| Thu 7 Aug 2008, 16:51 | | CUH / BFS - Credit U / Blue - Announcement And Withdrawal Of Cautionary |
|
BFS CUH JCD
BFS CUH
CUH / BFS - Credit U / Blue - Announcement And Withdrawal Of Cautionary
CREDIT U HOLDINGS LIMITED
(formerly Kagisano Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2002/003827/06)
Share code: CUH & ISIN: ZAE000115085
("Credit U")
BLUE FINANCIAL SERVICES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/006595/06)
Share code: BFS & ISIN: ZAE000039681
("Blue")
ANNOUNCEMENT OF A FIRM OFFER BY BLUE TO ACQUIRE THE ENTIRE ORDINARY SHARE
CAPITAL OF CREDIT U NOT HELD BY CREDIT U`s SHARE INCENTIVE SCHEME AND WITHDRAWAL
OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
1.1 Further to the cautionary announcements published by Credit U on 13
June 2008 and 1 August 2008, shareholders of Credit U are advised that
Blue has submitted to the board of directors of Credit U a firm
intention to make an offer to acquire the entire issued ordinary share
capital of Credit U excluding the 2 250 000 treasury shares held by
the Employee Share Incentive Scheme (`the offer" or "the proposed
acquisition"). The offer entails that Credit U shareholders will be
offered 44.5 Blue ordinary shares for every 100 Credit U ordinary
shares held. Blue will issue 51 508 750 ordinary shares at an issue
price of 540 cents per share. The total purchase consideration will
therefore amount to R278 147 250, based on 115 750 000 Credit U
ordinary shares in issue. This effectively translates into a price of
240 cents per Credit U ordinary share. This represents a premium of
16% to the 30 day volume weighted average price per Credit U ordinary
share on 12 June 2008, being the date before the first cautionary
announcement in relation to the proposed acquisition.
1.2 The offer is subject to the conditions precedent set out in paragraph
3 below.
1.3 The offer will be effected by way of a scheme of arrangement ("the
scheme") in terms of section 311 of the Companies Act, 1973 (Act 61 of
1973), as amended ("the Companies Act") to be proposed by Blue between
Credit U and all its ordinary shareholders.
1.4 In the event of the scheme not being approved and implemented and
subject to Competition Commission and relevant regulatory approval,
Blue will make a conditional offer to Credit U shareholders in terms
of section 440 K of the Companies Act to acquire all their ordinary
shares in Credit U by offering 44.5 Blue ordinary shares for every 100
Credit U ordinary shares held. Blue will issue 51 508 750 ordinary
shares at an issue price of 540 cents per share. The total purchase
consideration will therefore amount to R278 147 250. This effectively
translates into a price of 240 cents per Credit U ordinary share.
1.5 This announcement summarises the information provided in the letter of
firm intention to make the offer addressed by Blue to Credit U`s board
dated 7 August 2008.
1.6 Blue owns no ordinary shares in Credit U.
2. THE OFFER
2.1 The scheme:
2.1.1 Blue will propose a scheme of arrangement between Credit U
and the Credit U ordinary shareholders ("scheme members"),
in terms of section 311 of the Companies Act, for the
purpose of acquiring the entire issued share capital of
Credit U excluding the 2 250 000 treasury shares held by the
Employee Share Incentive Scheme ("the Scheme"), by the issue
of 44.5 Blue shares for every 100 Credit U shares held ("the
scheme consideration").
2.1.2 The scheme consideration will entail that 51 508 750 Blue
ordinary shares will be issued by Blue at an issue price of
540 cents per share. The total purchase consideration will
therefore amount to a total value of R278 147 250.
2.1.3 22.25 of the Blue ordinary shares receivable by every scheme
member for every 100 Credit U ordinary shares held will be
pre-placed with Mr Dave van Niekerk (a shareholder and
executive director of Blue) for a cash consideration of 540
cents per Blue ordinary share amounting to R139.07 million
as partial settlement in cash of the scheme consideration.
Mr Dave van Niekerk ("the underwriter") has provided
confirmation to the Securities Regulation Panel ("SRP") that
he has sufficient cash resources to meet the R139.07 million
partial cash settlement obligation.
