| Thu 20 Aug 2009, 17:15 | | MYD - Myriad - Specific Repurchase Of Shares/Directors` Dealings/Changes To The |
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MYD
MYD
MYD - Myriad - Specific Repurchase Of Shares/Directors` Dealings/Changes To The
Board Of Directors/Withdrawal Of Cautionary
Myriad Medical Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2006/006371/06)
Share code: MYD ISIN: ZAE000085825
("Myriad" or the "Company")
SPECIFIC REPURCHASE OF SHARES
DIRECTORS` DEALINGS
CHANGES TO THE BOARD OF DIRECTORS
WITHDRAWAL OF CAUTIONARY
INTRODUCTION
The board wishes to announce that one of the company`s anchor shareholders and
original funders, Blackstar Group Plc ("Blackstar"), has initiated a specific
repurchase of shares from Myriad founders Jacob (Jack) and Reuben Shapiro ("the
Shapiros"). The Shapiros are currently the CEO and COO of the Company.
Blackstar is a London-listed investment holding company, which has invested in
excess of R1 billion in South Africa in various sectors ranging from steel,
chemicals, resources to timber.
The necessary funding for the repurchase has been secured subject to conditions
usual for such funding. Irrevocable undertakings in favour of the repurchase
have been received from shareholders of the company representing in excess of
70% of shareholders.
In line with Blackstar`s proposal, the board has therefore reached the
following agreement with the Shapiros:
- that subject to the conditions set out below, the company will repurchase the
Shapiros entire shareholding in the Company constituting 34 million Myriad
ordinary shares held directly and indirectly at a price of 85 cents per share
("the specified shares"), which represents a premium of 2,5% to NAV as at 31 May
2009.
- that on, and subject to, the implementation of the repurchase, Jack and
Reuben Shapiro will resign as executive directors of the company,
("the transaction").
RATIONALE FOR THE REPURCHASE AND CHANGES TO THE BOARD
Rationale
As founders of Myriad, the Shapiros have successfully implemented the
foundation and systems for the next stage of the development of the company and
its subsidiaries ("the Group").
Since inception, Myriad has consistently delivered strong revenue and profit
growth through its diverse range of products and by maintaining an
entrepreneurial focus within its divisions. As the Group is operationally run
in a decentralised manner, the board and management therefore believe the Group
would be best suited going forward with a lower head office cost base. The
corporate structure of support and centralised systems to the divisions will
remain in place.
Management changes
Blackstar has committed to play an active role in the strategic management of
the company including the judicious roll-out of acquisitions to build critical
mass within Myriad. In line with this, Blackstar will second one of its
executives to Myriad to act as Chief Executive Officer and to join the current
financial director, Barry Budler, in providing guidance and structure to the
operational teams.
William Marshall-Smith from Blackstar, a chartered accountant with significant
experience in merger and acquisition activity, management of investments and
corporate strategy, will become the acting Chief Executive Officer. His
appointment will take effect upon implementation of the transaction. The
Shapiros will remain available to the Group in a consultative role in order to
ensure a smooth handover.
A permanent CEO will be appointed once the Group reaches the appropriate
critical mass to support a higher head office cost base.
Board changes
On completion of the repurchase, Philip Vallet and Mark Nielsen will resign as
non-executive directors. The board wishes to thank them for their valuable
contributions over the last three years.
Simultaneously, Andrew Bonamour, the CEO of Blackstar, will join the Myriad
board as a non-executive director. The board welcomes both him and
Marshall-Smith in their new roles.
Acknowledgement
The board wishes to acknowledge the huge contribution the Shapiros have made to
the Group since its creation in 2006.
Myriad remains one of the only consolidated Groups of leading brands and
agencies in the capex and consumables sector of the medical devices industry.
The Group has also consistently delivered and posted strong results.
CONDITIONS PRECEDENT
The repurchase is subject to the fulfilment of, inter alia, the following
conditions precedent:
- all regulatory approvals, including but not limited to the approval of the
JSE Limited;
- the repurchase being approved in terms of a special resolution of the Myriad
shareholders, other than the Shapiros.
CANCELLATION OF SHARES AND DIRECTORS` DEALINGS
Following the repurchase, the specified shares will be cancelled and Myriad
will make application to the JSE Limited for the termination of the listing of
the specified shares. The agreement to sell the specified shares constitutes
directors dealings in terms of the JSE Listings Requirements and the requisite
clearance to deal has been obtained.
FINANCIAL EFFECTS
The unaudited pro forma financial effects for which the board of Myriad is
responsible are presented for illustrative purposes only and may not fairly
present the company`s financial position following the implementation of the
repurchase.
The table below sets out the unaudited pro forma financial effects of the
repurchase based on the reviewed preliminary condensed annual financial results
of the company for the twelve months ended 31 May 2009.
Before share
repurchase
Reviewed
31 May Repurchase
2009 adjustments
Earnings per share (cents) 12.0 (0.6)
Headline earnings per share (cents) 12.0 (0.6)
Net asset value per share (cents) 82.9 (3.0)
Net tangible asset value per share (cents) 39.6 (12.5)
Weighted average number of shares in issue 189,316,410 (34,000,000)
After the Percentage
repurchase change
Earnings per share (cents) 11.4 (5.0%)
Headline earnings per share (cents) 11.4 (5.0%)
Net asset value per share (cents) 79.9 (3.6%)
Net tangible asset value per share (cents) 27.1 (31.6%)
Weighted average number of shares in issue 155,316,410 (17.9%)
Notes and assumptions:
1. The pro forma earnings, headline earnings, net asset value and tangible net
asset value per share are based on Myriad`s published reviewed preliminary
condensed results for the year ended 31 May 2009 after taking into account
the following adjustments:
the repurchase of 34,000,000 Myriad ordinary shares at a price of 85c;
debt raising fees, guarantee fees and Blackstar secondment costs;
the costs of the circular, fairness opinion and other consulting fees
debited to equity;
long-term debt of R34,000,000 raised in order to finance the above
repurchase of shares, related costs, including am amount of R1.5 million in
respect of the notice period and R1.5 million in terms of the restraint
payments to the Shapiros;
interest on the above loan at 12.6% per annum, with the loan being paid
back quarterly over a four-year period.
2. The pro forma earnings figures illustrate the possible financial effects if
the repurchase had taken place on 1 June 2008.
3. The pro forma net asset value and tangible net asset value figures have been
based on the assumption that the repurchase had taken place 31 May 2009.
CIRCULAR
Myriad will send a circular to shareholders including a notice of general
meeting for the purpose of considering and approving all resolutions necessary
to implement the repurchase and where necessary, ancillary matters.
The repurchase shall be subject to inclusion of a statement by the board of
directors of Myriad in the circular confirming whether the repurchase is fair
insofar as shareholders (excluding the Shapiros) of Myriad are concerned and
that the board of directors have been so advised by an independent expert
acceptable to the JSE Limited.
WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the cautionary announcement dated 30 July 2009 and
are advised that caution is no longer required to be exercised when dealing in
the security`s of the company.
Johannesburg
20 August 2009
Transactional Designated Advisor & Independent Expert
Java Capital (Pty) Ltd
Transaction Arranger
Blackstar Group (Pty) Ltd
Transactional Legal Adviser
EdwardNathan Sonnenbergs
Designated Advisor
Sasfin Capital
(a division of Sasfin Bank Limited)
Reporting Accountants
Mazars Moores Rowald
Date: 20/08/2009 17:15:01 Produced by the JSE SENS Department.
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