| Mon 24 Dec 2001, 0:00 | | Pangbourne/cbd/pioneer - Terms Announcement |
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TERMS ANNOUNCEMENT
Announcement regarding:
- the acquisition by Pangbourne of all the assets and liabilities of CBD and
Pioneer, as one indivisible transaction, with effect from 31 March 2002, in
exchange for the issue of new combined units in Pangbourne;
- the proposed winding-up of the unit portfolio of CBD ("the CBD unit
portfolio") and the unit portfolio of Pioneer ("the Pioneer unit portfolio")
in terms of section 25 of the Unit Trusts Control Act, No. 54 of 1981 ("UTC
Act"); and
- the de-listing of the units in CBD ("the CBD units") and the units in
Pioneer ("the Pioneer units") from the JSE Securities Exchange South Africa
("JSE").
1. INTRODUCTION
Further to the cautionary announcement dated 29 October 2001, the
directors of Pangbourne and SPTM as well as ABSA Bank Limited ("the trustee
of CBD and Pioneer") have agreed to implement, subject to the fulfilment of
the conditions precedent set out in paragraph 7 below ("the conditions
precedent"), the following:
- the acquisition by Pangbourne of all the assets and liabilities of CBD
(including all the shares held by CBD in fixed property companies) with
effect from 31 March 2002, in exchange for the issue of 46 412 250 new
combined units in Pangbourne ("the CBD transaction");
- the acquisition by Pangbourne of all the assets and liabilities of
Pioneer (including all the shares held by Pioneer in fixed property
companies) with effect from 31 March 2002, in exchange for the issue of 53
915 670 new combined units in Pangbourne ("the Pioneer transaction");
- the application to the High Court of South Africa ("the Court") for
the Orders approving the winding-up of the CBD unit portfolio and the
Pioneer unit portfolio in terms of section 25 of the UTC Act ("the Orders");
and
- the de-listing of the CBD units and the Pioneer units from the JSE.
The above actions are hereafter collectively referred to as "the
proposed transactions".
It is the intention of Pangbourne, upon implementation of the proposed
transactions, to wind-up or deregister all the fixed property companies
which will be acquired in terms of the proposed transactions in order to
ensure that the properties themselves are held directly by Pangbourne.
2. RATIONALE FOR THE PROPOSED TRANSACTIONS
The directors of Pangbourne and SPTM are of the view that the proposed
transactions will be beneficial to the combined unitholders of Pangbourne,
the unitholders of CBD and the unitholders of Pioneer respectively ("all
unitholders") in light of the following considerations:
- economies of scale in the management of the combined property
portfolio will be realised;
- there will be a saving of administration costs and trust expenses
associated with property unit trusts;
- it is anticipated that the combination of the three property
portfolios will result in improved net income per Pangbourne combined unit
which expected improvement will benefit all unitholders;
- the acquisition of the ungeared CBD and Pioneer property portfolios
will result in Pangbourne's ratio of net borrowings to property values
decreasing on a pro forma basis as at 30 June 2001 from 37,5% to 14,4%;
- all unitholders will benefit from a broader spread of properties and
from the increase in value of the combined property portfolio to
approximately R1,3 billion, which will reduce the risk associated with
individual tenants or properties;
- the tradeability of Pangbourne combined units on the JSE is expected
to improve due to the larger market capitalisation of Pangbourne, the
increased number of Pangbourne combined units in issue and the enlarged pool
of Pangbourne combined unitholders; and
- after the proposed transactions, Pangbourne's market capitalisation is
expected to exceed R1 billion. This should enhance investors' and sector
analysts' awareness of Pangbourne, which, together with the increased
liquidity of Pangbourne combined units, should allow for a positive re-
rating to the benefit of all unitholders.
3. NATURE OF BUSINESS OF PANGBOURNE
Pangbourne is listed in the Real Estate - "Property Loan Stock" sector
of the JSE lists. Pangbourne's property portfolio consists of investments in
industrial, commercial and retail properties in South Africa's major
centres.
4. NATURE OF BUSINESS OF CBD
CBD is a property unit trust established and registered in terms of the
UTC Act and listed in the Real Estate - "Property Unit Trusts" sector of the
JSE lists. The property portfolio of CBD consists of office and retail
properties located primarily in Gauteng and other major centres.
