| Tue 28 May 2002, 0:00 | | Further Announcement to acquire BoE and Further Ca |
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Nedcor Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/010630/06)
JSE Share code: NED ISIN: ZAE000004875
("Nedcor")
Nedcor Investment Bank Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1963/003972/06)
JSE Share code: NIB ISIN: ZAE000019030
("NIB")
BoE Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/003281/06)
JSE Share code: BOE ISIN: ZAE000014890
("BoE")
Further Announcement regarding the Recommended Offer by Nedcor to acquire
BoE and Further Cautionary Announcement
1. INTRODUCTION
Shareholders of BoE, Nedcor and NIB (collectively "Shareholders") are
referred to the announcements dated 22 April, 29 April and 13 May 2002
regarding the recommended offer by Nedcor ("the Offer") to acquire the
entire issued share capital of BoE (the "Transaction") for a consideration
per 100 BoE shares of R290 in cash and 0,48544 Nedcor shares. It is proposed
that the Offer, unless withdrawn in the event of BoE permitting any
competing offeror to conduct a more extensive due diligence than that
conducted by Nedcor, will be implemented by way of a scheme of arrangement
("the Scheme") to be proposed by Nedcor between BoE and its shareholders in
terms of section 311 of the Companies Act 1973, (Act 61 of 1973), (as
amended) ("the Act"). Including the net consideration payable to convertible
debenture holders (referred to below) and BoE option holders, and assuming
the closing price per Nedcor share of R129,00 on Friday, 19 April 2002, the
aggregate Transaction consideration amounts to R7 619 million.
2. CONDITIONS PRECEDENT TO THE TRANSACTION
In terms of section 37 of the Banks Act, 94 of 1990 (as amended) ("the
Banks Act"), the Minister of Finance has, through the Registrar of Banks
granted Nedcor permission to proceed with the Transaction. In addition, the
Minister of Finance has issued a certificate in terms of the provisions of
section 18 of the Competition Act, 89 of 1998 (as amended), confirming that
the Transaction is subject only to the jurisdiction of the Banks Act.
The implementation of the Scheme remains conditional upon:
the approval of the JSE Securities Exchange South Africa ("the JSE")
and the Securities Regulation Panel ("the SRP") and the listing of the
Nedcor consideration shares; and
the High Court ("the Court") convening a meeting of Scheme members to
consider the Scheme, the approval of the Scheme by a majority representing
not less than 75% of the votes exercisable by Scheme members present and
voting, either in person or by proxy at the Scheme meeting, the Court
sanctioning the Scheme and a certified copy of the Order of Court
sanctioning the Scheme being registered by the Registrar of Companies.
3. FINANCIAL EFFECTS OF THE SCHEME
The pro forma financial effects have been prepared for illustrative
purposes only, to provide information about how the proposed acquisition
might have affected the financial information presented and, because of
their nature, may not give a true reflection of either Nedcor or BoE`s
financial position.
3.1 The table below sets out the pro forma effects of the Transaction on
Nedcor`s headline earnings, net asset value and tangible net asset value:
After
Before (pro forma Percentage
(cents per share) cents per share) change
Headline earnings 1 576(1) 1 743(2) 10,6
Net asset value 6 136(3) 6 414(4) 4,5
Tangible net asset value 5 610(5) 4 883(6) (13,0)
Notes:
1. Audited headline earnings per Nedcor share for the year ended 31
December 2001, based on the weighted average of 240,7 million Nedcor shares
in issue throughout the year ended 31 December 2001.
2. The aggregate of Nedcor`s audited headline earnings for the year ended
31 December 2001, BoE`s audited headline earnings for the year ended 30
September 2001 and the assumed cost of funding the Transaction, based on the
weighted average of 251,1 million Nedcor shares in issue post the
Transaction.
3. The audited net asset value per Nedcor share at 31 December 2001,
based on 242,0 million Nedcor shares in issue (excluding treasury shares) at
31 December 2001.
4. The aggregate of the audited net asset value of Nedcor at 31 December
2001 and the value of the Nedcor shares to be issued, based on 252,3 million
Nedcor shares in issue post the Transaction.
5. The audited net asset value per Nedcor share at 31 December 2001 less
goodwill, calculated on the basis of 242,0 million Nedcor shares in issue
(excluding treasury shares) at 31 December 2001.
6. The aggregate of the audited net asset value of Nedcor at 31 December
2001 and the value of the Nedcor shares issued, less the aggregate goodwill
amounts within Nedcor and BoE and the goodwill arising as a consequence of
the Transaction, based on 252,3 million Nedcor shares (excluding treasury
shares) in issue post the transaction.
7. No fair value adjustment to the carrying value of assets and
liabilities has been made in the calculation of these financial effects.
3.2 The table below sets out the pro forma effects of the Transaction on
the market value, earnings, headline earnings and net asset value per share
to a BoE shareholder:
Increase/(Decrease)
attributable to
shareholders
Transaction Transaction if the
not implemented implemented Transaction is
(cents (cents implemented
per share) per share) (%)
Market value
30-day volume weighted
average traded price
per BoE share to
19 April 2002 282,0(1) 352,6 25,0
Closing market price
per BoE share on
19 April 2002 311,0(2) 352,6 13,4
Net asset value per
BoE share 285,0(3) 319,8 12,2
Earnings per share -
six months ended
31 March 2002 8,5(3) 13,5(5) 58,8
Earnings per share -
12 months ended
30 September 2001 12,4(4) 20,7(5) 66,9
Headline earnings
per share - six months
ended 31 March 2002 25,2(3) 14,0(5) (44,4)
Headline earnings
per share - 12 months
ended 30 September 2001 52,1(4) 28,4(5) (45,5)
Notes:
1. Based on the volume weighted average price of BoE shares over the last
30 trading days prior to 19 April 2002, being the last trading day prior to
the announcement published on SENS on Monday, 22 April 2002.
