| Tue 11 Mar 2008, 8:11 | | SFB - Stefanutti & Bressan Holdings - Acquisition |
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SFB
SFB
SFB - Stefanutti & Bressan Holdings - Acquisition Of Stocks Limited
And Further Cautionary Announcement
Stefanutti & Bressan Holdings Limited
(Formerly Stefanutti & Bressan Civils (Proprietary) Limited)
(Registration number 1996/003767/06)
Share code: SFB & ISIN ZAE000101903
("S&B" or "the Company")
ACQUISITION OF STOCKS LIMITED AND FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement made on 6 March 2008,
shareholders are advised that S&B has agreed to proceed with a
transaction to acquire the entire issued share capital of Stocks
Limited ("Stocks") for a total consideration of R 1 121 382 761 ("the
acquisition consideration") ("The Proposed transaction").
2. Nature of the Stocks businesses
Stocks is one of South Africa`s leading construction companies, with a
63-year history and a footprint that extends across Southern Africa
and internationally to the United Arab Emirates ("UAE"). Stocks
specialises in commercial construction through four key divisions:
Building, Major Projects, Housing and Concessions, and is an equal
partner in, Al Tayer Stocks, a fit-out contracting firm and Zener
Steward, an electromechanical business, in the UAE.
Building-related activities comprise Stocks` core business. Services
include the construction of commercial buildings such as airport
facilities, hospitals, hotels, factories, offices and shopping
centres. The order book is strong with a promising pipeline of
projects. In 2007 Stocks acquired the entire issued share capital of
Housing Africa Development (Proprietary) Limited ("HAD"). HAD focuses
on the affordable housing market for major mining and industrial
clients as well as the emerging middle class of first-time homeowners,
and certain upmarket and low cost housing projects for select private
and public sector clients. The acquisition of HAD is still subject to
Competition Commission approval.
Al Tayer Stocks is a fit-out contracting firm In the UAE. Obaid Humaid
Al Tayer, Stocks` partner, has recently been appointed the Minister of
State for Financial Affairs in the UAE and is Chairman of the Chamber
of Commerce. Zener Steward is an electromechanical company
specialising in the design and installation of electrical, mechanical
and plumbing systems. Salim Sharif, a partner in the business, is a
director of the National Bank of Dubai. Zener Steward has a strong
business relationship with Al Tayer Stocks.
Stocks is forecasting turnover for the financial year ending 30 April
2008 of approximately R2 billion excluding the HAD acquisition. Local
margins are in excess of typical margins expected for the building
industry and group margins are further enhanced by the UAE activities.
3. Rationale for the Proposed Transaction
Acquiring Stocks will enable S&B to access:
* Increased scale and critical mass to enable the group to secure
major construction and civils projects;
* An established presence and track record in the UAE, exposing S&B
to this robust construction market that is growing substantially;
* The Stocks infrastructure and work force which will allow S&B to
attain a significant presence in the building sector as well as a
bigger pool of resources to service the construction sector;
* Experienced management with an extensive track record; and
* Increased BEE credentials, raising black direct shareholding from
11.3% to 18.3% of the total issued share capital of S&B
subsequent to the Proposed Transaction.
4. Terms of the Proposed Transaction
4.1 Acquisition consideration and Value
The current shareholders of the equity of Stocks are as follows:
No of Ordinary Shareholding
Shares (%)
RMB Ventures
Two (Pty)
Limited ("RMB") 40 000 000 36.4
Leswikeng Building
(Pty) Limited
("Leswikeng") 30 000 000 27.3
Stocks Management 39 894 598 36.3
109 894 598 100.0
Stocks shareholders have provided S&B with irrevocable undertakings to
vote in favour of the Proposed Transaction.
In terms of the agreement, the acquisition consideration is payable
after all conditions precedent have been fulfilled. The acquisition
consideration will be settled through a combination of shares and
cash. An amount of R382.5 million plus R109 504 per day from 1 May
2008 until the date of payment will be payable to RMB. S&B will issue
39 724 880 S&B shares to Stocks Management and Leswikeng in proportion
to their current shareholding for a consideration of 1860 cents (being
the 30 day volume weighted average price as at 31 January 2008) per
S&B share.
4.2 Conditions precedent
The transaction is subject, inter alia, to the following conditions
precedent:
4.2.1the satisfactory completion by S&B and Stocks of reciprocal due
diligence reviews;
4.2.2 the execution of formal agreements, including warranties that
are normal for a transaction of this nature;
4.2.3 approval by S&B`s board of directors of the terms of the final
transaction agreements;
4.2.4 approval by S&B`s shareholders of the terms of the Proposed
Transaction as required under the JSE Listings Requirements;
4.2.5 the approval of the JSE Limited ("JSE"), the Securities
Regulation Code on Takeovers and Mergers ("SRP"), the Competition
Commission and other relevant authorities (if any) of the Proposed
Transaction and all of the documents associated with implementing the
Proposed Transaction;
4.2.6 approval and registration (to the extent necessary) of the
resolutions required to give effect to a distribution by Stocks of R61
363 637 payable to RMB;
4.2.7 legal completion of the HAD acquisition by Stocks;
4.8.9 service and restraint agreements, in form and substance
reasonably satisfactory to S&B, having been concluded between Stocks
and key Stocks Management; and
4.2.9 the Board of Stocks confirming in writing to S&B that no
dividends have been declared to the shareholders of Stocks in the
period between 1 May 2007 and Completion, other than as distributed to
RMB (as set out under paragraph 4.2.6 above) and the interim dividend
of R10 million paid on 31 January 2008.
5. Effective date
The effective date of the acquisition will be the 26th day of the
month in which the final transaction agreements are signed.
6. Articles of Association
In terms of the acquisition, Stocks will become a wholly owned
subsidiary of S&B and, in terms of section 9.16 of the JSE Listing
Requirements, will confirm in writing to the JSE that it will amend
its articles of association to comply with that of its new holding
company, S&B.
7. Pro forma financial effects of the acquisition and further
cautionary announcement
Pro Forma financial information will be published as soon as it is
available. As a result, shareholders are advised to continue
exercising caution when dealing in S&B securities until the
publication of such announcement.
8. Circular to shareholders
The implementation of the acquisition will result in a Category 1
transaction according to the JSE Listings Requirements.
A circular to shareholders setting out full details of the acquisition
as well as revised listing particulars incorporating a notice
convening a general meeting will be circulated to shareholders within
28 days following the date of this announcement.
Johannesburg
11 March 2008
Sponsor and S&B Transaction Stocks Transaction
transaction Attorneys Advisors
advisor: Webber Wentzel RAND MERCHANT BANK
Bridge Capital incorporating (A division of
Advisors Mallinicks FirstRand Bank
(Proprietary) Limited)
Limited
Stocks Transaction Investor Relations
Attorneys Envisage Investor
Cliffe Dekker and Corporate
Relations
Date: 11/03/2008 08:11:13 Produced by the JSE SENS Department.
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