| Mon 21 Jul 2008, 8:01 | | TBS - Tiger Brands Limited - The proposed separate listing and unbundling of |
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TBS
TIIH
TBS - Tiger Brands Limited - The proposed separate listing and unbundling of
Adcock Ingram Holdings Limited
Tiger Brands Limited ("Tiger Brands" or "the Company")
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
THE PROPOSED SEPARATE LISTING AND UNBUNDLING OF ADCOCK INGRAM HOLDINGS LIMITED
1. INTRODUCTION
On 6 November 2007 Tiger Brands publicly announced on the Securities Exchange
News Service ("SENS") that it had concluded a process with regard to the
disposal of its healthcare interests. After the review of the non-binding bids
received and after considering both the qualitative and quantitative aspects of
the bids, a listing and unbundling of Adcock Ingram Holdings Limited ("Adcock")
on the JSE Limited ("JSE") was considered best to serve the interests of its
shareholders. The Tiger Brands directors have therefore resolved, subject to the
fulfillment of the conditions precedent as set out in paragraph 4 below and in
terms of the unbundling agreement, to make an application for the separate
listing of Adcock on the JSE and to distribute all of the Adcock shares held by
the Company to shareholders recorded on the register on 29 August 2008 (the
"Record Date").
2. BACKGROUND TO AND RATIONALE FOR THE UNBUNDLING
The Tiger Brands directors have undertaken an extensive strategic review of
Tiger Brands healthcare interests and have concluded that, although the
healthcare interests continue to achieve sound levels of profitability, in order
to maximise future shareholder value it is preferable for Tiger Brands to focus
on its core fast moving consumer goods ("FMCG") activities and for Adcock to be
a separately listed and focused healthcare business.
As a result of differing strategic imperatives between the FMCG and healthcare
interests, the Tiger Brands directors have decided to separately list and
unbundle the healthcare interests. The listing and subsequent unbundling of
Adcock will create a focused, leading, independent South African healthcare
company listed on the JSE and will enhance the strategic flexibility of Adcock
so as to enable it to embark on its own strategy to grow by acquisition and
internationalise its healthcare business.
The unbundling will allow investors to attribute appropriate share price ratings
to both Tiger Brands and Adcock, aligned to the industry-specific dynamics of
each of the respective companies.
3. THE UNBUNDLING
Subject to the fulfillment of the conditions precedent as set out in paragraph 4
below, Tiger Brands will distribute all of the Adcock shares held by the Company
to all of its shareholders recorded in the register at the close of business on
the Record Date by way of the unbundling, which shares will be listed on the JSE
in the "Pharmaceuticals" sector of the Main Board of the JSE. All shareholders
will receive one Adcock share for every one Tiger Brands share held by them on
the Record Date.
The unbundling will be effected as a dividend in specie in terms of section 90
of the Companies Act (No. 61 of 1973) as amended ("Companies Act"), amounting to
R1 204.4 million (one billion two hundred and four million four hundred thousand
rand) to be implemented by way of a reduction of Tiger Brands share premium
account (as contemplated in the Companies Act) as at the Record Date to nil and
thereafter by reducing the reserves. The unbundling will also be implemented in
accordance with section 46 of the Income Tax Act (No.58 of 1962) as amended,
such that each holder of a Tiger Brands share on the Record Date will become an
owner of an Adcock unbundled share.
4. CONDITIONS PRECEDENT
The separate listing and subsequent unbundling of Adcock is subject to the
fulfillment of the following inter-conditional conditions precedent, namely the
passing at the general meeting of the Company to be held at 10h00 on Thursday 14
August 2008 of the resolutions required to -
4.1 implement the unbundling;
4.2 effect the required amendments to the Tiger Brands share option and share
purchase schemes and approve the creation of the Adcock share incentive
schemes; and
4.3 approve the remuneration paid to the non-executive directors of Adcock.
5. SALIENT DATES AND TIMES
The salient dates and times of the listing and unbundling of the Adcock
unbundled shares on the JSE are as follows:
Tiger Brands circular (including the issue of the notice for Tuesday, 29 July
the Tiger Brands general meeting) and the Adcock pre-listing 2008
statement posted to shareholders
Last day for lodging of forms of proxy for the general Tuesday, 12 August
meeting by 10h00 2008
General meeting of shareholders at 10h00 Thursday, 14 August
2008
Results of the general meeting announced on SENS Thursday, 14 August
2008
Results of the general meeting published in the press Friday, 15 August
2008
Last day to trade in Tiger Brands shares on the JSE to Friday, 22 August
participate in the unbundling 2008
Tiger Brands shares trade "ex" the entitlement to the Adcock Monday, 25 August
unbundled shares from the commencement of business 2008
Listing of Adcock on the JSE under the JSE code AIP and ISIN Monday, 25 August
of ZAE000123436 from the commencement of business 2008
Record date to participate in the unbundling Friday, 29 August
2008
Adcock share certificates will be posted by registered post Monday, 1 September
(at the risk of the certificated shareholders concerned) to 2008
certificated shareholders, and dematerialised shareholders
will have their accounts at their CSDP or broker updated
Note: The above dates and times are indicative only and subject to change. Any
changes to the above dates and times will be released on SENS and published in
the press.