5. NATURE OF BUSINESS OF PIONEER
Pioneer is a property unit trust established and registered in terms of
the UTC Act and listed in the Real Estate - "Property Unit Trusts" sector of
the JSE lists. The property portfolio of Pioneer consists predominantly of
small to medium sized industrial properties located in Gauteng.
6. PURCHASE CONSIDERATION
6.1 The purchase consideration for the CBD transaction is to be
discharged by the issue of renounceable letters of allotment, credited as
fully paid, for 46 412 250 combined units in Pangbourne.
6.2 The purchase consideration for the Pioneer transaction is to be
discharged by the issue of renounceable letters of allotment, credited as
fully paid, for 53 915 670 combined units in Pangbourne.
6.3 The trustee of CBD and Pioneer has undertaken to renounce the rights
to the above combined units in Pangbourne ("the Pangbourne consideration
units") in favour of CBD unitholders and Pioneer unitholders respectively,
with the effect that:
CBD unitholders will receive 38 Pangbourne combined units for
every 100 CBD units held; and
Pioneer unitholders will receive 40 Pangbourne combined units
for every 100 Pioneer units held.
6.4 Subject to the fulfilment of the conditions precedent as set out
below, the Pangbourne consideration units will be listed on the JSE on the
Real Estate - "Property Loan Stock" sector of the JSE lists on or about 4
April 2002.
7. CONDITIONS PRECEDENT
The proposed transactions are subject to, inter alia, the fulfilment of
the following conditions precedent:
- the agreements in respect of the CBD transaction and the Pioneer
transaction becoming unconditional;
- the amendment of the trust deeds in respect of CBD and Pioneer to
provide for general meetings of unitholders in order to consider, inter
alia, the proposed transactions;
- the sale of shares agreement, to be concluded between Sage Property
Holdings Limited, Old Mutual Life Assurance Company (South Africa) Limited
("Old Mutual"), BP Southern Africa Pension Fund, Sapref Pension Fund,
Pangbourne and SPTM, in terms of which Pangbourne is to acquire the entire
issued share capital of SPTM, becoming unconditional;
- the approval by Pangbourne shareholders and Pangbourne debenture
holders in separate general meetings ("the Pangbourne general meetings") of
the CBD transaction and the Pioneer transaction;
- the approval by CBD unitholders in general meeting ("the CBD general
meeting") of the CBD transaction and the de-listing of the CBD units from
the JSE;
- the approval by Pioneer unitholders in general meeting ("the Pioneer
general meeting") of the Pioneer transaction and the de-listing of the
Pioneer units from the JSE;
- the Registrar of Unit Trust Companies approving, insofar as may be
necessary, the proposed transactions;
- the approval of the Competition Commission;
- the granting by the Court of the Orders; and
- the approval by the JSE of the listing of the Pangbourne consideration
units.
8. INCOME DISTRIBUTIONS
Subject to the fulfilment of the conditions precedent, income
distributions in respect of the period 1 July 2001 to 31 March 2002 will be
paid in respect of Pangbourne combined units in issue, prior to the issue of
the Pangbourne consideration units and an income distribution in respect of
the period 1 October 2001 to 31 March 2002 will be paid in respect of CBD
units in issue and Pioneer units in issue.
The above income distributions are hereafter collectively referred to as
"the income distributions".
9. PRO FORMA FINANCIAL EFFECTS OF THE PROPOSED TRANSACTIONS ON PANGBOURNE
COMBINED UNITHOLDERS
Before After
per Pangbourne per Pangbourne
combined unit combined unit
Change
(cents) (cents) (%)
Earnings (1) 101,35 85,76
(15,4)
Headline earnings (1) 80,29 81,49 1,5
Net asset value (2) 571,24 571,66 0,1
Tangible net asset value (2) 606,67 603,85 (0,5)
Notes:
1. The earnings and headline earnings per Pangbourne combined unit, as set
out in the "Before" column of the table, are based upon the audited
financial results of Pangbourne for the year ended 30 June 2001. The
earnings and headline earnings per Pangbourne combined unit, as set out in
the "After" column of the table, have been calculated using the CBD and
Pioneer unaudited earnings and headline earnings for the 12-month period
ended 30 September 2001 and on the assumptions that the proposed
transactions were effected as at 1 October 2000 and that the Pangbourne
consideration units were issued in full on that date. The earnings and
headline earnings of CBD and Pioneer for the 12-month period ended 30
September 2001 have been calculated by adding the earnings and headline
earnings for the year ended 31 March 2001 and for the six months ended 30
September 2001 and deducting the earnings and headline earnings for the six
months ended 30 September 2000.
