| Tue 27 Mar 2001, 0:00 | | Offer By Boe Bank Limited To Credcor Shareholders |
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BoE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/003281/06)
("BoE")
CREDCOR LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/010400/06)
("Credcor" or "the company")
OFFER BY BoE BANK LIMITED TO CREDCOR SHAREHOLDERS
1. INTRODUCTION
Further to the cautionary announcements that appeared in the press on 5
February 2001 and 14 March 2001, BoE Merchant Bank, a division of BoE Bank
Limited ("BoE Bank"), and Investec Bank Limited are authorised to announce that
BoE Bank, a wholly-owned subsidiary of BoE, has completed a satisfactory due
diligence review of Credcor. BoE Bank intends to acquire the entire issued
share capital of Credcor, subject to the fulfilment of the conditions precedent
set out in paragraph 6 below, by means of a scheme of arrangement in terms of
Section 311 of the Companies Act, 1973 (Act 61 of 1973), as amended ("the Act")
("the scheme"). Should the scheme for any reason not become operative, an offer
in terms of Section 440 of the Act will be made ("the offer"). The scheme and
the offer are subsequently referred to as "the transaction".
BoE Bank currently owns 28 953 753 ordinary shares in Credcor, representing
13,79% of the total issued ordinary share capital of the Company. In addition,
BoE Bank has entered into agreements with The Flack Family Trust, Tanglewood
Investments (Proprietary) Limited and funds controlled by Ethos Private Equity
Limited (collectively "the Vendors") which own 57,28% of the total issued
ordinary share capital of Credcor. In terms of these agreements, the Vendors
have irrevocably undertaken to vote in favour of the scheme and to accept the
offer.
2. THE TRANSACTION
Credcor shareholders will, subject to the fulfilment of the conditions
precedent set out in paragraph 6 or 7 below, be offered a cash consideration of
296 cents per Credcor ordinary share ("the consideration"). Interest on the
consideration will be payable to Credcor shareholders, at a pre-taxation rate
of 10% per annum compounded monthly, should the consideration be paid to them
on or after Monday, 25 June 2001.
3. RATIONALE FOR THE TRANSACTION
BoE considers the emerging market to be one that offers considerable growth
potential at attractive margins. In order to accelerate its drive into the
emerging market, BoE is seeking to invest in existing businesses servicing that
market. As an established and respected player in the industry, with a highly
regarded management team, Credcor is considered to be an ideal business through
which BoE can expand into the emerging market. Credcor has been offering
consumer credit products to its clients for 22 years. Should the transaction be
implemented, Credcor will become a division of BoE Bank. BoE's intention with
regard to Credcor is to ensure that the business is adequately funded and to
give management accountability to continue developing the business within its
target markets and in line with an agreed business plan.
4. FINANCIAL EFFECTS OF THE TRANSACTION
The financial effects of the transaction on a Credcor shareholder who accepts
the transaction, on a per share basis, are set out in the table below:
Before After Change
(cents) (cents) (%)
Market price:
* Friday, 2 February 2001(1) 219 296 35%
* 30-day weighted average(2) 192 296 54%
* Monday, 26 March 2001(3) 255 296 16%
Tangible net asset value 156 (4) 296 90%
Headline earnings 33 (5) 21 (6) (36%)
Dividends/interest income 4 (5) 21 (6) 425%
Notes:
(1) Based on the closing price of the Credcor ordinary shares on the last
trading day prior to the publication of the first cautionary announcement.
(2) Based on the weighted average traded price of Credcor ordinary shares over
the 30 trading days up to the publication of the first cautionary announcement.
(3) The last practicable date prior to the publication of this announcement on
SENS.
(4) At 30 September 2000.
(5) For the year ended 30 September 2000.
(6) The earnings per share in the "After" column assumes that the consideration
is invested at an after-tax rate of 7% per annum for the full financial year
ended 30 September 2000.
5. OPINION
Investec Bank Limited has been appointed as advisor to the Credcor board of
directors and the minority shareholders of Credcor, to consider the terms and
conditions of the transaction, whose opinion will be published in due course
with the salient dates and times relating to the transaction.
6. CONDITIONS PRECEDENT TO THE SCHEME
The implementation of the scheme is subject to the fulfilment of certain
conditions precedent, including:
6.1 the approval of the Registrar of Banks;
6.2 the approval of the Competition Commission;
6.3 the approval of the relevant documentation by the JSE Securities Exchange
South Africa ("the JSE") and the Securities Regulation Panel ("the SRP");
6.4 the approval by not less than 75% of the Credcor shareholders (other than
BoE Bank) present and voting at the scheme meeting;
6.5 the sanction of the scheme by the High Court of South Africa; and
6.6 registration of the Order of Court by the Registrar of Companies.
7. CONDITIONS PRECEDENT TO THE OFFER
In the event that the scheme does not become operative, the offer is
conditional upon, inter alia, the necessary approvals, as set out in paragraphs
6.1 to 6.3 above, being obtained.
8. CASH CONFIRMATION
The SRP has been satisfied that BoE Bank has the necessary cash resources
available to implement the transaction.
9. DELISTING OF CREDCOR
If the transaction is successfully implemented, application will be made to the
JSE for the termination of the listing of the Credcor ordinary shares.
10. DOCUMENTATION AND FURTHER ANNOUNCEMENT
A further announcement setting out the salient dates and times relating to the
transaction will be published and a document containing full details of the
transaction will be dispatched to Credcor shareholders within 30 days of the
date of this announcement (or, with the consents of the JSE and the SRP, as
soon as practicable thereafter).
DURBAN
28 March 2001
Merchant bank to BoE
BOE Merchant Bank
A Division of BOE Bank Limited
Co. Reg. No. 1951/000847/06
Sponsor to BoE
BoE Securities (Pty) Ltd
Member of the JSE Securities Exchange South Africa
Co. Reg. No. 1995/012240/07
Attorneys to BoE
Shepstone Wylie
Attorneys to Credcor
Webber Wentzel Bowens
Merchant bank and independent advisor to Credcor
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor to Credcor
Investec Bank Limited
(Registration number 1969/004763/06)