2. Based on the closing price of BoE shares on 19 April 2002, the last
trading day prior to the announcement published on SENS on Monday, 22 April
2002.
3. From the BoE Group published unaudited interim results for the six
months ended 31 March 2002.
4. From the BoE Group published audited results for the year ended 30
September 2001.
5. Based on the assumption that the Transaction is implemented, it has
been assumed that the Scheme participant will retain the cash proceeds and
Nedcor consideration shares. Interest earned has been calculated on the cash
proceeds of 290 cents at 10,2% per annum for the 12-month figures and at
9,2% for the six-month figures, based on average one month NCD rates
applicable at the beginning of each month, over the relevant period.
Earnings on the Nedcor shares have been calculated based on the full year
earnings of Nedcor for the year ended 31 December 2001, and on the earnings
of Nedcor for the six months ended 31 December 2001. A corporate taxation
rate of 30% has been applied to the interest income earned.
6. Fractions of Nedcor Consideration Shares resulting from the
implementation of the Transaction will be rounded down to the nearest whole
number if they are less than 0,5 and will be rounded up to the nearest whole
number if they are equal to or greater than 0,5. This was not taken into
account in the calculation of the financial effects as the effect thereof is
insignificant.
7. The effect of Capital Gains Tax, if any, has not been taken into
account when calculating the financial effects of the Transaction on a BoE
shareholder, resulting from all the combinations available.
4. BoE CONVERTIBLE DEBENTURES
Nedcor also intends proposing a scheme of arrangement between BoE and BoE
convertible debenture holders in terms of the Act ("the Convertible
Debenture Scheme"). The convertible debentures are not listed and are held
by current and former employees of BoE.
5. OPINIONS AND RECOMMENDATIONS RELATING TO THE SCHEME
The board of directors of BoE unanimously recommends the Transaction to
BoE shareholders. BoE directors, who are shareholders of BoE, intend to vote
in favour of the Scheme.
The BoE board of directors has appointed Goldman Sachs International and UBS
Warburg as independent advisers with respect to the Transaction. The views
of the independent advisers will be set out in the circulars to be sent to
BoE Scheme members and convertible debenture holders.
6. CONFIRMATION OF FINANCIAL RESOURCES
In terms of the requirements of the SRP, the SRP has been given
appropriate confirmation that Nedcor has the necessary resources available
to implement the Transaction.
7. SEPARATE CIRCULARS TO SHAREHOLDERS OF NEDCOR AND BoE
The BoE Scheme circular and the Convertible Debenture Scheme circular,
which are subject to the prior approval of the JSE and SRP, providing
information on the Scheme and the Convertible Debenture Scheme and
containing, inter alia, notices of the Scheme meeting and Convertible
Debenture Scheme meeting, will be mailed to shareholders of BoE and
convertible debenture holders once the Court Orders for the convening of the
scheme meetings ("Court Orders") are granted.
A circular to shareholders of Nedcor providing information on the
Transaction, and which is subject to the prior approval of the JSE, will be
mailed to Nedcor shareholders once the Court Orders are granted.
8. MINORITY SHAREHOLDERS` INTERESTS IN NIB
On 22 April 2002 it was announced that Nedcor had informed the board of
directors of NIB that it was considering the possibility of proposing a
transaction in terms of which Nedcor would acquire the issued share capital
of NIB not already held by it. Shareholders of NIB and Nedcor are advised
to continue to exercise caution when dealing in their shares until a further
announcement is made.
Johannesburg
Cape Town
28 May 2002
Investment bank to Nedcor and NIB
Nedcor Investment Bank
Sponsor to Nedcor and NIB
Nedcor Investment Bank
Corporate law advisers and consultants to Nedcor and NIB
Edward Nathan & Friedland (Pty) Ltd
Corporate Law advisers & consultants
(Registration number 1999/026464/07)
Joint financial advisers to BoE
UBS Warburg Corporate Finance (South Africa) (Pty) Ltd
A financial services group of UBS AG
(Registration number 1994/008363/07)
Goldman Sachs
UBS Warburg and Goldman Sachs International are acting for BoE Limited and
no-one else in connection with this matter and will not be responsible to
any other person for providing the protections afforded to clients of UBS
Warburg and Goldman Sachs International for providing advice in relation to
this matter
Lead sponsor to BoE
UBS Warburg Securities (South Africa) (Pty) Ltd
A financial services group of UBS AG
(Member of the JSE Securities Exchange South Africa)
(Registration number 1995/011140/07)
Co-sponsor to BoE
BoE Securities (Pty) Ltd
Member of the JSE Securities Exchange South Africa
Co. Reg. No. 1995/012240/07
Lead sponsor to Nedcor and NIB
Merrill Lynch
Global Markets & Investment Banking Group
Merrill Lynch South Africa (Pty) Ltd
Registration number 1995/001805/07
Registered Sponsor and Member of the
JSE Securities Exchange South Africa
Merchant bank to BoE
BOE Merchant Bank
A Division of BOE Bank Limited
Co. Reg. No. 1951/000847/06
Legal advisers to BoE
Sonneberg Hoffmann & Galombik
Date: 28/05/2002 07:00:02 AM Produced by the SENS Department
