| Fri 16 Jul 2010, 16:42 | | PSG - PSG Group Limited - Announcement regarding the joint announcement of the |
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PSG
PSG
PSG - PSG Group Limited - 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
PSG GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1970/008484/06)
Share Code: PSG
ISIN Number: ZAE000013017
("PSG" or "the Company" or "the Group")
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 regard 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 Capital Limited ("Paladin"),
a subsidiary of the Group, 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.
The Group owned 80.62% in Paladin at 28 February 2010.
6 RATIONALE FOR THE DISPOSAL
CIC has been a star investment for Paladin, showing significant growth in
the last few years. However, management feels 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 believes
that the proceeds on the sale of CIC can be reinvested in opportunities
that will facilitate further growth for Paladin and the Group.
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 Group`s consolidated 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 PSG`s audited consolidated results for the year ended 28
February 2010. The directors of PSG 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 225.8 339.8 50.5
earnings per
share
Basic 249.2 241.9 (2.9)
headline
earnings per
share
Recurring 207.4 201.6 (2.8)
headline
earnings per
share
Net asset 1 764.7 1 873.3 6.2
value per
share
Net tangible 1 297.1 1 405.7 8.4
asset value
per share
Notes and assumptions:
1 The basic earnings per share, the basic headline earnings per share
and the recurring 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 were invested at an average interest rate of
7.5% p.a. before taxation.
2 The net asset value per share and the net tangible 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, basic headline earnings per share and
recurring headline earnings per share figures have been calculated
based on a weighted average number of shares in issue of 173 113 349
for the financial year ended 28 February 2010.
5 The net asset value per share and net tangible asset value per share
figures have been calculated based on 166 994 311 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.
16 July 2010
Stellenbosch
Sponsor: PSG Capital
Date: 16/07/2010 16:42:06 Produced by the JSE SENS Department.
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