| Fri 16 Oct 2009, 14:00 | | TBS - Tiger Brands Phase II Black Economic Empowerment Transaction |
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TBS
TIIH
TBS - Tiger Brands Phase II Black Economic Empowerment Transaction
Tiger Brands Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
("Tiger Brands" or "the Company")
TIGER BRANDS PHASE II BLACK ECONOMIC EMPOWERMENT TRANSACTION
GENERAL MEETING UPDATE
1. INTRODUCTION
Shareholders are referred to the announcement detailing the results of the
general meeting in relation to the Tiger Brands Phase II Black Economic
Empowerment Transaction ("Phase II BEE Transaction")which was released on SENS
on Monday, 12 October 2009, and was published in the press on Tuesday, 13
October 2009.
As previously announced, the Phase II BEE Transaction was approved at the
general meeting, except for the resolutions relating to the subscription and
issue of shares to Mapitso Consortium Investments(Proprietary) Limited, through
its ring-fenced special purpose vehicle ("SPV"), Mapitso Funding SPV
(Proprietary) Limited, which were withdrawn at the commencement of the meeting
as it was abundantly clear that the number of votes would be insufficient for
the resolutions to be passed with the necessary 75% majorities. Accordingly, the
total number of Tiger Brands ordinary shares to be issued pursuant to the Phase
II BEE Transaction will be equal to 9.09% (as opposed to the original proposed
10%) of Tiger Brands` enlarged issued share capital post implementation of the
Phase II BEE Transaction (net of the 10 326 758 treasury shares held by Tiger
Consumer Brands Limited)( "Tiger Brands` enlarged issued share capital").
Shareholders are hereby informed that all the special resolutions relating to
the Phase II BEE Transaction have been registered and it is envisaged that the
relevant shares will be listed on Tuesday, 20 October 2009 as previously
communicated.
The actual percentage shareholding which each participant will hold in Tiger
Brands` ordinary issued share capital post implementation of the Phase II BEE
Transaction is as follows:
- Brimstone Investment Corporation Limited (through its SPV): 1.01% of Tiger
Brands` enlarged issued share capital;
- The Tiger Brands Black Managers Trust No. II: 1.58% of Tiger Brands`
enlarged issued share capital. This is in addition to the shares already
held by the Tiger Brands Black Managers Trust in terms of Tiger Brands`
phase I black economic empowerment transaction implemented in October 2005
("Phase I BEE Transaction"), which represent a further 2.45% of Tiger
Brands` enlarged issued share capital. This results in a total combined
shareholding of 4.03% in Tiger Brands` enlarged issued share capital;
- The Tiger Brands General Staff Share Trust: 0.44% of Tiger Brands` enlarged
issued share capital. This is in addition to the shares already held by the
Tiger Brands General Staff Share Trust in terms of the Phase I BEE
Transaction, which represent a further 0.31% of Tiger Brands` enlarged
issued share capital. This results in a total combined shareholding of
0.75% in Tiger Brands` enlarged issued share capital;
- The Thusani Trust (through its SPV): 1.01% of Tiger Brands` enlarged issued
share capital. This is in addition to the shares already indirectly held by
Thusani Trust in terms of the Phase I BEE Transaction, which represent a
further 0.85% of Tiger Brands` enlarged issued share capital. This results
in a total combined shareholding of 1.86% in Tiger Brands` enlarged issued
share capital; and
- The Tiger Brands Foundation (through its SPV): 5.05% of Tiger Brands`
enlarged issued share capital.
This announcement details the resultant impact on the percentage effective black
ownership in Tiger Brands, the cost of the transaction to shareholders and the
updated pro forma financial effects of the Phase II BEE Transaction.
2. EFFECTIVE BLACK SHAREHOLDING IN THE SOUTH AFRICAN OPERATIONS OF TIGER BRANDS
EmpowerLogic (Proprietary) Limited, an accredited empowerment status
verification agency, has conducted an initial scoring of Tiger Brands` black
ownership initiatives in accordance with Code 100 of the Codes of Good Practice
on BEE, issued by the Department of Trade and Industry in terms of section 9 of
the Broad Based Black Economic Empowerment Act, 2003 ("BEE Codes"). It is
estimated that, after implementation of the Phase II BEE Transaction, Tiger
Brands will have an effective black ownership of approximately 28.9%, if
mandated investments and foreign operations, as defined in the BEE Codes, are
excluded from Tiger Brands` enlarged issued share capital.
