| Thu 29 Mar 2012, 14:38 | | ZED - Zeder Investments Limited - Fulfilment of co |
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ZED
ZED
ZED - Zeder Investments Limited - Fulfilment of conditions precedent to the
acquisition by Zeder of the entire issued share capital of Agricol Holdings
Limited, changes to the Zeder board and the Chayton acquisition
ZEDER INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2006/019240/06
Share Code: ZED
ISIN Number: ZAE000088431
("ZEDER")
FULFILMENT OF CONDITIONS PRECEDENT TO THE ACQUISITION BY ZEDER OF THE ENTIRE
ISSUED SHARE CAPITAL OF AGRICOL HOLDINGS LIMITED ("the Agricol Transaction"),
CHANGES TO THE ZEDER BOARD AND THE CHAYTON ACQUISITION
1. IMPLEMENTATION OF THE AGRICOL TRANSACTION
1.1 Shareholders are referred to the SENS announcement made on 1 December 2011
("the Announcement"), advising shareholders that Zeder had entered into an
agreement with Agricol Holdings Limited ("Agricol") in terms of which Zeder
would increase its interest in Agricol from 25.1% to 91% for a purchase
consideration of R130.7 million.
1.2 The Announcement indicated that a similar offer would be extended to the
remaining 9% minority shareholders in Agricol. Shareholders are advised
that such an offer for the remaining 9% shareholding in Agricol was
subsequently made and has been accepted by all minority shareholders.
1.3 Shareholders are advised that the Agricol Transaction was formally approved
by the Competition Tribunal on Wednesday, 28 March 2012. All conditions
precedent to the Agricol Transaction have been fulfilled and the Agricol
Transaction will now be implemented in accordance with its terms.
1.4 Following implementation of the Agricol Transaction, Zeder, through its
wholly-owned subsidiary Zeder Financial Services Limited, will be the sole
shareholder of Agricol. As a result of Zeder also acquiring the remaining
9% minority shareholding interest in Agricol, the purchase consideration
has increased above R130.7 million. The total increased consideration of
R150.4 million will be paid in cash on implementation of the Agricol
Transaction.
2. CHANGES TO THE ZEDER BOARD
2.1 Zeder views its acquisition of Agricol as an important phase in its
investment strategy and plans to use this vehicle to drive a South African
and an African expansion in the seed business. Given the importance of the
aforesaid, Zeder will appoint its CEO, Antonie Jacobs, as the executive
chairman of Agricol with effect from 1 May 2012. As a result of Mr.
Jacobs` new responsibilities, he will resign as Zeder`s CEO with effect
from 30 April 2012. Mr. Jacobs will continue to serve on the boards of
Pioneer Food Group Limited and Capespan Group Limited.
2.2 Following Mr. Jacobs` resignation on 30 April 2012 and until such time as
Zeder appoints a successor to Mr. Jacobs, Mr. Piet Mouton, the CEO of PSG
Group Limited, will assume the duties of acting CEO of Zeder. Shareholders
are further advised that Mr. Mouton has been appointed as director to the
board of Zeder with effect from 28 March 2012. A further announcement
regarding the appointment of a successor CEO will follow in due course.
3. THE CHAYTON ACQUISITION
3.1 INTRODUCTION
Shareholders are hereby advised that Zeder has entered into agreements
("the Acquisition Agreements") with CA Limited Partnership, in terms of
which Zeder will acquire shares in and claims against Chayton Atlas
Investments ("Chayton" or "the company") and has concluded subscription
agreements (collectively "the Subscription Agreement") with Chayton whereby
Zeder will obtain an initial interest of approximately 81% of the issued
share capital of Chayton on the effective date ("the Initial Acquisition").
In terms of the Subscription Agreement, Zeder will subscribe for the
balance of the subscription shares in tranches, as and when suitable
acquisition opportunities have been identified by Chayton ("the
Subscription Balance"). Subsequent to the subscription by Zeder for the
Subscription Balance, Zeder will effectively hold an interest of 95.5% of
the issued share capital of Chayton ("the Chayton Acquisition").
The Acquisition Agreements were entered into on 29 March 2012, and the
effective date of the Chayton Acquisition is the 5th business day after the
fulfilment or waiver of the conditions precedent to the Chayton
Acquisition.
3.2 RATIONALE OF THE ACQUISITION
Zeder has decided to actively embark on an African investment strategy of
which the Chayton Acquisition is the first.
