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Batepro
Edward L Bateman Limited
(Registration number 1930/002553/06)
(JSE code: ELB ISIN number: ZAE000002374)
("ELB")
Disposal by ELB of its 66% shareholding in Batepro
1. Introduction
Rand Merchant Bank is authorised to announce that ELB has agreed to dispose
of its 66% shareholding in Bateman Project Holdings Limited ("Batepro")
("the disposal") to Charton Investments S.A. ("Charton") for a consideration
of 700 cents per Batepro share. If the consideration is paid after 1
February 2002, interest on the consideration is payable at Investec Bank
Limited's overnight call rate from 1 February 2002 to the date of payment by
Charton. ELB has undertaken, subject to the conditions precedent set out in
paragraph 2 below, to vote in favour of the scheme of arrangement to be
proposed by Charton between Batepro and its shareholders ("the scheme") or,
if any condition precedent to the scheme is not met, to accept an equivalent
substitute offer that may be made by Charton.
ELB shareholders are referred to the Batepro announcement published
elsewhere which sets out full details of the scheme.
2. Conditions precedent
The disposal is subject, inter alia, to the following conditions precedent:
- a majority of ELB shareholders present and voting at a general meeting
passing the necessary ordinary resolution in terms of section 228 of the
Companies Act to approve the disposal;
- obtaining the necessary regulatory approvals, including the approval of
the Competition Commission; and
- successful implementation of the scheme.
3. Rationale for the disposal
So as not to frustrate the growth potential of Batepro, the controlling
shareholders of ELB have agreed that ELB should dispose of its interest in
Batepro. Charton has been identified by the management of Batepro as being
most suitable to participate in the strategic development of Batepro both
locally and internationally.
After the disposal ELB will have a portfolio of industrial interests with a
net asset value of approximately R80 million and approximately R320 million
in cash. Suitable new investments will be identified for ELB in due course,
and consideration will therefore have to be given to a change of sector for
ELB on the JSE Securities Exchange South Africa at the appropriate time.
4. Change of name
In terms of the agreement relating to the disposal, ELB and its subsidiaries
will be required to remove all reference to the name "Bateman" from their
names. As a consequence ELB shareholders will, at the forthcoming
shareholders' meeting to be held to approve the disposal, also be asked to
approve a change of name for ELB.
5. Financial effects of the disposal
The table below sets out the financial effects of the disposal on the
headline earnings and net asset value per ELB share:
Before the After the
disposal disposal Percentage
(cents) (cents) change
Market value per
Batepro share
- 21 June 2001 5001 7002 40.0
Market value per
Batepro share
- 26 October 2001 6101 7002 14.8
Headline earnings
per ELB share 1383 1075 (22.5)
Net asset value per
ELB share 9374 12945 38.1
Notes:
1. "Market value before the disposal" is the closing market price of a
Batepro share on 21 June 2001, being the trading day preceding the
publication of the first cautionary announcement, and on 26 October 2001,
the last practicable trading day preceding the publication of this
announcement.
2. "Market value after the disposal" is the consideration of 700 cents per
Batepro share payable by Charton in terms of the disposal.
3. "Headline earnings before the disposal" is the headline earnings per ELB
share for the financial year ended 30 June 2001.
4. "Net asset value before the disposal" is the net asset value per ELB
share as reflected in the audited balance sheet at 30 June 2001.
5. "Headline earnings after the disposal" and "net asset value after the
disposal" are calculated on the assumption that the consideration had been
received on 1 July 2000 and invested for the full financial year at an after-
tax rate of 7% per annum.
6. Undertakings
ELB shareholders representing 50.89% of ELB's shares in issue have signed
irrevocable undertakings to vote in favour of the disposal.
7. Opinions
The board of directors of ELB has appointed Rand Merchant Bank to advise
them on the appropriateness of the consideration of 700 cents per Batepro
share to be received in terms of the scheme.
The opinions of Rand Merchant Bank and the board of directors of ELB will be
incorporated in the circular to be forwarded to ELB shareholders referred to
paragraph 8 below.
8. Documentation
A circular containing full details of the disposal and name change and a
notice of general meeting will be posted to ELB shareholders on or about 27
November 2001.
Boksburg
30 October 2001
Adviser and sponsor to ELB
Rand Merchant Bank
Corporate Finance
A Division of FirstRand Bank Limited
Attorneys to ELB
Werksmans
Attorneys
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