2. The net asset value and tangible net asset value per Pangbourne
combined unit, as set out in the "Before" column of the table, are based
upon the audited balance sheet of Pangbourne as at 30 June 2001. The net
asset value and tangible net asset value per Pangbourne combined unit, as
set out in the "After" column of the table, have been calculated using the
unaudited balance sheets of CBD and Pioneer as at 30 September 2001 (for the
purpose of the tangible net asset value) and by adding the Pangbourne
capital and reserves as at 30 June 2001 to the value of the new Pangbourne
consideration units using the Pangbourne combined unit price as at 20
December 2001 of R5,72 per combined unit, based on the assumptions that the
proposed transactions were effected as at 30 September 2001 and that the
Pangbourne consideration units were issued in full on that date.
10. PRO FORMA FINANCIAL EFFECTS OF THE CBD TRANSACTION ON CBD UNITHOLDERS
Before After
per CBD unit per CBD unit Change
(cents) (cents) (%)
Earnings (1) 38,32 32,59 (15,0)
Headline earnings (1) 34,12 30,97 (9,2)
Net asset value (2) 203,28 217,23 6,9
Tangible net asset value (2) 203,28 229,46 12,9
Notes:
1. The earnings and headline earnings per CBD unit, as set out in the
"Before" column of the table, have been calculated using the CBD unaudited
earnings and headline earnings for the 12-month period ended 30 September
2001. The earnings and headline earnings per CBD unit, as set out in the
"After" column of the table, have been calculated using the Pangbourne
earnings and headline earnings for the year ended 30 June 2001 and the CBD
unaudited earnings and headline earnings for the 12-month period ended 30
September 2001 and on the assumptions that the proposed transactions were
effected as at 1 October 2000 and that the Pangbourne consideration units
were issued in full on that date. The earnings and headline earnings of CBD
for the twelve month period ended 30 September 2001 have been calculated by
adding the earnings and headline earnings for the year ended 31 March 2001
and for the six months ended 30 September 2001 and deducting the earnings
and headline earnings for the six months ended 30 September 2000.
2. The net asset value and tangible net asset value per CBD unit, as set out
in the "Before" column of the table, are based on the unaudited balance
sheet of CBD as at 30 September 2001. The net asset value and tangible net
asset value per CBD unit, as set out in the "After" column of the table,
have been calculated by using the audited balance sheet of Pangbourne as at
30 June 2001 and by adding the value of the new Pangbourne consideration
units using the Pangbourne combined unit price as at 20 December 2001 of
R5,72 per combined unit, based on the assumptions that the CBD transaction
was effected as at 30 September 2001 and that the Pangbourne consideration
units were issued in full on that date.
11. PRO FORMA FINANCIAL EFFECTS OF THE PIONEER TRANSACTION ON PIONEER
UNITHOLDERS
Before per After per
Pioneer unit Pioneer unit Change
(cents) (cents) (%)
Earnings (1) 19,82 34,31 73,1
Headline earnings (1) 30,45 32,60 7,0
Net asset value (2) 263,56 228,66 (13,2)
Tangible net asset value (2) 263,56 241,54 (8,4)
Notes:
1. The earnings and headline earnings per Pioneer unit, as set out in the
"Before" column of the table, have been calculated using the Pioneer
unaudited earnings and headline earnings for the 12-month period ended 30
September 2001. The earnings and headline earnings per Pioneer unit, as set
out in the "After" column of the table, have been calculated using the
Pangbourne earnings and headline earnings for the year ended 30 June 2001
and the Pioneer unaudited earnings and headline earnings for the 12-month
period ended 30 September 2001 and on the assumptions that the proposed
transactions were effected as at 1 July 2000 and that the Pangbourne
consideration units were issued in full on that date. The earnings and
headline earnings of Pioneer for the twelve month period ended 30 September
2001, have been calculated by adding the earnings and headline earnings for
the year ended 31 March 2001 and for the six months ended 30 September 2001
and deducting the earnings and headline earnings for the six months ended 30
September 2000.