Zeder believes that the investment in Chayton offers attractive long-term
returns. Zeder is excited about the role that Africa, with its vast
agricultural resources, could play in addressing the growing global demand
for food and believes that Chayton is the appropriate vehicle to grow into
a premier sub-Saharan African agribusiness. The investment in Chayton will
further contribute to Zeder`s reach and will create new opportunities for
its current SA-based investments.
3.3 BACKGROUND INFORMATION ON CHAYTON
Chayton is a large scale commercial farming operation. The company invests
and develops potentially high return primary production units in areas of
sub-Sahara Africa with favourable climate, soils and water availability.
The initial farming operations are located in Zambia, where Chayton
currently has 1,250 hectares (previous year 425 hectares) of irrigated farm
land with the ability to double-crop. Chayton plans to extend its farming
operation in Zambia up to approximately 10,000 hectares over the next two
years. Given the size of the planned operations it will afford Chayton the
opportunity to establish service businesses that connect with its primary
production sites that can create economies of scale and facilitate the
establishment of a vertically-integrated regional agribusiness portfolio.
Zeder believes that the Chayton management is key to realising the full
potential of this investment and takes significant comfort from
management`s proven track record in developing and managing large scale
African commercial farms.
Chayton`s risk mitigating strategy incorporates a combination of farming
expertise, local government support and World Bank guarantees.
3.4 CONSIDERATION
The consideration payable by Zeder in terms of the Initial Acquisition
amounts to USD 9.7 million ("the Acquisition Consideration"). The
Acquisition Consideration will be payable in cash following fulfilment or
waiver of all conditions precedent to the Chayton Acquisition.
Zeder will subscribe for the Subscription Balance, amounting to USD 37
million in tranches as and when suitable acquisition opportunities have
been identified by Chayton.
3.5 CONDITIONS PRECEDENT
The only material outstanding condition precedent to the Chayton
Acquisition is exchange control approval, of which the outcome is
anticipated by Friday, 30 March 2012.
3.6 PRO FORMA FINANICAL EFFECTS
The pro forma financial effects of the Chayton Acquisition are presented
for illustrative purposes only and because of their nature may not give a
fair reflection of Zeder`s financial position after the Chayton
Acquisition.
The directors of Zeder are responsible for the preparation of the unaudited
pro forma financial information.
Set out below are the unaudited pro forma financial effects of the Chayton
period ended 31 August 2011.
The pro forma financial effects as set out below assumes only the pro forma
effects of the Initial Acquisition, due to the financial effects relating
to the Subscription Balance only being quantifiable once suitable
acquisition opportunities being identified.
Unaudited Unaudited Change
before the after the
Chayton Chayton
Acquisition Acquisition
(cents) (cents)
Attributable earnings per share 8.6 7.5 (12.5%)
(basic and diluted)
Headline earnings per share 8.8 7.7 (12.2%)
(basic and diluted)
Net asset value per share 261.5 261.5 (0.1%)
Number of shares in issue 978.1 978.1 0.0%
(million)
Weighted number of shares in 978.1 978.1 0.0%
issue (million)
Notes:
1. The attributable earnings per share and headline earnings per share
figures in the "Unaudited after the Chayton Acquisition" column have
been calculated on the basis that the Initial Acquisition was effected
on 1 March 2011. The dilutive effects are due to Chayton currently
being in the development phase of the business operations.
2. The net asset value per share figure in the "Unaudited after the
Chayton Acquisition" column has been calculated on the basis that the
Initial Acquisition was effected on 31 August 2011.
3. It was assumed that the Initial Acquisition was funded from existing
debt facilities of Zeder, which carries interest at an effective rate
of 7.8%. Taxation was provided for.
3.7 CLASSIFICATION OF THE CHAYTON ACQUISITION
The Chayton Acquisition constitutes a Category 2 transaction in terms of
the Listings Requirements of the JSE Limited.
3.8 WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement dated 25 January
2012, as well as the renewal of the announcement on 7 March 2012, and are
hereby advised that the cautionary announcement is withdrawn. Accordingly
caution is no longer required to be exercised by shareholders when dealing
in the shares of Zeder.
Stellenbosch
29 March 2012
Sponsor
PSG Capital (Pty) Limited
Date: 29/03/2012 14:00:02 Produced by the JSE SENS Department.
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