3. COST TO SHAREHOLDERS
The cost of the Phase II BEE Transaction, calculated in accordance with the
statement on share based payments in terms of International Financial Reporting
Standards ("IFRS 2"), is R299.6 million and equates to 1.2% of the Tiger Brands
market capitalisation (net of treasury shares) of R25.8 billion on the JSE
Limited ("JSE") as at Friday, 28 August 2009, being the last practicable date as
per the circular issued to Tiger Brands shareholders on Wednesday, 16 September
2009. It is important to note that this cost will be charged to the Company`s
income statement, part upfront during the financial year ending 30 September
2010 and part over a number of subsequent years, and does not reflect a cash
cost.
4. UNAUDITED PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects set out below have been prepared to
assist Tiger Brands ordinary shareholders to assess the impact of the Phase II
BEE Transaction on the Earnings Per Share ("EPS"), Headline Earnings Per Share
("HEPS"), Diluted Earnings Per Share ("Diluted EPS"), Diluted Headline Earnings
Per Share ("Diluted HEPS"), Net Asset Value ("NAV") and Tangible Net Asset Value
("TNAV") per Tiger Brands ordinary share. The material assumptions are set out
in the notes following the table. These pro forma financial effects have been
disclosed in terms of the Listings Requirements of the JSE ("Listings
Requirements") and do not constitute a representation of the future financial
position of Tiger Brands on implementation of the Phase II BEE Transaction. The
pro forma financial effects are the responsibility of the board and are provided
for illustrative purposes only, and, because of their nature, may not fairly
present Tiger Brands` financial position, changes in its equity, results of
operations or cashflows.
Before implementation of After implementation of Percentage
the Phase II BEE the Phase II BEE change
Transaction Transaction
(cents) (cents) (%)
EPS 631.2 516.7 (18.1)
HEPS 627.3 512.8 (18.3)
Diluted EPS 628.4 514.4 (18.1)
Diluted HEPS 624.5 510.6 (18.2)
NAV 3 773.3 3 777.2 0.1
TNAV 2 720.9 2 730.1 0.3
Notes:
- The EPS, HEPS, Diluted EPS, Diluted HEPS, NAV and TNAV per Tiger Brands
ordinary share "Before the implementation of the Phase II BEE Transaction" are
based on the published unaudited interim results of Tiger Brands for the six
months ended 31 March 2009 ("the Interim Results").
- The EPS, HEPS, Diluted EPS and Diluted HEPS "After the implementation of the
Phase II BEE Transaction" are based on the assumption that the Phase II BEE
Transaction was implemented on 1 October 2008.
- The NAV and TNAV per Tiger Brands ordinary share "After the implementation of
the Phase II BEE Transaction" are based on the assumption that the Phase II BEE
Transaction was implemented on 31 March 2009.
- The EPS and HEPS "After the implementation of the Phase II BEE Transaction"
are based on 157 654 800 weighted average number of Tiger Brands ordinary shares
in issue (156 863 000 weighted average number of Tiger Brands ordinary shares in
issue as per the Interim Results (net of treasury and empowerment shares) plus
791 800 Tiger Brands ordinary shares issued to the trustees of the Tiger Brands
General Staff Share Trust in terms of the Phase II BEE Transaction).
- The Diluted EPS and Diluted HEPS "After the implementation of the Phase II BEE
Transaction" are based on 158 345 800 weighted average diluted number of Tiger
Brands ordinary shares (157 554 000 weighted average diluted number of Tiger
Brands ordinary shares in issue as per the Interim Results (net of treasury and
empowerment shares) plus 791 800 Tiger Brands ordinary shares issued to the
trustees of the Tiger Brands General Staff Share Trust in terms of the Phase II
BEE Transaction).
- The NAV and TNAV per Tiger Brands ordinary share "After the implementation of
the Phase II BEE Transaction" are based on 157 811 800 Tiger Brands ordinary
shares in issue (157 020 000 Tiger Brands ordinary shares in issue as per the
Interim Results (net of treasury and empowerment shares) plus 791 800 Tiger
Brands ordinary shares issued to the trustees of the Tiger Brands General Staff
Share Trust in terms of the Phase II BEE Transaction).
Bryanston
16 October 2009
Investment bank and transaction sponsor
Standard Bank
Attorneys and corporate law advisers
Edward Nathan Sonnenbergs
Independent reporting accountants and auditors
Ernst & Young
Sponsor
J.P. Morgan Equities Limited
Independent expert to Tiger Brands
PricewaterhouseCoopers Corporate Finance (Pty) Limited
Empowerment adviser to Tiger Brands
EmpowerLogic
Transactional Communication Adviser
Brunswick
Tel: + 27 11 502 7300
Anne Dunn 082 448 2684
Taryn Wulfsohn 083 273 1301
Date: 16/10/2009 14:00:01 Produced by the JSE SENS Department.
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