| Mon 18 Feb 2008, 8:30 | | PGR - Peregrine - Update in regard to proposed acquisition of a controlling |
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PGR
PGR
PGR - Peregrine - Update in regard to proposed acquisition of a controlling
interest in the stenham group and cautionary announcement
PEREGRINE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number 1994/006026/06)
Share code: PGR & ISIN: ZAE000078127
("Peregrine" or "the company")
UPDATE IN REGARD TO PROPOSED ACQUISITION OF A CONTROLLING INTEREST IN THE
STENHAM GROUP AND CAUTIONARY ANNOUNCEMENT
INTRODUCTION
On 2 October 2007 it was announced that Peregrine had concluded a nonbinding
heads of agreement in terms of which Peregrine would, subject to entering
into formal acquisition and shareholder agreements (the "formal agreements")
and the fulfilment of certain conditions, acquire at least 65% of Stenham
Group Limited (the "transaction"), with effect from 1 October 2007 (the
"effective date").
In the course of concluding the negotiations around the formal agreements and
in order to ensure that the funding for the transaction which had been
procured by Peregrine was sufficient to complete the transaction, certain
terms of the transaction have been revisited by the parties, as further
detailed below.
In terms of the revised terms, Peregrine Financial Services Limited ("PFS"),
a whollyowned subsidiary of Peregrine, will initially purchase (the "initial
acquisition") 51% of the shares in Stenham Limited (the "Stenham shares"), a
newly constituted holding company of the Stenham group of companies (the
"Stenham group") (following a corporate reorganisation of the group) from the
current shareholders (the "Stenham vendors"). In addition, in terms of an
option, PFS will be entitled to purchase an additional 14% of the Stenham
shares in the group from the Stenham vendors.
The purchase price for the Stenham shares acquired in terms of the initial
acquisition will be based on an enterprise value of GBP150 million in respect
of the Stenham group to which valuation certain adjustments (which are in the
process of finalisation) will be made(the "initial Stenham value"). It is
anticipated that the purchase price for the Stenham shares acquired in terms
of the initial acquisition will be approximately GBP75.7 million.
This purchase price will be paid by Peregrine to the Stenham vendors on 1
April 2008 (the "completion date"), will be settled partly in cash and partly
in terms of loan notes issued by PFS and will be funded by way of an onshore
bank loan and internal cash resources of the company.
In addition to this purchase price, an additional consideration of up to but
not exceeding GBP5 million will be payable to certain members of management,
in the event that specified performance criteria for each of the businesses
within the Stenham group are met within the 3 year period immediately
following the completion date or, in the event that within such 3 year
period, a material part of the business of the Stenham group is sold to a
third party (specifically excluding a sale pursuant to a listing and an
initial public offering).
In terms of the option referred to above, PFS will be entitled to purchase an
additional 14% of the shares in the Stenham group (the "option shares") from
the Stenham vendors. The option may be exercised from 1 April 2010 to 30
April 2010, in whole and not in part only.
If PFS exercises the option, the purchase price for the option shares will be
based on the initial Stenham value, increased by 10% per annum, compounded
annually, from the completion date plus 14% of all retained income
accumulated during the period from 1 October 2007 to date of payment of the
purchase price of the option shares. This purchase price will be settled in
cash.
CONDITIONS TO THE TRANSACTION
The transaction remains conditional on fulfilment of the following
conditions:
- the approval of the transaction by the South African Reserve Bank;
- approval of the transaction by the JSE;
- approval of the transaction by the Peregrine shareholders as required in
terms of the Companies Act and by the rules of the JSE;
- approval of the transaction by the United Kingdom`s Financial Services
Authority;
- approval of the transaction by the Guernsey Financial Services
Commission;
- completion of the internal reorganisation of the Stenham group referred
to above; and
- consent of the Royal Bank of Scotland International Limited to the
transaction in accordance with the terms of a loan granted by the bank
to the Stenham group.
PRO FORMA FINANCIAL EFFECTS
In light of the updated terms of the transaction as set out above, the pro
forma financial effects set out in the announcement of 2 October 2007 will be
superseded in their entirety by a revised set of pro forma financial effects
which will be announced to shareholders as soon as these are available.
CAUTIONARY ANNOUNCEMENT AND FURTHER DOCUMENTATION
Pending further announcements in regard to the transaction shareholders are
advised to exercise caution when dealing in the company`s shares.
A circular containing more detail in relation to the transaction and
incorporating a notice of general meeting will be sent to Peregrine
shareholders prior to 15 March 2008.
Rosebank
18 February 2008
Corporate advisor and sponsor
Java Capital (Proprietary) Limited
Date: 18/02/2008 08:30:03 Produced by the JSE SENS Department.
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