| Tue 13 Nov 2001, 0:00 | | Offer To Acquire All The Shares Of Minority Shareh |
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PROPOSED DELISTING OF MONEX
BoE Bank/Monex Limited
BoE BANK LIMITED MONEX LIMITED
(Incorporated in the Republic (Registration number
of South Africa) 1968/010805/06)
(Registration number (Incorporate in the Republic
1951/000847/06) of South Africa)
("BoE Bank") Share Code: MNX
ISIN: ZAE000025748
("Monex" or "the Company")
OFFER TO ACQUIRE ALL THE SHARES OF MINORITY SHAREHOLDERS IN MONEX AND THE
PROPOSED DELISTING OF MONEX
1. INTRODUCTION
BoE Merchant Bank, a division of BoE Bank Limited is authorised to announce
that BoE Bank Limited ("the Offeror") will make an offer to minority
shareholders of Monex ("the offer") to acquire all their shares in Monex
("the offer shares"). Pursuant to the implementation of the offer,
application will be made to the JSE Securities Exchange South Africa ("JSE")
for the delisting of Monex.
After the rights offer undertaken by Monex, which was completed in September
2001, the Offeror, its controlling shareholder BoE Limited and subsidiaries
of BoE Limited ("the BoE Group") hold approximately 74% of the issued share
capital of Monex. Monex minorities who collectively hold approximately 55%
of the offer shares have irrevocably undertaken to accept the offer and to
vote in favour of the ordinary resolution to delist the Company.
A summary of the terms and conditions of the offer is set out below, full
details of which will appear in the circular to be dispatched to Monex
shareholders in accordance with paragraph 7.
2. TERMS OF THE OFFER AND PROPOSED DELISTING OF MONEX
2.1 The offer price
The offer consideration payable in cash by the Offeror for the offer shares
pursuant to the offer, assuming full acceptance of the offer, will be
approximately R93 567 470 in aggregate, equating to 80 cents per Monex
share. The offer price represents a premium of 60% to the closing price of
Monex shares on the JSE on Monday, 12 November 2001, being the last trading
day prior to this announcement and a premium of 45% to the 30 day volume
weighted average closing price to 12 November 2001. If the offer price is
not paid by 28 February 2002, the amount of 80 cents will bear interest at
the overnight call rate of BoE Bank Limited from such date to the date of
payment.
2.2 Mechanism for the offer
The Offeror intends to implement the offer by means of either a scheme of
arrangement in terms of section 311 of the Companies Act, 1973 (Act 61 of
1973), as amended ("the Act"), or should the scheme of arrangement not be
successfully implemented, by means of an offer to minority shareholders of
Monex. In the event of an offer to minority shareholders of Monex and if
Monex minority shareholders holding 90% or more of the offer shares accept
the offer, the Offeror will invoke the provisions of section 440K and the
shares of Monex shareholders who have not accepted the offer will be
compulsory acquired.
2.3 Delisting of Monex
Irrespective of the mechanism utilised or the level of acceptance of the
offer, application will be made to the JSE for the delisting of Monex. In
terms of the JSE Listings Requirements, shareholders of Monex, excluding
controlling shareholders, must approve the delisting by way of an ordinary
resolution in general meeting. Accordingly, companies in the BoE Group will
not be entitled to vote in respect of the proposed delisting. Irrevocable
undertakings to vote in favour of the proposed delisting have been received
from shareholders holding approximately 55% of the shares entitled to vote
in respect of the ordinary resolution to delist the Company. A general
meeting, at which the proposal to delist the Company will be tabled, will be
held prior to the Scheme Meeting.
3. RATIONALE FOR THE DELISTING
The directors of Monex have reviewed the rationale for being listed and are
of the opinion that costs outweigh the benefits and that the Company should
be delisted. The factors considered include:
- the ability of Monex to raise capital through its current listing is
limited as confirmed in the recent rights offer, in which only 18% of the
additional new shares were taken up by minority shareholders;
- the current negative market sentiment towards small market capitalisation
companies on the JSE appears unlikely to change in the near future and
investors have shown a low level of interest in Monex shares as evidenced by
the low liquidity of the Company's shares; and
- the costs of maintaining the listing are significant.
The tradability of shares in an unlisted environment is limited and
therefore a simultaneous offer to minority shareholders has been proposed by
the Offeror to ensure that minority shareholders have the opportunity to
exit their investment at a premium to the market price.
4. FINANCIAL EFFECTS
The following shows the financial effects on a Monex shareholder accepting
or rejecting the offer:
Reject Accept Increase/(Decrease)
Offer: Offer attributable to
shareholders
accepting the offer
%
(Cents) (Cents)
Market value
30 day weighted average 55 1 80 45%
to 12 November 2001
Closing market price on 50 2 80 60%
12 November 2001
Earnings/(loss) per (80,3) 3 2,25 -
share
Headline (20,6)3 2,25 -
earnings/(loss) per
share
Net asset value 89,4 4 80 (11%)
Notes:
(1)Based on the volume weighted average closing price of Monex shares over
the 30 trading days to 12 November 2001, being the last trading day prior to
this announcement.
(2) Based on the closing price of Monex shares on the trading day prior to
the issue of this announcement
(3) From the group published unaudited interim results for the six months
ended 30 September 2001
(4) From the group published unaudited interim results at 30 September 2001
(5) Earnings and headline earnings assuming acceptance of the offer is
calculated on the assumption that the proceeds of the offer would have borne
interest at a call rate of 9,5% per annum for the six months to 30 September
2001, less the maximum individual tax rate applicable.
5. CONFIRMATION OF FUNDING
The Securities Regulations Panel ("SRP") has received confirmation that the
Offeror has adequate funds available to honour its commitments in terms of
the offer.
6. DIRECTOR'S RECOMMENDATIONS
In accordance with the rules and regulations of the SRP Code on Take-overs
and Mergers, the board of directors of Monex has appointed KPMG as
independent adviser to evaluate the terms and conditions of the offer.
The views of the independent adviser and the board of Monex will be
contained in the offer document to be sent to shareholders in accordance
with paragraph 7.
7. OFFER DOCUMENT AND NOTICE OF GENERAL MEETING
An offer document containing a notice of the general meeting relating to the
proposal to delist will, subject to the approval of the JSE and SRP, be
dispatched to shareholders within 30 days. A further announcement containing
the salient dates and times of the offer will be made in due course.
13 November 2001
Corporate adviser Independent adviser and lead sponsor Co-sponsor
BoE Merchant Bank KPMG BoE Securities
