| Thu 23 Feb 2012, 14:44 | | MTL - Mercantile - Financial Effects regarding the Proposed Specific Repurchase |
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MTL
MTL
MTL - Mercantile - Financial Effects regarding the Proposed Specific Repurchase
of Securities by Mercantile by way of a Scheme of Arrangement and Withdrawal of
Cautionary Announcement
Mercantile Bank Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1989/000164/06)
Share code: MTL ISIN: ZAE000064721
("Mercantile" or "the Company" or "the Group")
FINANCIAL EFFECTS REGARDING THE PROPOSED SPECIFIC REPURCHASE OF SECURITIES BY
MERCANTILE BY WAY OF A SCHEME OF ARRANGEMENT AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
INTRODUCTION
Shareholders are referred to the SENS announcement on 15 February 2012 regarding
the proposed offer to minority shareholders by way of a scheme of arrangement
under the provisions of section 114 of the Companies Act, No 71 of 2008 ("the
Act"). The offer is to be made to all shareholders, except Mercantile`s holding
company, Caixa Geral de Depositos S.A. The offer to minorities represents
298,516,457 ordinary shares, net of treasury shares ("scheme participants") or
approximately 7.58% of the issued ordinary share capital of Mercantile.
Mercantile will make a cash offer of 52 cents for every one Mercantile ordinary
share held (the "Cash Consideration") and will extend the offer to Mercantile
share scheme option holders (who held 32,960,000 exercisable options as at 31
December 2011), on the same basis to that being made to the scheme
participants.(collectively "the Offer").
The Offer is to be effected by way of a scheme of arrangement under the
provisions of section 114 of the Act in respect of Mercantile ordinary
shareholders and Mercantile share option holders (the "Scheme"). On the
implementation of the Scheme, all of the scheme participant`s shares will be
acquired from the minorities at the Cash Consideration. Subsequently, the
listing of the Mercantile ordinary shares on the Main Board of the JSE Limited
("JSE") will be terminated.
As the financial effects were not disclosed in the announcement on 15 February
2012, they are set out below.
PRO FORMA FINANCIAL EFFECTS OF THE OFFER
The unaudited pro forma financial effects of the Offer on Mercantile before and
after the Offer are based on the audited results of Mercantile for the year
ended 31 December 2011. The unaudited financial effects are presented for
illustrative purposes only, to provide information on how the Offer may have
impacted on the results and financial position of Mercantile. The unaudited pro
forma financial effects are the responsibility of Mercantile`s directors. Due to
the nature of the unaudited pro forma financial effects, they may not fairly
present Mercantile`s financial position and the results of its operations after
the Offer. The financial effects do not purport to be indicative of what the
financial results would have been, had the Offer been implemented on a different
date. The unaudited pro forma financial information has been presented in a
manner consistent in all respects with International Financial Reporting
Standards and Mercantile`s accounting policies applied consistently throughout
the period.
The financial effects of the Offer are set out below:
Before the After the Percentag
Offer Offer e change
Amount Amount
Basic earnings per share 3.2 3.2 -
("EPS") (cents)
Diluted earnings per share 3.2 3.2 -
("DEPS") (cents)
Headline earnings per share 3.2 3.2 -
("HEPS") (cents)
Diluted headline earnings per 3.2 3.2 -
share ("DHEPS") (cents)
Net asset value per share 42.9 41.9 (2.3)
("NAV") (cents)
Tangible net asset value per 36.1 34.6 (4.2)
share ("TNAV") (cents)
Total shares in issue 3 938 918 3 614 018 (8.3)
524 195
Shares in issue net of 3 912 534 3 614 018 (7.6)
treasury shares (After: Nil) 652 195
Weighted average number of 3 912 234 3 614 018 (7.6)
shares in issue 421 195
net of treasury shares (After:
Nil)
Diluted weighted average 3 917 984 3 614 018 (7.8)
number of shares in issue net 421 195
of treasury shares (After:
Nil)
Notes and assumptions:
1. The EPS and HEPS in the "Before the Offer" column of the table are based on
the audited statement of comprehensive income of Mercantile for the
financial year ended 31 December 2011 and 3 912 234 421 Mercantile ordinary
shares in issue (being the weighted number of ordinary shares in issue for
the year ended 31 December 2011, net of treasury shares).
2. The DEPS and DHEPS in the "Before the Offer" column of the table are based
on the audited statement of comprehensive income of Mercantile for the
financial year ended 31 December 2011 and 3 917 984 421 Mercantile ordinary
shares in issue (being the weighted diluted number of ordinary shares in
issue for the year ended 31 December 2011, net of treasury shares).
3. The EPS and HEPS in the "After the Offer" column of the table are based on
3 614 018 195 Mercantile ordinary shares in issue and the assumptions that:
* the Offer became effective on 1 January 2011 and the purchase price
was settled on that date;
* the Offer was settled in cash; and
* the net cash used for the settlement was invested on the Money Market
at an after tax rate of 3.8%, yielding an annual after-tax interest of
R6 194 766.
4. The DEPS and DHEPS in the "After the Offer" column of the table are based
on 3 614 018 195 Mercantile ordinary shares in issue and the assumptions
that:
* the Offer became effective on 1 January 2011 and the purchase price
was settled on that date;
* the Offer was settled in cash; and
* the net cash used for the settlement was invested on the Money Market
at an after tax rate of 3.8%, yielding an annual after-tax interest of
R6 194 766.
5. The NAV per share and TNAV per share in the "Before the Offer" column of
the table are based on the audited statement of financial position of
Mercantile at 31 December 2011 and 3 912 534 652 Mercantile shares in
issue, net of treasury shares.
6. The NAV per share and TNAV per share in the "After the Offer" column of the
table are based on the assumptions that the Offer was completed on 31
December 2011.
7. Once-off transaction costs relating to the Offer are estimated to be R1.5
million.
8. There are no post balance sheet events which require adjustment to the pro
forma financial effects.
9. The pro forma financial effects have not been reviewed by Mercantile`s
auditors.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Following the disclosure of the financial effects of the Offer, shareholders are
no longer required to exercise caution when dealing in their Mercantile shares
and accordingly the cautionary announcement released by Mercantile on 15
February 2012 is hereby withdrawn.
Johannesburg
23 February 2012
Sponsor and transaction advisor: Bridge Capital Advisors (Pty) Limited
Legal Advisor: Eversheds
Date: 23/02/2012 14:44:03 Produced by the JSE SENS Department.
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