| Tue 13 Mar 2001, 0:00 | | Money Wise Acquires Pivot |
|
MONEY WISE
(Incorporated in the Republic of South Africa)
(Registration number 1997/020159/06)
("Money Wise" or "the company")
ANNOUNCEMENT REGARDING:
* The acquisition by Money Wise Holdings Limited ("Money Wise") of the entire
issued share capital of Pivot Consolidated (Proprietary) Limited ("Pivot")
* Further cautionary announcement
1 INTRODUCTION
Further to the cautionary announcement published by Money Wise on 22 January
2001 and referred to in the Interim Results published by Money Wise on 14
February 2001, KPMG Corporate Finance is authorised to announce that, subject
to certain suspensive conditions, Money Wise has acquired the entire issued
share capital of Pivot from EB Shelf Investments Number Seventy Nine
(Proprietary) Limited ("the vendor").
2 THE NATURE OF THE BUSINESS
Pivot offers medium- to long-term loans to those sectors of the community that
are not adequately served by mainstream banks.
3 RATIONALE FOR THE ACQUISITION
The acquisition is in line with the stated Money Wise strategy of migrating
from short- to medium- and long-term loan financing; and spreading its branch
network more evenly throughout southern Africa.
4 TERMS OF THE AGREEMENT
Consideration
4.1 Money Wise will acquire the entire issued share capital of Pivot from the
vendor for a total purchase consideration of R42 124 875, to be settled by:
- a cash consideration of R16 248 750; and
- the issue of 575 025 000 ordinary shares in Money Wise to be allotted and
issued as fully paid at 4,50 cents per share.
Warranties
4.2 The acquisition is subject to warranties normal in an agreement of this
nature.
Conditions Precedent
4.3 The acquisition is, inter alia, conditional upon:
- the approval of the shareholders of Money Wise in a general meeting;
- the approvals of the JSE Securities Exchange South Africa ("the JSE") and
the Securities Regulation Panel ("the SRP");
- the approval of the Competition Commission; and
- the satisfactory completion of a due diligence investigation of Pivot by
Money Wise.
5 FINANCIAL EFFECTS
5.1 The effect of the transaction on the earnings/(loss) per Money Wise share,
headline earnings/(loss) per share, net asset value per share and tangible net
asset value per share is illustrated in the table below:
Financial effects of the transaction
Before Notes After Notes
Basic loss per share (cents) (3,55) (1) (1,64) (3)
Headline (loss)/earnings per share (cents) (1,91) (1) 0,39 (3)
Net asset value per share (cents) 2,36 (2) 3,32 (4)
Net tangible asset value per share (cents) 1,39 (2) 0,68 (4)
Number of shares in issue ("000) 705 784 1 280 809
Notes
(1) The "Before" Basic loss per share and Headline loss per share calculations
were extracted from the unaudited interim results for the 12 month period ended
31 December 2000. Basic loss per share and Headline loss per share were
calculated on the basis of a weighted average number of shares outstanding of
474 341 840 for the 12 month period.
(2) The "Before" Net asset value per share and Net tangible asset value per
share were extracted from the unaudited interim balance sheet at 31 December
2000.
(3) The "After" Basic loss per share and Headline earnings per share are based
on the assumption that the transaction took place on 1 January 2000 and are
calculated based on the unaudited interim results for the 12 months ended 31
December 2000, for Money Wise, and pro forma management accounts for the 12
months ended 31 December 2000 for Pivot. In performing this calculation, 50% of
the goodwill arising on the acquisition of Pivot has been amortised. It has
also been assumed that the cash consideration paid for the acquisition, would
have earned interest at an after tax rate of 7% over this period.
(4) The "After" Net asset value per share and Net tangible asset value per
share are calculated based on the actual effective date of the transaction and
reflect the total goodwill arising on the acquisition of Pivot.
6 RELATED PARTY TRANSACTION
The Pivot acquisition constitutes a related party transaction as defined in the
Listing Requirements by virtue of the fact that Harry van Heerden is a director
of the Company and has an indirect joint interest of 15% in Pivot.
7 OPINION AND RECOMMENDATIONS
The board of directors of Money Wise has considered the terms and conditions of
the acquisition and is of the opinion that they are to the benefit of Money
Wise shareholders. It recommends that shareholders vote in favour of the
proposed transactions at the Money Wise general meeting to approve the
acquisition.
8 DOCUMENTATION
A circular containing full details of the acquisition will be posted to
shareholders within 28 days.
9 FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are advised that Money Wise is involved in further discussions,
which, if successfully concluded, may have an impact on the price at which
Money Wise shares trade on the JSE. Shareholders of Money Wise are therefore
advised to continue to exercise caution when dealing in Money Wise shares until
a further announcement is made.
By order of the board
Johan van Rooyen
Company Secretary
13 March 2001
Knysna
Corporate advisor
Arcay Group Limited
Registration number 1991/003944/06
Investor relations
Arcay Financial Communications
Registration number 1998/024383/07
Sponsor
KPMG
Attorneys
Werksmans Attorneys
Press Release 13 March 2001
MONEY WISE CONTINUES ITS EXPANSION DRIVE
Money Wise Holdings Limited ("MWISE"), the mass market financial services
company, today announced its merger with Pivot Consolidated (Pty) Ltd for a
purchase consideration of R42,1 million. Pivot is a medium- to long-term loan
financing company based in Kwa Zulu-Natal.
Kevin de Villiers, non-executive director of Money Wise, believes that the
company is now well-poised to play a constructive role in its planned
consolidation of the industry.
De Villiers comments, "The Pivot merger allows us to expand our presence in Kwa
Zulu-Natal. This acquisition is of strategic value as we concentrate more on
medium- to long-term loans. As announced in our interim results a few weeks
ago, the company has reduced its short-term loan book from 84% to 15% of the
total book in anticipation of the growth in medium- to long-term loans."
De Villiers continues, "Money Wise will continue to expand the range of
financial services offered to its clients and is set to become one of the most
significant players in the mass financing market."
ends
Written and distributed by : Arcay Financial Communications
On behalf of : Money Wise Holdings Ltd
Further information : Gary Scallan
Tel : 27 11 480 8572
Fax : 27 11 480 8603
Cell : 083 603 1481
e-mail : scalg@arcay.co.
