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Scheme of arrangement - Masonite (Africa) Limited ("Masonite")
Terms announcement
regarding
A scheme of arrangement in terms of section 311 of the Companies Act, 1973 (Act
61 of 1973) as amended, proposed by Masonite International Corporation ("MIC"),
Masonite and Masonite Subco between Masonite and its shareholders other than MIC
Masonite MIC
Masonite (Africa) Limited Masonite International
(Incorporated in the Republic Corporation
of South Africa) Incorporated in Ontario,
(Registration number Canada
1942/015502/06)
Share code MAS
ISIN code ZAE000004289
Offer by Masonite International Corporation ("MIC") to acquire minority
shareholders` interests in Masonite (Africa) Limited ("Masonite")
1. Introduction
MIC has offered (the "offer") to acquire the entire issued share capital of
Masonite (the "transaction") subject to the fulfilment of the conditions
precedent set out in paragraph 6 below.
2. Terms of the transaction
It is proposed that the transaction will be implemented by way of a scheme of
arrangement (the "scheme") in terms of section 311 of the Companies Act (No. 61
of 1973), as amended (the "Act"), to be proposed by MIC, Masonite and a Masonite
subsidiary ("proposers") between Masonite and its shareholders other than MIC
("scheme members").
The implementation of the transaction will result in Masonite shareholders
receiving 1 200 cents (the "cash consideration") in cash for each ordinary share
held in the share capital of Masonite ("shares").
Should the scheme be implemented, Masonite will become a wholly owned subsidiary
of MIC, and application will be made to the JSE Securities Exchange South Africa
(the "JSE") for the termination of the listing of Masonite.
3. Rationale for the transaction
The relatively low market capitalisation of Masonite has a number of significant
drawbacks, including:
* lack of institutional investor interest and analyst coverage;
* an inability to raise equity at fair value and, accordingly, to fund
expansion; and
* management time and expense being spent on listing related matters that are
out of proportion with the benefits of the listing.
Furthermore, Masonite is currently faced with certain market conditions that
significantly impact its ability to produce adequate returns for its
shareholders as a stand-alone listed company with minority shareholders. These
factors include:
* many of Masonite`s products have reached the mature stage of their product
life cycle; and
Masonite is increasingly relying on export sales for growth in real terms, a
strategy which necessitates a strong global network.
Financial effects
The pro forma financial effects have been prepared for illustrative purposes
only and, because of their nature, they may not give a true reflection of
Masonite`s financial position or results of operations.
The table below sets out the pro forma financial effects on a Masonite
shareholder of accepting the offer:
Date: 23/08/2002 04:15:00 PM Produced by the JSE SENS Department
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