Ppc Bid For Porthold Of Zimbabwe Is A Win-win Deal
PRETORIA PORTLAND CEMENT COMPANY LIMITED
All parties gain in PPC's US $54-million proposed acquisition of Porthold of
Zimbabwe.
According to the scheme of arrangement document published today, PPC enters
a higher-growth market.
The document explains: "Cement sales in developing markets are growing at a
faster pace than in developed markets. In Africa, the relatively developed
SA economy is showing slower growth in the demand for cement in comparison
with other African economies Porthold presents PPC with a unique opportunity
to benefit from regional growth. "
Porthold also offers PPC considerable synergy with its SA operations and
good export prospects. PPC's operational and technical expertise and its
competitive sourcing will also be major advantages.
Said PPC chief executive, John Gomersall: "Porthold became available for
sale during a difficult time for the Zimbabwean economy. We believe Zimbabwe
will recover strongly in the medium term and that this investment will be
critical to the company's longer term strategy in the region."
For every 100 Porthold shares PPC is offering the cash equivalent of US
$47.277 plus 2.447 new PPC shares (the cash and share option); or 6.724 PPC
shares (the all share option). The offer equates to US $54-million but the
price could vary slightly from this, depending on the PPC share price on the
day it assumes control.
At the scheme meeting a majority of shareholders representing 75% of the
shares - excluding Anglo American of Zimbabwe - will have to sanction the
scheme. PPC already has acceptance of its offer from shareholders
representing 68%. If this proportion accept, 100% Porthold will be
acquired (subject to sanctioning of the High Court of Harare) and Porthold
will be delisted from the Zimbabwean Stock Exchange.
Whether or not it obtains 100% of Porthold, PPC will apply for a secondary
listing in Zimbabwe, so that shareholders who support the Scheme will be
able to trade their PPC shares on that stock exchange. Should insufficient
acceptance be obtained, an unconditional offer will be extended to all
shareholders of Porthold.
Had the scheme been in place in the year to September 2000, PPC
shareholders' earnings per share would have been diluted by 1.8%-2.2% and
net asset value by 4.9%-6.8%.
Taking account of the Porthold share price on December 7, the last day
before publication of the first cautionary announcement, Porthold
shareholders have scored a 249% to 300% gain in market price.
PricewaterhouseCoopers of Zimbabwe and the board of Porthold have declared
the offer fair and reasonable to Porthold shareholders.
The reserve banks of both South Africa and Zimbabwe have approved the
acquisition. The only conditions precedent for passage of the scheme are 75%
approval by Porthold minority shareholders and the subsequent approval by
the High Court of Zimbabwe.
Ends
Issued by: David Carte, Meropa Communications (Pty) Ltd
Tel +27-11-772-1010, 082-440-2608
On behalf of: PPC (Pretoria Portland Cement Company Limited)
Contact: John Gomersall, chief executive
Peter Nelson, financial director
Tel +27-11-488-1700
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