| Wed 14 Jul 2010, 10:52 | | PLD - Paladin Capital Limited - Company Announcement |
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PLD
PLD
PLD - Paladin Capital Limited - Company Announcement
PALADIN CAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2007/032836/06)
Share Code: PLD
ISIN Number: ZAE000138970
("Paladin" or "the Company")
ANNOUNCEMENT REGARDING THE JOINT ANNOUNCEMENT OF THE FIRM INTENTION OF
IMPERIAL HOLDINGS LIMITED TO MAKE AN OFFER TO ACQUIRE THE ENTIRE ISSUED SHARE
CAPITAL OF CIC HOLDINGS LIMITED BY WAY OF A SCHEME OF ARRANGEMENT
1. INTRODUCTION
Shareholders are referred to the joint announcement released by CIC
Holdings Limited ("CIC") and Imperial Holdings Limited ("Imperial") on
Tuesday, 13 July 2010 ("the Firm Intention announcement"), with regards
to the firm intention of Imperial to make an offer to acquire the entire
issued share capital of CIC, by way of a scheme of arrangement, in terms
of section 311 of the South African and/or the Namibian Companies Act, No
61 of 1973, as amended, as may be applicable ("the Scheme"), or at
Imperial`s discretion, an offer in terms of section 440K of the South
African Companies Act and/or section 314 of the Namibian Companies Act,
as may be applicable ("the Firm Intention Offer").
Shareholders are further advised that Paladin is the beneficial holder of
123 470 457 ordinary shares in CIC and has signed an irrevocable
undertaking to vote in favour of the implementation of the Scheme.
In the event that the Scheme becomes unconditional and is implemented,
Paladin will dispose of its shares in CIC to Imperial for the
consideration of R2.87 per share, in accordance with the Scheme ("the
Disposal").
2. CLASSIFICATION OF THE DISPOSAL
The Disposal, if implemented, constitutes a Category 2 transaction in
terms of the Listings Requirements of the JSE Limited ("JSE").
3. THE EFFECTIVE DATE OF THE DISPOSAL
The effective date of the Disposal, if implemented, will be the date that
the Scheme becomes operative.
4. BUSINESS CARRIED ON BY CIC
CIC operates within the Fast Moving Consumer Goods industry through
distributor agreements with blue chip manufacturers, both locally and
internationally. Its service offering includes wholesaling,
merchandising, warehousing, distribution, debtors administration,
staffing and security solutions. The CIC Group has facilities in the main
centres throughout Namibia, Botswana, Swaziland, Mozambique and South
Africa.
5. DISPOSAL CONSIDERATION
The scheme consideration payable by Imperial to Paladin, in the event
that the Scheme becomes unconditional and is implemented, in respect of
Paladin`s 123 470 457 ordinary shares in CIC will be a total
consideration of R354 360 211.59 or the Namibian Dollar equivalent, to
the extent that same may be applicable, equalling R2.87 per share or the
Namibian Dollar equivalent, to the extent that same may be applicable.
6. RATIONALE FOR THE DISPOSAL
CIC has been a star investment for Paladin, showing significant growth in
the last few years. However, management feel that CIC will benefit from
forming part of the Imperial group going forward. In addition, given
Paladin`s strategy to grow it`s educational investment division and to
take advantage of other attractive investment opportunities, management
believe that the proceeds on the sale of CIC can be reinvested in
opportunities that will facilitate further growth.
7. APPLICATION OF THE SALE PROCEEDS
The sale proceeds will be used by Paladin to grow Paladin`s educational
investment division and to take advantage of investment opportunities in
the market, as when same present themselves to Paladin.
8. PRO FORMA FINANCIAL INFORMATION
The Pro Forma financial effects of the Disposal are presented for
illustrative purposes only and because of their nature may not give a
fair reflection of the Company`s financial position nor of the effect on
future earnings after the Disposal.
Set out below are the unaudited Pro Forma financial effects of the
Disposal, based on the audited results for the year ended 28 February
2010. The directors of Paladin are responsible for the preparation of the
pro forma financial information.
Audited Unaudited Pro Change
before the Forma after
Disposal the Disposal
(cents)
(cents) (%)
Basic earnings per share 36.3 81.4 124.2
Basic headline earnings per 43.9 41.0 (6.6)
share
Recurring headline earnings 19.3 17.0 (11.9)
per share
Net asset value per share 175.7 211.5 20.4
Net tangible asset value per 175.7 211.5 20.4
share
Notes and assumptions:
1. The basic earnings per share and the basic headline earnings per
share figures in the "Pro Forma after the Disposal" column have been
calculated on the basis that the Disposal was effected on 1 March
2009 and the cash proceeds net of capital gains tax invested at an
average interest rate of 7.5% p.a. before taxation.
2. The net asset value per share and the tangible net asset value per
share figures in the "Pro Forma after the Disposal" column have been
calculated on the basis that the Disposal was effected on 28
February 2010.
3. The taxation rate applicable is assumed to be 28%.
4. The basic earnings per share and basic headline earnings per share
figures are calculated based on weighted average number of shares in
issue of 495 419 121 at 28 February 2010.
5. The net asset value per share and net tangible asset value per share
have been calculated based on 574 604 570 shares in issue as at 28
February 2010.
9. CONDITIONS PRECEDENT OF THE FIRM INTENTION OFFER AND THE SCHEME
The Disposal is subject to the implementation of the Scheme and
shareholders are referred to the Firm Intention announcement for a
detailed summary of the conditions precedent relevant to the Firm
Intention Offer and the Scheme.
10. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement released on SENS
on Tuesday, 8 June 2010, and are advised that as terms of the Firm
Intention Offer have been announced on SENS, caution is no longer
required to be exercised by shareholders when dealing in their
securities.
14 July 2010
Stellenbosch
Designated Advisor: QuestCo Sponsors (Pty) Limited
Corporate Advisor: PSG Capital (Pty) Limited
Date: 14/07/2010 10:52:01 Produced by the JSE SENS Department.
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