Tiger Brands ordinary shareholders may not dematerialise or re-materialise their
Tiger Brands ordinary shares between Monday, 25 August 2008 and Friday, 29
August 2008, both days inclusive.
6. ADCOCK CAPITAL STRUCTURE
Adcock will be listed and unbundled with a total net debt of approximately R250
million.
7. PRO FORMA FINANCIAL EFFECTS OF THE UNBUNDLING
Following the unbundling, Tiger Brands shareholders will hold the Adcock
unbundled shares directly and there will accordingly be no material effect on
the aggregate earnings and underlying net asset value attributable to each
shareholder. However, aggregate dividends are likely to decline after the
unbundling. Tiger Brands has historically paid dividends covered two times by
headline earnings, whereas Adcock has indicated that, as a separate listed
entity, its dividend cover in relation to headline earnings will increase to
three times. Tiger Brands will continue to pay dividends two times covered by
headline earnings subsequent to the unbundling of Adcock.
7.1 Pro forma financial effects - financial year ended 30 September 2007
The table below sets out the pro forma financial effects of the unbundling on a
Tiger Brands shareholder in respect of a Tiger Brands share for the financial
year ended 30 September 2007. The pro forma financial information has been
prepared to illustrate the impact of the unbundling on the reported financial
information of Tiger Brands for the financial year ended 30 September 2007 had
the unbundling occurred on 1 October 2006 for income statement purposes and on
30 September 2007 for balance sheet purposes. The pro forma financial
information has been prepared for illustrative purposes only and because of its
nature may not give a true picture of Tiger Brands financial position, changes
in equity and results of its operations or cash flows.
Before the After the Percentage
unbundling(1) unbundling(4) change
Per Tiger Brands share (cents)
Basic earnings(2) 1 425.7 1 048.7 (26.4)
Headline earnings(2) 1 283.0 856.0 (33.3)
Net asset value(3) 3 664.6 3 470.1 (5.3)
Tangible net asset value(3) 2 394.2 2 348.4 (1.9)
Notes:
1. Based on the published audited annual results for the financial year ended
30 September 2007.
2. Basic earnings per share and headline earnings per share are based on 157.3
million shares, being the weighted average number of shares in issue
(excluding treasury shares as well as shares held by certain empowerment
trusts which are eliminated on consolidation) for the financial year ended
30 September 2007.
3. Net asset value per share and tangible net asset value per share are based
on 157.8 million shares, being the total number of shares in issue of 172.3
million less treasury shares of 8.6 million and shares held by the
empowerment trusts of 5.9 million.
4. Information included in the "After the unbundling" column excludes Adcock`s
contribution to basic and headline earnings per share for the financial
year ended 30 September 2007 and to net asset value per share and tangible
net asset value per share at 30 September 2007.
7.2 Pro forma financial effects - 6 months ended 31 March 2008
The table below sets out the pro forma financial effects of the unbundling on a
Tiger Brands shareholder in respect of a Tiger Brands share for the interim 6
months ended 31 March 2008. The pro forma financial information has been
prepared to illustrate the impact of the unbundling on the reported financial
information of Tiger Brands for the interim 6 months ended 31 March 2008 had the
unbundling occurred on 1 October 2007 for income statement purposes and on 31
March 2008 for balance sheet purposes. The pro forma financial information has
been prepared for illustrative purposes only and because of its nature may not
give a true picture of Tiger Brands financial position, changes in equity and
results of its operations or cash flows.
Before the After the Percentage
unbundling(1) unbundling(4) change
Per Tiger Brands share (cents)
Basic earnings(2) 690.8 502.7 (27.2)
Headline earnings(2) 756.6 568.5 (24.9)
Net asset value(3) 3 942.7 3 601.2 (8.7)
Tangible net asset value(3) 2 894.3 2 553.6 (11.8)
Notes:
1. Based on the published unaudited interim results for the 6 months ended 31
March 2008.
