| Thu 18 Oct 2001, 0:00 | | Proposed Voluntary Termination Of Wescape's Listin |
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Western Cape Property Company Limited
(Incorporated in the Republic of South Africa)
Company Registration Number 1987/000770/06
(Share Code - WSC) (ISIN Code : ZAE000014411)
("WesCape" or "the Company")
Proposed voluntary termination of Wescape's listing
unconditional offer to Wescape's minority shareholders
1. Introduction
Trinity Corporate Finance is authorised to announce that:
- the directors of the Company have resolved, subject to the requisite
shareholder approval, to apply for the voluntary termination of the listing
of the WesCape shares on and the Company's listing from the JSE Securities
Exchange South Africa ("JSE") ("the delisting"); and
- Catalyst Holdings (Proprietary) Limited ("Catalyst"), one of the
controlling shareholders of WesCape, intend extending an offer to the
WesCape minority shareholders to acquire all their shares in the Company at
90 cents per share ("the offer").
2. History and background
2.1 The Company was incorporated in February 1987 and listed on the JSE in
May that year as FairCape Homes Limited. It subsequently changed its name to
San Vito Developments Limited in 1994. During and from March 1998 Catalyst
Property Asset Managers (Proprietary) Limited undertook certain aspects of
the asset management of the business and the Company's name was changed to
Western Cape Property Company Limited.
2.2 WesCape's current business is that of property development and trading.
3. The delisting
3.1 The WesCape directors are of the opinion that, given inter alia:
the current negative sentiment towards small capitalisation companies listed
on the JSE;
- the current low price earnings multiples applied to property development
companies listed on the JSE;
- the high costs associated with maintaining a listing on the JSE;
WesCape's historic low share trading volumes and activity on the JSE; and
- the Company's inability to fund further growth and developments through
the issue of scrip as a result of its current low share price,
there appears to be little justification and need for the continued listing
of WesCape.
3.2 As a result of the above, and notwithstanding the Company's annual
growth in earnings per share of 107% over the past five years, the directors
of the Company, including the non-executive directors, have unanimously
resolved to propose that the shareholders of the Company (in general
meeting) approve the ordinary resolution to voluntarily terminate the
listing of the WesCape shares on and the Company's listing from the JSE with
effect from the close of trading on Friday, 21 December 2001.
3.3 Those directors holding approximately 52% of the balance of the WesCape
shares in issue, after excluding the shares held by Catalyst and Cape of
Good Hope Bank Limited, have undertaken to vote in favour of the delisting.
4. The offer
4.1 Price
Catalyst has agreed to extend an unconditional offer to the WesCape minority
shareholders to acquire all their WesCape shares at 90 cents per share.
4.2 Section 440K compulsory acquisition
In the event the offer is accepted by not less than 90% of the WesCape
shareholders entitled to accept the offer, Catalyst intends invoking the
provisions of Section 440K of the Companies Act, 1973 (Act 61 of 1973), as
amended ("the Act"), which will result in the remaining WesCape shareholders
being obliged to sell and Catalyst being obliged to acquire their WesCape
shares in terms of the offer ("the compulsory acquisition").
4.3 Future participation
In the event the compulsory acquisition is implemented, Catalyst intends
incorporating a special purpose vehicle for those WesCape shareholders who
wish to continue their investment in the Company. Further detail in this
regard will be set out in the circular to be posted to WesCape shareholders
referred to in 8 below.
4.4 Cash confirmation
The Securities Regulation Panel ("SRP") has been satisfied by Cape of Good
Hope Bank Limited that Catalyst has sufficient cash resources to honour its
commitments in terms of the offer and the compulsory acquisition.