2.1.4 As far as the remaining 22.25 Blue ordinary shares are
concerned which will be receivable by scheme members for
every 100 Credit U ordinary shares held:
- 75% of the ordinary shareholders of Credit U have:
- irrevocably undertaken not to sell these shares for a period of 6
months after the effective date of the scheme,
- granted the underwriter a right of first refusal in respect of a
proposed sale of these shares at any time and in respect of every sale
opportunity during the period commencing on the first day of the
seventh month after the effective date of the scheme, and ending on
the last day of the twelfth month after the effective date of the
scheme, whereby the underwriter will have 5 working days to accept the
purchase of these shares, and
- undertaken to elect the cash alternative of 540 cents per Blue
ordinary share in respect of their remaining holdings of 22.25 Blue
ordinary shares for every 100 Credit U ordinary shares held if
additional underwriters are secured as stipulated in the next
paragraph;
- Blue will use its best endeavours, before 15 September 2008, to obtain
irrevocable undertakings from another selected party or parties who are
prepared to acquire such Blue ordinary shares at 540 cents per share. If
and when such parties are secured, and they have provided cash confirmation
in respect of R139.07 million to the satisfaction of the SRP, an
announcement will be made that the proposed scheme will be amended prior to
the circular to scheme members being formally approved by the JSE Limited
("JSE") and SRP and posted to scheme members, in the following respects:
The name/s of the additional underwriters;
- That the underwriters have provided confirmation to the SRP that they
have sufficient cash resources to meet their obligations;
- In terms of the scheme, scheme members (with the exception of those
referred to below) will be entitled to elect to place their ordinary
shares with such additional underwriters at 540 cents per Blue share
on the effective date of the scheme;
- 75% of the ordinary shareholders of Credit U have irrevocably
undertaken to elect the cash alternative of 540 cents per Blue share
referred to above in respect of their remaining holdings of 22.25 Blue
ordinary shares for every 100 Credit U ordinary shares held.
2.1.5 The incumbent trustees of the Trust set up for purposes of
the Employees Share Incentive Scheme holding the 2 250 000
Credit U treasury shares as referred to above will be
replaced by trustees to be appointed by Blue once all the
suspensive conditions have been fulfilled;
2.1.6 Upon implementation of the scheme, Credit U will become a
wholly-owned subsidiary of Blue and its listing on the
Alternative Exchange of the JSE will be terminated.
2.2 The substitute offer:
2.2.1 In the event that the Scheme fails or does not become
operative, Blue will make a conditional offer to Credit U
ordinary shareholders to acquire all their ordinary shares
excluding the 2 250 000 treasury shares held by the Employee
Share Incentive Scheme) by the issue of 44.5 Blue ordinary
shares for every 100 Credit U ordinary shares held ("offer
consideration") in terms of section 440 of the Companies Act
which will be conditional on acceptance by shareholders of
Credit U holding no less than 90% of the total issued
ordinary shares of Credit U, and be on such terms that Blue
will invoke the provisions of section 440K of the Companies
Act to acquire the shares of the remaining shareholders, if
the offer is accepted by the holders of no less than 90% of
the issued ordinary shares of Credit U ("the substitute
offer").
2.2.2 The offer consideration will entail that 51 508 750 Blue
ordinary shares will be issued by Blue at an issue price of
540 cents per share. The total purchase consideration will
therefore amount to a total value of R278 147 250.
2.2.3 22.25 of the Blue ordinary shares receivable by every Credit
U shareholder for every 100 Credit U ordinary shares held
will be pre-placed with the underwriter for a cash
consideration of 540 cents per Blue share amounting to
R139.07 million as partial settlement in cash of the offer
consideration. The underwriter has provided confirmation to
the SRP that he has sufficient cash resources to meet the
R139.07 million partial cash settlement obligation.
2.2.4 As far as the remaining 22.25 Blue ordinary shares are
concerned which will be receivable by Credit U ordinary
shareholders for every 100 Credit U ordinary shares held:
- 75% of the shareholders of Credit U have:
- irrevocably undertaken not to sell these shares for a period of 6
months after the effective date of the substitute offer,
- granted the underwriter a right of first refusal in respect of a
proposed sale of these shares at any time and in respect of every
sale opportunity during the period commencing on the first day of
the seventh month after the effective date of the substitute
offer, and ending on the last day of the twelfth month after the
effective date of the substitute offer, whereby the underwriter
will have 5 working days to accept the purchase of these shares,
and
- undertaken to elect the cash alternative of 540 cents per Blue
ordinary share in respect of their remaining holdings of 22.25
Blue ordinary shares for every 100 Credit U ordinary shares held
if additional underwriters are secured as stipulated in the next
paragraph;
- Blue will use its best endeavours, before 15 September 2008, to obtain
irrevocable undertakings from another selected party or parties who
are prepared to acquire such Blue shares at 540 cents per share. If
and when such parties are secured, and they have provided cash
confirmation in respect of R139.07 million to the satisfaction of the
SRP, an announcement will be made that the substitute offer will be
amended prior to the circular to scheme members being formally
approved by the JSE and SRP and posted to ordinary CU shareholders, in
the following respects:
- The name/s of the additional underwriters;
- That the additional underwriters have provided confirmation to
the SRP that they have sufficient cash resources to meet their
obligations;
- In terms of the substitute offer, Credit U shareholders (with the
exception of those referred to below) will be entitled to elect
to place their ordinary shares with such additional underwriters
at 540 cents per Blue share on the effective date of the
substitute offer;
- 75% of the ordinary shareholders of Credit U have irrevocably
undertaken to elect the cash alternative of 540 cents per Blue
share referred to above in respect of their remaining holdings of
22.25 Blue ordinary shares for every 100 Credit U ordinary shares
held.