2. Basic earnings per share and headline earnings per share are based on 157.9
million shares, being the weighted average number of shares in issue
(excluding treasury shares as well as shares held by certain empowerment
trusts which are eliminated on consolidation) for the 6 months ended 31
March 2008.
3. Net asset value per share and tangible net asset value per share are based
on 157.9 million shares, being the total number of shares in issue of 172.4
million less treasury shares of 8.6 million and shares held by the
empowerment trusts of 5.9 million.
4. Information included in the "After the unbundling" column excludes Adcock`s
contribution to basic and headline earnings per share for the 6 months
ended 31 March 2008 and to net asset value per share and tangible net asset
value per share at 31 March 2008.
The full pro forma financials for the financial year ended 30 September 2007 and
the interim results for the 6 months ended 31 March 2008 are available on the
website of Tiger Brands (www.tigerbrands.com).
8. DIRECTORS` OPINION AND RECOMMENDATION
The directors have considered the terms and conditions of the unbundling and are
of the opinion that the unbundling will ultimately enhance shareholder value for
Tiger Brands shareholders. Accordingly, the directors of Tiger Brands are in
favour of the unbundling and intend to vote, in respect of any Tiger Brands
shares held by them at the date of the general meeting, in favour of the
resolutions necessary to approve and implement the unbundling and the amendments
to the Tiger Brands share option and share purchase schemes. The directors
recommend that shareholders also vote in favour of such resolutions.
The directors have considered the salient terms and conditions of the Adcock
share incentive schemes and intend to vote, in respect of the Tiger Brands
shares held by them, in favour of the resolutions necessary to adopt the Adcock
share incentive schemes. Accordingly, the directors recommend that shareholders
also vote in favour of such resolutions.
9. GENERAL MEETING
A general meeting of Tiger Brands shareholders will be held at the registered
office of Tiger Brands at 10h00 on Thursday, 14 August 2008 for the purpose of
considering and, if deemed fit, passing, with or without modification, the
resolutions necessary to approve and implement the unbundling and the amendments
to the Tiger Brands share option and share purchase schemes, as well as to adopt
the Adcock share incentive schemes.
10. FOREIGN SHAREHOLDERS
Foreign shareholders may be affected by the unbundling having regard to
prevailing laws in their relevant jurisdictions. Such foreign shareholders
should inform themselves about and observe any applicable legal requirements of
such jurisdictions in relation to all aspects of the proposed transaction that
may affect them. It is the responsibility of each foreign shareholder to satisfy
himself as to the full observation of the laws and regulatory requirements of
the relevant foreign jurisdiction in connection with the unbundling, including
the obtaining of any governmental, exchange or other consents or the making of
any filings which may be required, the compliance with other necessary
formalities and the payment of any issue, transfer or other taxes or other
requisite payments due in such jurisdiction. The unbundling is governed by the
laws of South Africa and is subject to any applicable laws and regulations,
including the exchange control regulations. Any Tiger Brands shareholder who is
in doubt as to his position with respect to the unbundling in any jurisdiction,
including, without limitation, his tax status, should consult an appropriate
independent professional adviser in the relevant jurisdiction without delay.
Foreign shareholders are reminded that they may dispose of their Tiger Brands
shares prior to the last date to trade in which case they will not participate
in the unbundling.
11. CIRCULAR TO SHAREHOLDERS
A circular, including the notice convening the general meeting, together with
the Adcock pre-listing statement, which documents contain full details of the
unbundling, is being posted to shareholders on Tuesday, 29 July 2008. Copies of
these documents may be obtained during normal business hours from Tuesday, 29
July 2008 until Friday, 29 August 2008 (both days inclusive), at the following
addresses:
Tiger Brands: 3010 William Nicol Drive, Bryanston, 2021;
UBS South Africa (Proprietary) Limited: 64 Wierda Road East, Wierda Valley,
Sandton, 2196;
Computershare Investor Services (Proprietary) Limited: 70 Marshall Street,
Johannesburg, 2001; and
JP Morgan Equities Limited: 1 Fricker Road, Corner Hurlingham Road, Illovo,
2196.
12. WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the cautionary announcement dated 6 November 2007,
in which Tiger Brands announced its intention to separately list and unbundle
its healthcare interests on the JSE. Further to the disclosure detailed above
and release of the abridged pre-listing statement of Adcock on SENS on 21 July
2008, shareholders are no longer required to exercise caution in their dealings
in the securities of the Company.
Bryanston
21 July 2008
Financial adviser
UBS South Africa (Pty) Ltd
Independent SponsorJP Morgan Equities Limited
Attorneys
Edward Nathan Sonnenbergs
Date: 21/07/2008 08:01:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
