the scheme by not later than 30 June 2008;
* a notarially certified copy of the order of court sanctioning the scheme -
being registered by the Registrar of Companies in terms of the Act by not
later than 30 June 2008; and
* the absence of any material adverse change between 7 December 2007 and the
business day immediately preceding the date of sanction of the scheme (the
"MAC period"), where "material adverse change" shall mean the occurrence of
any event or events specific to the company and/or its subsidiaries and/or
one or more of their businesses, as a result of the conduct of the business
of the company and/or any of its subsidiaries outside of the ordinary
course, which individually and/or in aggregate, either (i) has reduced,
and/or is reasonably likely to reduce (within the next succeeding 12 month
period), the earnings of the company by R10 million or more; and/or (ii)
has resulted, and/or is reasonably likely to result (within the next
succeeding 12 month period), in a loss or liability to the company in an
amount of R20 million or more. Any event or events which occurred prior to
the MAC period but which would, had it or they occurred during the MAC
period, have constituted a material adverse change, shall be deemed to have
occurred within the MAC period if they were not disclosed to Ethos by the
company during the due diligence investigations. Any such event or events
shall be deemed to have been disclosed to Ethos by the company during the
due diligence investigations if adequate information regarding such event
or events was provided or made available to Ethos during the due diligence
investigations. If by the expiry of the MAC period the proposer has not
advised TiAuto in writing of any material adverse change, this condition
shall be deemed to have been fulfilled. This condition precedent will be
stipulated for the exclusive benefit of the proposer which may waive its
fulfillment in its sole discretion.
FUNDING AND CASH CONFIRMATION
Ethos has provided the necessary cash confirmation letters to the Securities
Regulation Panel ("SRP") in terms of Rule 2.3.2(b) and Rule 21.7 of the SRP Code
on Takeovers and Mergers (the "SRP Code").
GENERAL
At the date of this announcement, neither Ethos nor the proposer, directly or
indirectly, own or control any of the issued shares in TiAuto
MANAGEMENT PARTICIPATION
Ethos has reached agreement in principle with the management team of TiAuto
regarding their participation in the proposer following implementation of the
scheme.
IRREVOCABLE UNDERTAKINGS
TiAuto shareholders representing approximately 64.8% of the shares eligible to
vote at the scheme meeting have furnished irrevocable undertakings to vote in
favour of the scheme.
CO-OPERATION AND RELATED MATTERS
TiAuto has agreed to co-operate fully with Ethos and the proposer in the
preparation of the necessary documents, circulars to shareholders, court
applications, board resolutions, meetings, announcements and the like required
to implement the scheme.
The company has further agreed that it will not actively solicit any competing
offer (as defined below) while the offer in terms of the scheme remains open. If
a competing offer is received, the company has undertaken to advise Ethos and
the proposer of the existence of and all terms of any competing offer forthwith
after becoming aware thereof and shall give the proposer an opportunity for a
period of 5 business days to match or better such competing offer.
The company has agreed to pay the proposer a break fee equal to 0,5% of the
aggregate scheme consideration if:
* he Board withdraws or adversely modifies its recommendation of the scheme
after such recommendation has been made as a result of a proposal in
respect of any offer, scheme or similar transaction proposed by a third
party which is not acting in concert with the proposer and the purpose of
which is to enable that third party (or any person other than the proposer)
to acquire all or a substantial portion of TiAuto`s shares or all or a
substantial portion of TiAuto`s assets or business ("a competing offer")
unless, notwithstanding such withdrawal or adverse modification of such
recommendation, the scheme is successfully implemented; or
* competing offer is announced prior to the scheme meeting and such
competing offer is successfully implemented.
APPOINTMENT OF INDEPENDENT ADVISOR
The Board has established an independent sub-committee comprising of the
following non-executive directors: Phillip Vallet, Martin Glatt and Michael
Groves, to manage and co-ordinate the offer process from a TiAuto perspective
and to formulate and make recommendations to TiAuto shareholders as required in
terms of the SRP Code.
The board has appointed Sasfin Capital, a division of Sasfin Bank Limited
("Sasfin Capital") to advise the board on the offer and as to how the offer
affects the holders of all of TiAuto`s securities. Sasfin Capital has advised
the board that it has considered the terms and conditions of the scheme and is
of the opinion that these terms and conditions are fair to scheme participants.
The text of the letter from Sasfin Capital will be included in the circular to
be posted to shareholders detailing the terms of the scheme.
MARKET AND FINANCIAL INFORMATION
Information regarding the price at which TiAuto shares traded immediately prior
to the publication of TiAuto`s cautionary announcement and this announcement of
the proposer`s firm intention to make an offer, in relation to the offer
consideration, is set out in the table below:
Before the The offer Premium
scheme consideration (%)
(cents) (cents)
Market price on 17 October 2007 1 400(1) 1751 25%
30-day VWAP to 17 October 2007 1 321(2) 1751 33%
Market price on 12 November 2007 1 650(3) 1751 6%
30-day VWAP to 12 November 2007 1 469(4) 1751 16%
Notes:
(1) Closing price of TiAuto shares on the JSE on 17 October 2007, being the
last trading day prior to publication of the first cautionary announcement.
(2) the VWAP at which TiAuto shares traded on the JSE for the 30 trading days
up to and including 17 October 2007, being the last trading day prior to
publication of the first cautionary announcement.
(3) Closing price of TiAuto shares on the JSE on 12 November 2007, being the
last trading day before the detailed cautionary announcement relating to the
offer.
(4) the VWAP at which TiAuto shares traded on the JSE for the 30 trading days
up to and including 12 November 2007.
IMPORTANT DATES AND TIMES
TiAuto shareholders will be advised of important dates and times of the scheme
in due course.
12 December 2007
Independent advisor and sponsor to TiAuto
Sasfin Capital
A division of Sasfin Bank Limited
Attorneys to TiAuto and attorneys to the scheme
Fluxmans Attorneys
Corporate advisor to the proposer
Hyde Park Capital
Attorneys and tax advisor to Ethos and the proposer
Webber Wentzel Bowens
Date: 12/12/2007 07:40:10 Produced by the JSE SENS Department.
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