2.2.5 The incumbent trustees of the Trust set up for purposes of
the Employees Share Incentive Scheme holding the 2 250 000
Credit U treasury shares as referred to above will be
replaced by trustees to be appointed by Blue once all the
suspensive conditions have been fulfilled.
2.2.6 If the scheme becomes operative, the substitute offer will
not be implemented.
3. CONDITIONS PRECEDENT
3.1 Blue:
- has completed a due diligence investigation into the affairs of
Credit U to its satisfaction;
- has obtained the necessary board approval to proceed with the offer;
- will not require shareholder approval for the issue of ordinary shares
for the proposed acquisition.
3.2 The scheme shall inter alia be subject to the following conditions
precedent:
- the approval of the scheme by a majority of Credit U ordinary
shareholders entitled to vote ("scheme members") at the meeting of
scheme members ("the scheme meeting") convened by the High Court of
South Africa ("the Court"), representing not less than three-fourths
(75%) of the votes exercisable by scheme members present and voting,
either in person or by proxy, at a scheme meeting;
- Credit U obtaining the requisite regulatory approvals, including
without limitation, the approval of the SRP and the JSE of the
documentation relating to the scheme and the proposed acquisition;
- the scheme being sanctioned by the Court in terms of the Companies
Act;
- a certified copy of the Order of Court sanctioning the scheme being
lodged with, and registered by, the Registrar of Companies in terms of
the Companies Act; and
- the unconditional approval of the scheme or the proposed acquisition
by the Competition Authorities.
3.3 The substitute offer shall be subject to the following conditions:
- acceptances being received in respect of a minimum of 90% of all the
issued ordinary shares of Credit U; and
- approval of the substitute offer by all regulatory authorities,
including the Competition Authorities.
4. FUNDING OF THE PROPOSED ACQUISITION
The underwriter has agreed to acquire 25 754 375 Blue ordinary shares
issued as contemplated in 2.1 or 2.2 at 540 cents per Blue share. In terms
of Rule 2.3.2 (b) and Rule 21.7 of the SRP Code, the underwriter has
provided confirmation to the SRP that he has sufficient cash resources to
satisfy the cash consideration of R139.07 million payable in terms of the
Transaction.
5 APPROVALS, CONSENTS AND UNDERTAKINGS RECEIVED
The following approvals, consents and undertakings have been received:
5.1 the offer and the proposed acquisition was in principle approved by
the board of directors of Credit U, subject to paragraph 6 below;
5.2 Credit shareholders holding in excess of 75% of the issued ordinary
shares of Credit U have irrevocably undertaken to vote in favour of
the scheme, not to sell their Blue ordinary shares for a period of 6
months after the effective date, granted the underwriter a right of
first refusal in respect of the sale of the shares and to elect the
cash alternative in respect of their remaining Blue ordinary shares;
5.3 all directors of Credit U, with the exception of William Marshall-
Smith, have agreed to resign as members of the Credit U board at the
conclusion of the proposed acquisition or at any time thereafter as
indicated by Blue.
6. OPINIONS AND RECOMMENDATIONS
In terms of the SRP Code, the board of Credit U have appointed Charles
Orbach & Company Corporate Finance (Pty) Limited to advise on the proposed
acquisition and to make appropriate recommendations to the Credit U board
for the benefit of Credit U ordinary shareholders.
7. DOCUMENTATION AND SALIENT DATES
Further details of the scheme and the substitute offer will be included in
a circular to Credit U ordinary shareholders, which will, subject to the
approval of the JSE and the SRP, be dispatched to Credit U ordinary
shareholders in due course.
Salient dates in relation to the scheme will be published prior to the
issuing of the abovementioned documentation.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS
Credit U ordinary shareholders are advised that all the cautionary
announcements referred to in the announcement of 1 August 2008 are hereby
withdrawn.
Johannesburg
7 August 2008
Designated Adviser and
corporate Adviser to Credit U
-LOGO- Designated Adviser and
EXCHANGE SPONSORS Corporate Adviser to BLUE
- LOGO -
PSG CAPITAL
Attorneys to Credit U
-LOGO-
EDELSTEIN BOSMAN
Date: 07/08/2008 16:51:16 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.
