| Mon 13 Dec 2010, 12:00 | | NPK - Nampak Limited - Amended further cautionary announcement regarding the |
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NPK
NPK
NPK - Nampak Limited - Amended further cautionary announcement regarding the
disposal of the Nampak Cartons and Healthcare Businesses in Europe and
withdrawal of cautionary announcement
Nampak Limited
(Incorporated in the Republic of South Africa)
Registration number: 1968/008070/06)
ISIN: ZAE000071676
Share code: NPK
("Nampak" or "the Company")
AMENDED FURTHER CAUTIONARY ANNOUNCEMENT REGARDING THE DISPOSAL OF THE NAMPAK
CARTONS AND HEALTHCARE BUSINESSES IN EUROPE AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1 Introduction
Shareholders are referred to the cautionary announcement published on
4 October 2010 and renewed on 22 November 2010, which advised shareholders that
discussions with regard to the disposal of the Company`s Cartons and Healthcare
businesses in Europe were at an advanced stage.
An agreement has now been concluded in terms of which Nampak will dispose of the
entire shareholding of Nampak Paper Holdings Limited ("Europe Paper") to Maximus
Holding II S.a.r.l.
This announcement is published in compliance with the Listings Requirements of
the JSE Limited ("Listings Requirements") and to provide shareholders with
additional information regarding the disposal.
2 Background on Europe Paper and its business
Nampak Paper Holdings is the holding company of the Cartons and Healthcare
businesses in Europe.
3 Description of purchaser
Maximus Holding II S.a.r.l. is a company incorporated in Luxembourg and is an
affiliate of Platinum Equity. Platinum Equity is a global M&A&ORegistered firm
specializing in the merger, acquisition and operation of companies that provide
services and solutions to customers in a broad range of business markets. Since
its founding in 1995 by Tom Gores, Platinum Equity has completed over 100
acquisitions. Further information about Platinum Equity is available at
www.platinumequity.com.
4 Rationale for the Transaction
Nampak acquired the European Cartons and Healthcare businesses in 2002 as part
of the acquisition of Malbak Limited from Remgro and other shareholders. These
European operations have earned sub-optimum returns since 2002, averaging 5,9%
return on net assets since the acquisition.
A review of the businesses by the new management and board at Nampak concluded
that these operations are unlikely to achieve the returns required by the Nampak
group. The board therefore decided to sell these businesses. The funds will
initially be used to reduce debt and will put Nampak in a better position to
invest in other group operations and countries where better returns are
expected.
5 Effective date of Transaction
The effective date of the sale of Europe Paper will be the last business day of
the month in which the condition precedent referred to in 6 below is satisfied
or waived, provided that if the condition is not satisfied or waived by the 15th
business day prior to the end of a month, the effective date will be the last
business day of the following month.
6 Condition precedent
The sale is conditional on the European Commission taking (or being deemed to
have taken) a decision under Article 6(1)(b) of Regulation (EC) 139/2004
declaring the transaction compatible with the Common Market, either
unconditionally or on terms acceptable to both parties, by 30 April 2011, or
such later date as the parties may agree to in writing.
7 Consideration
The purchase consideration is based on an enterprise value of GBP80.0 million.
After deducting pension fund liabilities, quasi debt items and other
miscellaneous transaction adjustments the net proceeds are estimated to be
GBP65.0 million.
8 Settlement of the purchase consideration
The net purchase consideration of GBP65.0 million will be paid in cash on the
effective date of the transaction.
9 Application of the sale proceeds
The sale proceeds will be utilised to reduce debt in the Nampak group.
10 Pro forma financial effects of the Transaction
The pro forma financial effects as set out below have been prepared for
illustrative purposes only to assist shareholders in assessing the impact of the
Transaction on earnings per share ("EPS"), headline earnings per share ("HEPS"),
net asset value per share ("NAVPS") and tangible net asset value per share
("TNAVPS").
The pro forma effects have been applied to Nampak`s statement of comprehensive
income and statement of financial position for the year ended 30 September 2010.
These pro forma financial effects have been disclosed in terms of the Listings
Requirements and, because of their nature, may not fairly present Nampak`s
financial position, changes in equity, results of operations or cash flows.
The directors of Nampak are responsible for the preparation of the pro forma
financial effects, which have not been reviewed by the auditors.
Actual Pro forma Change
"before" "after" %
EPS (cents) 140.5 138.9 (1.1)
HEPS (cents) 149.7 148.1 (1.1)
Fully diluted EPS (cents) 138.9 137.3 (1.1)
Fully diluted HEPS (cents) 147.7 146.2 (1.0)
NAVPS (cents) 912.5 868.0 (4.9)
TNAVPS (cents) 861.3 824.9 (4.2)
Net gearing (%) 33.2 20.2 (39.2)
Notes:
10.1 The Actual "before" column has been extracted from the published audited
financial results of Nampak Limited for the year ended 30 September 2010.
10.2 EPS and HEPS as set out in the Pro forma "after" column have been prepared
on the basis of the following assumptions and information:
a The actual results of the Nampak Paper business for the year ended 30
September have been excluded as if the transaction was effective from 1 October
2010. The net profit of the business for the year ended 30 September 2010 was
GBP4.8 million.
b A notional interest saving has been applied at the average South African
borrowing rate for South Africa for the year of 9.0%.
c The tax rate has been assumed at the South African tax rate of 28%.
d The non-recurring loss on disposal and release of the foreign currency
translation reserve of R289.2m has not been included in the pro forma effects.
This amount is an estimate based on the 30 September 2010 net asset value.
10.3 NAVPS and TNAVPS as set out in the Pro forma "after" column have been
prepared by deducting the net asset value of the Europe Paper as at 30 September
2010 (GBP64.5 million) and applying the assumed proceeds to the balance sheet of
Nampak Limited at 30 September 2010.
10.4 The number of ordinary shares in issue of 588.3 million and weighted number
of ordinary shares in issue of 587.8 million have been stated net of treasury
shares.
11 Categorisation
The transaction has been classified as a category 2 transaction in terms of
Section 9 of the JSE Limited Listings Requirements and accordingly, shareholder
approval is not required.
12 WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised they no longer need to exercise caution when dealing in
their Nampak securities.
Sandton
13 November 2010
Sponsor: UBS (South Africa) (Pty) Limited
Date: 13/12/2010 12:00:01 Produced by the JSE SENS Department.
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