| Tue 23 Apr 2002, 0:00 | | Proposed Scheme Of Arrangement To The Shareholders |
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NATURAL HEALTH HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No 1998/007365/06)
Share code: NTL ISIN ZAE 000022638
("NHH" or "the group")
NUTRI GLOBAL LIMITED
(incorporated in the Cayman Islands)
(Registration No 84050)
("Nutri Global")
PROPOSED SCHEME OF ARRANGEMENT TO THE SHAREHOLDERS OF NHH
1. INTRODUCTION
Further to the offer announcement dated 12 April 2002, The Janus Corporation
(Pty) Limited is authorised to announce that Nutri Global has extended the
offer, by means of a scheme of arrangement to be proposed ("the scheme") in
terms of section 311 of the Companies Act, 1973 (Act 61 of 1973), as amended
("the Act"), to the members of NHH registered as such at the record date
(other than Cabot Janus Private Equity I Limited, RSA Holdings Limited and
TN Wall / TN Wall Family Trust) ("the scheme participants"), for the
acquisition of all their NHH shares for a consideration amounting to 25
cents per NHH share ("the scheme consideration").
If any of the conditions precedent to the scheme as set out in paragraph 8
below ("the conditions precedent") are not fulfilled, Nutri Global may, at
its election, extend a substitute offer in terms of section 440K of the Act
to scheme participants in terms of which scheme participants will be
entitled to accept a substitute offer in respect of their NHH shares for the
same consideration as the scheme consideration ("the substitute offer").
2. BACKGROUND AND RATIONALE FOR THE SCHEME
2.1 Background
Nutri Global, an offshore company, has made an offer to acquire the entire
issued share capital of NHH other than the shares held by Cabot Janus
Private Equity I Limited, RSA Holdings Limited and TN Wall/TW Wall Family
Trust, in order to expand and develop its international business in the
alternative health care business.
2.2 Rationale for the scheme
In order to meet its objectives, Nutri Global has proposed that the offer be
implemented by way of a scheme of arrangement to be sanctioned by the High
Court.
If for any reason the scheme is not approved by scheme members or sanctioned
by the Court, Nutri Global may, at its discretion, implement the substitute
offer.
3. THE SCHEME CONSIDERATION
The scheme consideration payable by Nutri Global will be a cash amount of 25
cents per NHH share being an aggregate consideration of R30,98 million.
Nutri Global has also agreed to pay interest on the scheme consideration at
First National Bank's overnight call rate from 31 July 2002 to the date
payment is made by Nutri Global to the scheme participants, which date shall
be not later than 3 business days after the operative date of the scheme.
4. FINANCIAL EFFECTS
The table below sets out the financial effects of the scheme on a scheme
participant who holds 100 NHH shares, based on the scheme consideration of
25 cents per NHH share:
11 April 22 April Net Asset
2002(1) 2002(2) Value (4) Earnings(3)
100 NHH shares (cents) 1600 2200 670 119
Offer consideration for
100 NHH shares (cents) 2500 2500 2500 175
Percentage change 56,2 13,6 273,1 47,1
Notes:
1.The closing market price per NHH share on 11 April 2002, being the trading
day immediately preceding the publication of the first cautionary
announcement relating to the scheme, compared to the scheme consideration of
25 cents per NHH share.
2.The closing market price per NHH share on 22 April 2002, being the last
practicable day trading day prior to the publication of the detailed
announcement relating to the scheme, compared to the scheme consideration of
25 cents per NHH share.
3.The earnings per NHH share for the year ending 28 February 2002 as
published in the audited results of NHH and based on a weighted average of
189 465 000 NHH shares in issue for the year ended 28 February 2002,
compared to the interest which a scheme participant would have earned had an
amount equivalent to the scheme consideration been invested for a 12 month
period at an after-tax rate of 7% per annum; and
4.The net asset value per NHH share at 28 February 2002 as published in the
audited results of NHH and based on 202 835 000 shares in issue at 28
February 2002, compared to the scheme consideration of 25 cents per NHH
share.
5. CASH CONFIRMATION
The Securities Regulation Panel ("SRP") has been provided with proof of the
availability of funding for Nutri Global to meet the full financial
obligations of the scheme.
6. OPINIONS AND RECOMMENDATIONS
The board of directors of NHH has appointed Fisher Hoffman PKF as
independent advisers to it. Fisher Hoffman PKF are of the opinion that the
offer price of 25 cents per NHH share is fair and reasonable to scheme
participants.
The board of directors (save for MJ Antonie who recused himself),
unanimously recommends that scheme participants vote in favour of the scheme
and intend to vote in favour of the scheme in respect of their own share
holdings.
7. UNDERTAKINGS AND ARRANGEMENTS
Scheme participants holding approximately 68% of the issued share capital of
NHH have irrevocably undertaken to vote in favour of the scheme at the
meeting to be held to vote on the scheme ("the scheme meeting") or, if
applicable, to accept the substitute offer.
Subject to the scheme or the substitute offer, as the case may be, becoming
unconditional, it is the intention that management be incentivised to ensure
continued commitment to NHH on a basis to be agreed upon after the scheme or
the substitute offer, as the case may be, becomes operative.
8. CONDITIONS PRECEDENT
The scheme is subject to the fulfilment inter alia of, the following
conditions precedent:
The disposal of certain assets (inter alia stock and certain fixed assts) of
Campbell & Thiselton SA (Pty) Limited (as defined in the relevant disposal
agreement) becoming unconditional;
The acquisition by the NHH group of the 40 percent of the shares that it
does not hold in NutriHealth International Limited for US$700 000.
The employment contract with Kim Talmage with the NHH group, including a
restraint of trade clause for a period of 12 months from conclusion of the
employment period, being duly signed and completed and becoming
unconditional.
Any necessary shareholders and regulatory approvals being obtained.
The above conditions precedent are to be fulfilled by no later than 31 July
2002.
9. TERMINATION OF NHH'S LISTING ON THE JSE
Application will be made for the termination of NHH's listing on the JSE
with effect from the operative date of the scheme. Full details of the
acceptance and surrender procedure for NHH share certificates and other
documents of title will be contained in the scheme documentation referred to
in paragraph 10 below.
10. FURTHER ANNOUNCEMENTS AND DOCUMENTATION
The scheme documentation is being prepared and will, subject to the approval
of the JSE, SRP and South African Reserve Bank, be posted to NHH
shareholders in due course.
Further announcements, including the salient dates pertaining to the scheme,
will be published from time to time.
Johannesburg
24 April 2002
Corporate adviser and transaction sponsor
The Janus Corporation (Pty) Limited
(Registration Number 1999/005755/07)
Sponsor
Rand Merchant Bank Corporate Finance
(A division of FirstRand Bank Limited)
Corporate law advisers and consultants to NHH
Edward Nathan & Friedland (Pty) Limited
(Registration number 1999/026464/07)
Independent advisors to NHH
Fisher Hoffman PKF (JHB) Inc
Registered accountants and auditors
(Registration number 1994/001166/21)