2. The net asset value and tangible net asset value per Pioneer unit, as set
out in the "Before" column of the table, are based on the unaudited balance
sheet of Pioneer as at 30 September 2001. The net asset value and tangible
net asset value per Pioneer unit, as set out in the "After" column of the
table, have been calculated by using the audited balance sheet of Pangbourne
as at 30 June 2001 and by adding the value of the new Pangbourne
consideration units using the Pangbourne combined unit price as at 20
December 2001 of R5,72 per combined unit, based on the assumptions that the
Pioneer transaction was effected as at 30 June 2001 and that the Pangbourne
consideration units were issued in full on that date.
12. OPINIONS, RECOMMENDATIONS AND UNDERTAKINGS
12.1 The directors of Pangbourne have considered the terms and
conditions of the proposed transactions and unanimously recommend that
Pangbourne combined unitholders vote in favour of the CBD transaction and
the Pioneer transaction at the Pangbourne general meetings. The directors of
Pangbourne intend voting the Pangbourne combined units under their control
in favour of the requisite resolutions to implement the CBD transaction and
the Pioneer transaction.
12.2 The directors of SPTM have considered the terms and conditions of
the proposed transactions and unanimously recommend that CBD unitholders and
Pioneer unitholders vote in favour of the proposed transactions at the CBD
general meeting and the Pioneer general meeting respectively.
13. RELATED PARTY
The JSE considers that Old Mutual, being a material Pangbourne combined
unitholder and a material CBD unitholder, is a related party to the CBD
transaction and accordingly may not vote on the CBD transaction at either
the CBD general meeting or the Pangbourne general meetings.
14. CIRCULARS TO PANGBOURNE COMBINED UNITHOLDERS,
CBD UNITHOLDERS AND PIONEER UNITHOLDERS
Circulars incorporating notices of the Pangbourne general meetings, the CBD
general meeting and the Pioneer general meeting (collectively, "the general
meetings") will be posted to the respective unitholders on or about 28
January 2002.
15. SALIENT DATES
The salient dates for the proposed transactions are as follows:
Posting of circulars to the respective Pangbourne combined unitholders,
CBD unitholders and Pioneer unitholders on or about Monday, 28 January 2002
Last date to lodge forms of proxy for the general meetings by Monday, 18
February 2002
Pangbourne general meeting of shareholders at 10:00 on Tuesday, 19
February 2002
Pangbourne general meeting of debenture holders at 10:30 on Tuesday, 19
February 2002
CBD general meeting at 11:30 on Tuesday, 19 February 2002
Pioneer general meeting at 12:00 on Tuesday, 19 February 2002
Results of the general meetings announced in the press on Wednesday, 20
February 2002
Hearing of the application to Court for the Orders Tuesday, 12 March 2002
Final dates announced in the press Wednesday, 13 March 2002
Last date to trade in Pangbourne combined units, CBD and Pioneer units in
order to participate in the income distributions Wednesday, 20 March 2002
Pangbourne combined units, CBD and Pioneer units to commence trading ex
the income distributions on Friday, 22 March 2002
Record date for the income distributions Thursday, 28 March 2002
Payment date for the income distributions Tuesday, 2 April 2002
Suspension of listing of CBD and Pioneer units
on the JSE, from the close of trade on Wednesday, 3 April
Listing of Pangbourne consideration units on the JSE Thursday, 4 April
2002
Dates are subject to change and are, inter alia, dependent upon when the
Competition Commission issues the necessary clearance certificates. If
required,
a further announcement will be made.
Johannesburg
21 December 2001
Merchant bank and
sponsor to Pangbourne
SCMB
Standard Corporate and Merchant Bank
Sponsor to CBD and Pioneer
ABSA
Corporate & Merchant Bank
Corporate Finance
Corporate advisers to CBD, Pioneer and SPTM
Grant Thornton Kessel Feinstein
Corporate Finance (Pty) Ltd
Corporate law advisers and consultants to Pangbourne
Edward Nathan & Friedland
Attorneys to CBD, Pioneer and SPTM
Werksmans Incorporated
