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CMG
CMG
CMG - Cenmag Holdings Limited - The proposed specific repurchase of shares and
Section 228 disposal of subisidiaries and withdrawal of cautionary
announcement
CENMAG HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004821/06)
Share code: CMG ISIN code: ZAE000001533
(`Cenmag" or `the company`)
THE PROPOSED SPECIFIC REPURCHASE OF SHARES AND SECTION 228 DISPOSAL OF
SUBISIDIARIES AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the SENS announcement dated 14 May 2010
detailing the various agreements, which when taken together will result
in:
a) the company repurchasing 35.53% of its issued share capital ("the
Proposed Specific Repurchase"); and
b) the company disposing of its existing subsidiaries ("the Proposed
Disposal")
together, "the Proposed Transactions", the implementation of which will
result in the company becoming a cash shell.
2. Details of the Proposed Specific Repurchase
Shareholders are reminded that the Proposed Specific Repurchase forms
part of a series of four inter-related agreements, the details of which
are set out in the SENS announcement dated 14 May 2010.
The Proposed Specific Repurchase provides for the repurchase by the
company of 2 402 105 shares held by Victor Farkas and 1 009 293 shares
held by Blaf Investments cc ("the repurchased shares") at R1.20 per
share. As both Farkas and Blaf are related parties to Cenmag, the board
of directors has obtained a fairness opinion from an independent
professional expert advising on whether the repurchase is fair to the
shareholders, a copy of which opinion, together with the directors`
statement thereon will be included in the circular to be sent to
shareholders, as detailed in paragraph 6 below.
3. General Meeting
Shareholders will be requested to approve resolutions relating, inter
alia, to the Proposed Transactions at a general meeting of shareholders
to be held on or about 12 October 2010. The repurchased shares will be
cancelled following the registration of resolutions relating to the
Proposed Specific Repurchase by the Registrar of Companies.
4. Change in Control and Mandatory Offer to Minority Shareholders
Shareholders are advised that the mandatory offer to minority
shareholders, which was to be at the same price and on similar terms as
the Proposed Specific Repurchase, has been increased to R1.60 per share.
Full details of the mandatory offer are contained in the circular
referred to in paragraph 6 below.
5. Pro Forma Financial Effects
The table below sets out the unaudited pro forma financial effects of the
Proposed Transactions on Cenmag`s earnings per share, headline earnings
per share, net asset value per share and net tangible asset value per
share. The unaudited pro forma financial effects have been prepared to
illustrate the impact of the specific repurchase on the reported
financial information of Cenmag for the year ended 28 February 2010, had
the Proposed Transactions been implemented on 1 March 2009 for the
purpose of the Statement of Financial Performance and on 28 February 2010
for the purpose of the Statement of Financial Position. The unaudited pro
forma financial effects have been prepared using accounting policies that
comply with International Financial Reporting Standards and are
consistent with those applied in the audited results for the year ended
28 February 2010.
The unaudited pro forma financial effects, which are the responsibility
of the directors, are provided for illustrative purposes only and,
because of their pro forma nature, may not fairly present Cenmag`s
financial position, changes in equity, financial performance or cash
flows.
Group After de- % Change After de- %
Audited consolida consolidati Change
Results tion on and
28 dividend
February
2010
Basic 26.47 0.01 -100.0 70.11 100.00
earnings per
share
(cents)
Headline 26.47 0.01 -100.0 70.11 100.00
earnings per
share
(cents)
Dividends 0.00 0.00 NA 0.00 NA
Net asset 174.81 96.68 -44.7 166.78 72.5
value per
share
(cents)
Net tangible 174.81 96.68 -44.7 166.78 72.5
asset value
per share
(cents)
Total number 9 600 9 600 - 9 600 -
of shares in
issue (`000)
Weighted 9 600 9 600 - 9 600 -
number of
shares in
issue (`000)
After de- After de- % Change After de- %
consolida consolida consolidati Change
tion and tion, on, after
dividend after dividend
dividend and after
and after Section 85
Section
85
Basic 70.11 108.59 54.9 20.03 -81.6
earnings per
share
(cents)
Headline 70.11 108.59 54.9 20.03 -81.6
earnings per
share
(cents)
Dividends 0.00 0.00 NA 0.00 NA
Net asset 166.78 192.41 15.4 103.84 46.0
value per
share
(cents)
Net tangible 166.78 192.41 15.4 103.84 46.0
asset value
per share
(cents)
Total number 9 600 6 189 -35.5 6 189 -
of shares in
issue (`000)
Weighted 9 600 6 189 -35.5 6 189 -
number of
shares in
issue (`000)
Notes:
1. In terms of the Proposed Disposal the company and not the group
will be selling all shares and claims in the subsidiary
companies. A de-consolidation must take place in order for the
company to sell its subsidiaries.
2. R6 730 000 has been paid into the trust account of Fluxmans by
Cenmag, which cash will be retained by Cenmag pursuant to the
Proposed Transactions. Appropriate resolutions will be passed
to ratify the declaration and payment of dividends by the
subsidiaries of the company.
3. In terms of the Proposed Specific Repurchase, the company will
repurchase 3 411 398 ordinary shares at a price of 120 cps.
4. In terms of the Proposed Disposal, the company will dispose of
all it shares and claims in the subsidiary companies.
6. Documentation
A circular containing full details of the Proposed Transactions and
incorporating a notice of general meeting of the company has been
submitted to the JSE for approval and will be posted to shareholders in
due course.
7. Withdrawal of Cautionary Announcement
Shareholders are advised that pursuant to the release of this
announcement, the cautionary announcement is withdrawn.
Johannesburg
31 August 2010
Sponsor
Arcay Moela Sponsors (Pty) Ltd
(Registration number 2006/033725/07)
Date: 31/08/2010 09:23:01 Produced by the JSE SENS Department.
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