| Mon 5 Mar 2001, 0:00 | | Genop - Scheme Of Arrangement |
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General Optical Company Limited
(Incorporated in the Republic Of South Africa)
(Registration number 1948/031268/06)
("Genop") or ("the Company")
Scheme of Arrangement proposed by Abraham Eliezer Abrahamson between the
company and its shareholders, other than the Abrahamson consortium
1. Introduction
1.1. Shareholders of the company are referred to the announcement published
on 21 February 2001 advising that a scheme of arrangement would be proposed in
terms of section 311 of the Companies Act No 61 of 1973, as amended ("the
scheme"), between the company and its shareholders other than the Abrahamson
consortium ("shareholders") in terms of which the company will acquire all the
shares in the capital of the company held by the shareholders. The
implementation of the scheme will, accordingly, result in the company being
wholly owned by the Abrahamson consortium and the company will be delisted from
the JSE Securities Exchange South Africa ("the JSE").
1.2. For the purposes of the scheme the "Abrahamson consortium" means AE
Abrahamson, FS Salomon, LP Abrahamson and their respective families and
discretionary trusts under which any or all of them may benefit.
2. Background to and rationale for the scheme
Genop has been quoted on the JSE for the past 50 years. In recent years, as a
small capitalisation company, its shares have become less and less marketable,
with the consequent inability for shareholders to obtain real value and for the
company to benefit from its true capitalisation.
3. The scheme
3.1. The scheme consideration
In terms of the scheme, shareholders registered as such on the record date of
the scheme will, upon the scheme becoming operative, be entitled to receive a
cash payment of 500 cents for every Genop share held.
3.2. Confirmation relating to the cash consideration
The Standard Bank of South Africa Limited has confirmed to the Securities
Regulation Panel ("SRP") that the company has sufficient cash resources
available to satisfy its obligations in terms of the scheme.
3.3. Irrevocable undertakings
Irrevocable undertakings have been given by shareholders holding approximately
80% of issued shared capital of Genop (excluding the shares held by the
Abrahamson consortium) to hold their Genop shares until the scheme meeting and
to vote in favour of the scheme.
3.4. Financial effects of the scheme on shareholders
The table below illustrates the financial effects per share of the scheme on a
shareholder:
Notes Before After Increase /
(cents) (cents) (decreased)
Market value 1 394 500 27
Headline earnings 2 37,5 38,3 2,13
Net asset value 3 519 510 (1,7)
Notes:
1. Based on the closing market price of a Genop share on the JSE on 20
February 2001, being the last day on which such shares traded on the JSE before
the publication of the Interim Report.
2. Based on the unaudited headline earnings for the six months ended 31
December 2000 after taking into account the interest payable on the scheme
consideration.
3. Based on the unaudited net asset value per Genop share for the six months
ended 31 December 2000.
3.5. Conditions
The scheme will be subject to the following conditions precedent, namely:-
3.5.1. the approval of the scheme by 75% of shareholders, present and voting
either in person or by proxy at the scheme meeting;
3.5.2. the sanction of the scheme by the High Court of South Africa ("Court");
3.5.3. the registration by the Registrar of Companies of the Order of Court
sanctioning the scheme; and
3.5.4 the shareholders, in general meeting, approving the resolutions
necessary to implement the scheme.
4. Listing
Should the scheme be sanctioned by the High Court and become operative, the
listing of Genop shares on the JSE will be terminated at the close of business
on Friday, 25 May 2001.
1. Opinions and recommendations
Cadiz Investment Bank Limited ("Cadiz") has advised the board of directors of
Genop that it has considered the terms of the scheme and is of the opinion that
the scheme consideration is fair and reasonable to shareholders.
The directors of Genop, having regard to the opinion of Cadiz and the report of
an independent sub-committee of directors charged with considering the terms of
the scheme, have considered the terms of the scheme and are of the opinion that
the scheme consideration is fair and reasonable.
Certain of the directors of Genop, namely AE Abrahamson, FS Salomon and LP
Abrahamson, are members of the Abrahamson consortium.
6. Documentation
A circular which is subject to the approval by the SRP and the JSE, containing
details of the scheme will be posted to shareholders on or about Thursday, 12
April 2001. A further announcement will be published in the press at that time
Sandton
5 March 2001
Sponsor
ENF Sponsors (Pty) Limited
(A Sponsor registered on the JSE
(Registration number 2000/027636/07)
Corporate law advisers & consultants
Edward Nathan & Friedland (Pty) Limited
(Registration number 1999/0276464/07)
Accountants
Moores Rowland
Investment Bank
Cadiz Investment Bank
(Registration number 1882/000030/06)
