| Thu 8 Mar 2001, 0:00 | | Proposal By Seardel To Acquire The Minority Shares |
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SEARTEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004962/06)
("Seartec")
SEARDEL INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1968/011249/06)
("Seardel")
Proposal by Seardel to acquire the minority shares in Seartec
1. INTRODUCTION
Further to the cautionary announcement dated 12 February 2001, Ansdale
Corporate Finance is authorised to announce that Seardel will make a proposal
to acquire the balance of the issued share capital of Seartec which it does not
already own. Seardel currently owns 85% of the shares of Seartec.
2. REASONS FOR THE PROPOSAL
Seartec has in the past few years not attracted significant equity investors
and as a result its shares have received a low rating and seldom trade. Both
the major shareholder, Seardel, and the directors of Seartec are of the opinion
that the continued listing of Seartec would serve no purpose. Accordingly,
Seardel has agreed to make the proposal in order to offer the remaining
minority shareholders an opportunity to exit their investment at a fair price.
3. SALIENT FEATURES OF THE PROPOSAL
3.1 The proposal consideration
Seardel will offer Seartec shareholders 95 cents per Seartec share payable in
cash, on the basis that any dividends declared by Seartec from the date of this
announcement will accrue in favour of Seardel. The total consideration to be
received by Seartec shareholders will approximate R9,4 million.
The Securities Regulation Panel ("SRP") has been furnished with a letter from
Nedcor Bank Limited confirming that Seardel has sufficient resources to satisfy
the proposal consideration.
3.2 Form of the proposal
Seardel will propose a scheme of arrangement in terms of section 311 of the
Companies
Act, 1973 (Act 61 of 1973), as amended ("the Act"), between Seartec and its
shareholders, other than Seardel, which if implemented, will result in Seartec
becoming a wholly-owned subsidiary of Seardel ("the scheme"). Should the scheme
for any reason not become operative, an offer in terms of section 440 of the
Act will be deemed to be made at the same consideration as specified in terms
of the scheme ("the offer"). The offer will be conditional on acceptance
thereof by offerees holding not less than nine-tenths of the offer shares or
such lesser percentage as Seardel may determine.
3.3 Pro forma financial effects
The table below provides the pro forma financial effects of the proposal on the
earnings and net asset value per Seartec share and is based on the assumptions
set out below:
Before the After the %
proposal proposal change
Headline earnings
per share (cents) 0,6 (1) 7,4 (2) 1 233
Tangible net asset value
per share (cents) 127 (1) 95 (4) (25)
Market value
per share (cents) 50 (3) 95 (4) 90
Notes:
1. Based on Seartec's audited financial statements for the 12 months ended 30
June 2000. The unaudited headline earnings for the six months ended 31 December
2000 were 8,2 cents (1999: 3,4 cents). The unaudited tangible net asset value
as at December 2000 was 140 cents.
2. The pro forma income attributable to a Seartec shareholder on the cash
received in terms of the proposal, assuming that the cash had been invested for
the full 12 month period ended 30 June 2000 and earned an after-tax compounded
return of 7,5%.
3. The closing price of Seartec shares on the JSE Securities Exchange South
Africa ("JSE") on 11 February 2001, the day before the first cautionary
announcement was published.
4. The cash consideration of 95 cents per share to be paid to Seartec
shareholders for their Seartec shares in terms of the proposal.
3.4 Conditions precedent
The proposal is subject to the fulfilment of certain conditions precedent,
including:
3.4.1 receipt of the requisite approvals from the JSE, the South African
Reserve Bank and the SRP;
3.4.2 acceptance of the proposal or approval of the requisite resolutions,
where appropriate, by the requisite majority of Seartec shareholders in general
meeting;
3.4.3 in the event that the scheme is implemented, the High Court sanctioning
the scheme and the Order of Court sanctioning the scheme being registered by
the Registrar of Companies; and
3.4.4 in the event that the offer is made, acceptance thereof by offerees
holding not less than nine-tenths of the offer shares or such lesser proportion
as Seardel may determine.
4. IRREVOCABLE UNDERTAKINGS
Shareholders holding 31% of the balance of the issued share capital of Seartec,
excluding those shares held by Seardel, have given irrevocable undertakings to
vote in favour of the scheme or to accept the offer, as the case may be.
5. OPINIONS
The board of directors of Seartec has considered the terms and conditions of
the proposal and is of the opinion that they are fair and reasonable to the
shareholders of Seartec.
In accordance with the Rules of the SRP, the board of Seartec has appointed an
independent adviser to advise minority shareholders on the fairness and
reasonableness of the terms and conditions of the proposal. The opinion of the
independent adviser will be included in the circular to be posted to Seartec
shareholders in due course.
6. LISTING ON THE JSE
In the event that the scheme or the offer (if applicable) is successful,
application will be made to the JSE for the immediate suspension and subsequent
termination of the listing of Seartec shares on the JSE.
7. DOCUMENTATION AND FURTHER ANNOUNCEMENT
A circular containing full details of the proposal, which is subject to the
approvals of the JSE and the SRP, is currently in the process of being prepared
and will be posted to Seartec shareholders within 28 days from the date of this
announcement. A further announcement setting out, inter alia, the salient dates
of the proposal will be published in due course.
Cape Town
9 March 2001
Corporate adviser
ACF
Ansdale Management Services (Pty) Ltd
trading as Ansdale Corporate Finance
(Registration number 1995/003429/07)
Sponsor
KPMG
Registered Chartered Accountants (SA)
Attorneys to the scheme
Sonneberg Hoffmann & Galombik Inc.
(Registration number 1993/000565/21)
