| Mon 25 Mar 2002, 0:00 | | Mustek/rectron - Announcement |
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MUSTEK LIMITED RECTRON HOLDINGS LIMITED
Incorporated in the Republic of Incorporated in the Republic of
South Africa South Africa
(Registration number (Registration number
1987/070161/06) 1998/015355/06)
("Mustek" or "the company") ("Rectron")
Share Code: MST Share Code: RCT
ISIN Code: ZAE 000012373 ISIN Code: ZAE 000016622
ANNOUNCEMENT REGARDING
* OFFER BY MUSTEK TO THE SHAREHOLDERS OF RECTRON (EXCLUDING
THE KEY RECTRON EXECUTIVES)
* SUBSEQUENT DELISTING OF RECTRON
1. Introduction
Further to the renewed cautionary announcement dated 28 February 2002,
shareholders are advised that Mustek will make an offer to acquire the
issued shares of Rectron ("the offer"), not presently owned by Mustek
and the key Rectron executives ("the offer shares"). Mustek and the key
Rectron executives own 88,9% of the issued shares of Rectron.
Agreement has been reached between Mustek and the key Rectron
executives to the effect that no offer shall be made in respect of the
shares in Rectron owned by the key Rectron executives. Accordingly
Mustek and the key Rectron executives will, if the offer is accepted by
the requisite majority and the provisions of section 440 of the
Companies Act, 1973 (act 61 of 1973), as amended ("the Act") are
implemented, become the sole holders of the entire issued share capital
of Rectron.
2. Rationale for the offer
The Recton directors are of the opinion that the negative sentiment
towards companies with a small market capitalisation and limited
liquidity will preclude any rapid recovery of the price at which
Rectron shares trade on the JSE Securities Exchange South Africa ("the
JSE"). As a result of the above Rectron is negatively affected in the
following manner:
* Lack of significant institutional and analyst interest;
* An inability to raise equity at what is considered a fair
value and accordingly, to fund future expansion; and
* Management time and expenses related to being listed are not
justifiable.
Mustek will accordingly make an offer to acquire the offer shares in
order to:
* Allow the shareholders in Rectron (excluding the key Rectron
executives) to dispose of their shares at a premium to the
respective market prices (as set out in 3.4) prior to the
renewed cautionary announcement dated 28 February 2002; and
* Effect the delisting of Rectron.
3. Salient Features of the offer
3.1. Mechanics of the offer
Mustek will make an offer to acquire the offer shares in terms of
section 440 of the Act. The offer will be conditional on
acceptance thereof by holders of the offer shares holding not less
than nine-tenths of the offer shares. Mustek reserves the right to
implement a scheme of arrangement in terms of Section 311 of the
Act, should it fail to obtain acceptance by the holders of the
offer shares holding at least nine-tenths of the offer shares.
In the event that acceptance of the offer is obtained from the
holders of not less than nine tenths of the offer shares, Mustek
will invoke the provisions of section 440(K) of the Act and thus
compulsorily acquire all of the outstanding offer shares.
3.2. The offer consideration
Mustek will offer Rectron shareholders (excluding the key Rectron
executives) 80 cents per Rectron share payable in cash. This
represents a premium of 33,3% above the weighted average trading
price for the last 40 trading days prior to 28 February 2002 and a
premium of 50,9% above the weighted average trading price for the
last 200 trading days prior to 28 February 2002. The total
consideration to be received by the holders of the offer shares
will approximate
R 10,6 million.
3.3. Interest
Mustek will agree to pay interest on the total offer consideration
(being the offer shares multiplied by 80 cents) at the daily call
rate as published by The Standard Bank of South Africa Limited
with effect from 17 May 2002, should cheques in respect of the
consideration not have been posted to the holders of the offer
shares by close of business on 17 May 2002.
3.4. Pro Forma Financial Effects
The table below sets out the pro-forma financial effects on a
holder of the offer shares who accepts the offer:
Notes Before After Percentage
acceptanc acceptanc change if
e of the e of the the offer is
offer offer accepted
(cents) (cents)
Market Value per share 1 53 80 50,9%
Market Value per share 2 60 80 33,3%
Market Value per share 3 60 80 33,3%
Net asset value per 4 76 80 5,3%
share
Notes:
1. Based on the weighted average trading price of Rectron for the last 200
trading days up to the day prior to the 28 February 2002.
2. Based on the closing price of Rectron shares on the JSE on the 20 March
2002.
3. Based on the weighted average trading price of Rectron for the last 40
trading days up to the day prior to the 28 February 2002.
4. Based on the net tangible asset value as at 31 December 2001.
5. These effects assume that no interest is paid in terms of 3.3 above.
4. Irrevocable Undertakings
Shareholders holding 88,1% of the offer shares, have furnished
irrevocable undertakings to Mustek that they will accept the offer.
5. Opinions
In accordance with the rules of the Securities regulation panel ("SRP")
the board of Rectron has appointed Grant Thornton Kessel Feintstein
Corporate Finance (Proprietary) Limited ("the independent advisor") to
advise the holders of the offer shares as to whether the terms and
conditions of the offer are fair and reasonable. The opinion of the
independent advisor will be included in the circular to be posted to
Rectron shareholders.
6. Confirmation to the SRP
The SRP has received confirmation that Mustek has sufficient resources
to satisfy the full offer consideration.
7. Listing on the JSE
In the event that the holders of the offer shares holding not less than
nine tenths of the offer shares accept the offer, application will be
made to the JSE for the suspension and subsequent termination of the
listing of Rectron shares on the JSE.
8. Documentation and further announcement
A circular to Rectron shareholders containing full details of the
offer, which is subject to the approvals of the JSE and the SRP, is
currently in the process of being prepared and will be mailed to
Rectron shareholders within 30 days of this announcement or such later
date as approved by the JSE.
A further announcement setting out, inter alia, the salient dates of
the offer will be published in due course.
9. Withdrawal of cautionary announcements
Shareholders are referred to the renewed cautionary announcement issued
by Mustek and Rectron on the 28 February 2002 and are advised that, in
pursuance of this announcement, the said announcement is hereby
withdrawn.
Midrand
25 March 2002
Corporate Advisors to Mustek Sponsor to Mustek and
Transactional Sponsor to
Rectron
Corporate Solutions and Exchange Sponsors
Merchantec
Joint Legal Advisors Independent Advisors to Rectron
Kramer and Viljoen and Fluxman Grant Thornton Kessel
Rabinowitz Raphaely Weiner Feintstein Corporate Finance
(Proprietary) Limited