5. Financial effects
The pro forma comparison of the financial effects on a WesCape shareholder
accepting the offer or remaining a shareholder of the Company, based on the
notes and assumptions set out below, are as follows:
Accepting Not Change Percentage change
the offer Accepting if the
(cents) the offer offer
(cents) accepted
(cents)
Earnings (2)(5) 4.6 34 (29.4) (86.5%)
Net asset value 90 107 (17) (15.9%)
Net realisable 90 95 (5) (5.3%)
value (3)
Market value (4) 90 52 38 73.1%
Income (5) 4.6 0 4.6 infinite
Notes and assumptions:
(1) The financial effects are based on the audited results of the Company
for the financial year ended 31 December 2000.
(2) Earnings and headline earnings are the same. The effect on earnings is
meaningless as WesCape is a development company and currently all earnings
are retained to reduce the high level of gearing.
(3) The net realisable value is derived after taking into account, inter
alia, provisions for the revaluation of assets (to more recent market values
given the current economic climate and market conditions), Secondary Tax on
Companies, interest and normal income tax.
(4) The price is based on the closing price of the WesCape shares on the JSE
on the day immediately preceding this announcement, namely Wednesday, 18
October 2001.
(5) No dividends were declared or paid by WesCape in respect of the
financial year ended 31 December 2000. These calculations assume a marginal
tax rate of 42% (in the case of individuals) and are based on the after-tax
interest that a WesCape shareholder accepting the offer could have earned
had he invested an amount equivalent to the offer consideration for a 12-
month period at a nominal rate of 8.5% compounded monthly in arrear.
In essence, the offer price is at a 73.1% premium to the current market
price of the WesCape shares trading on the JSE and at a discount of 15.9% to
the stated net asset value of the WesCape share.
6 Conditions precedent
The delisting is subject to the fulfillment of the following conditions
precedent:
- that more than 50% of the WesCape shareholders (present or represented by
proxy at the general meeting convened to consider and approve the ordinary
resolution for the delisting), excluding the controlling shareholders, their
associates and any party acting in concert, vote in favour of the delisting;
and
- the JSE granting such approvals as are necessary to give effect to the
delisting.
The offer is unconditional.
7. Salient dates and times
The salient dates and times pertaining to the delisting, the offer and the
compulsory acquisition are as follows:
2001 / 2002
Offer opens at 09:00 on Thursday, 15 November
Last day to trade in order to be Thursday, 22 November
eligble to vote at the general
meeting
Record date in order to be eligible Thursday, 29 November
to vote at the general meeting
Last day for the receipt of forms
of proxy in respect of the general Friday, 30 November
meeting (to approve the delisting)
by 09:00 on
General meeting to be held at 09:00 Monday, 3 December
on
Announce results of the general Tuesday, 4 December
meeting on
Last day to trade in order to Friday, 7 December
participate in the offer
WesCape shares suspended from Monday, 10 December
trading on the JSE with effect from
the commencement of trading on
Record date to participate in the Friday, 14 December
offer
Offer closes at 16:00 on Friday, 14 December
Announce the results of the offer Tuesday, 18 December
on
Payment and distribution date on Tuesday, 18 December
Notice to WesCape shareholders in Tuesday, 18 December
terms of Section 440K of the Act
published in the press on
Termination of WesCape's listing on
the JSE from the commencement of Friday, 21 December
trading on
Compulsory acquisition of WesCape Tuesday, 29 January
shares becomes effective on
8. Documentation
A circular to WesCape shareholders containing details of the delisting and
incorporating a notice convening a general meeting of WesCape shareholders,
as well as the offer and notification in terms of Section 440K of the Act in
respect of the compulsory acquisition, is being prepared and will, subject
to the approval of the JSE and the SRP, be posted to WesCape shareholders
within 30 days of this announcement.
Cape Town
19 October 2001
Corporate adviser
Trinity Corporate Finance
A division of Trinity Capital (Proprietary) Limited
(Registration number 2000/004552/07)
Sponsor
ENF Sponsors (Proprietary) Limited
(Registration number 2000/027636/07)
Attorneys
Cliffe Dekker Fuller Moore Inc
(Registration number 1998/018173/02)
