| Fri 30 Aug 2002, 0:00 | | Acquisition By Tradegro Limited Of B&j Internation |
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ACQUISITION BY TRADEGRO LIMITED OF B&J INTERNATIONAL LIMITED FROM BROWN &
JACKSON PLC
TRADEHOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1970/009054/06)
Share code: TDH
ISIN code: ZAE000026902
("Tradehold" or "the company")
ACQUISITION BY TRADEGRO LIMITED ("TRADEGRO") OF B&J INTERNATIONAL LIMITED ("B&J
INTERNATIONAL") FROM BROWN & JACKSON plc ("B&J")
1. Introduction
Tradehold shareholders are advised that on 29 August 2002, Tradegro entered into
an agreement with B&J ("the agreement") to acquire the entire issued share
capital of and all shareholders claims against B&J International from B&J for a
consideration of GBP1 ("the transaction").
2. Background information
Tradehold, through its wholly-owned subsidiary, Tradegro, holds 55% of all the
issued shares in B&J. B&J currently owns 100% of the retail chains in the
United Kingdom and Europe trading as Your More Store ("YMS"), The Famous
Brunswick Warehouse ("TFBW"), What Everyone Wants ("WEW"), Poundstretcher and
B&J Poland. Pursuant to the implementation of the agreement, Poundstretcher
will remain as B&J`s sole operating subsidiary and YMS, TFBW, WEW and B&J Poland
("the transferring subsidiaries") will be owned by Tradegro via B&J
International.
3. The transaction
In terms of the agreement, Tradegro will :
- acquire B&J International, a wholly owned subsidiary of B&J. B&J
International will own the transferring subsidiaries as well as various
properties; and
- procure the repayment of loans from B&J and Modern Market Retailing
Limited, a subsidiary of B&J, amounting in aggregate to approximately GBP47,5
million, owing by certain of the transferring subsidiaries.
4. Effective date
The transaction will become effective, on shareholders` approval, after the
general meetings of B&J and Tradehold shareholders to be held at the end of
September 2002.
5. Rationale
The operations of the transferring subsidiaries have recently lost ground
against competitors, experienced difficulty in merchandising and generally under
performed expectations with losses across the board. However, management
consider that the operations conducted by the transferring subsidiaries can be
turned around and restored to profitability in the medium term. Accordingly,
Tradehold will take over certain key executives from B&J, including Mr. Carel
Stassen, to manage the operations of the transferring subsidiaries. B&J, in
which Tradehold has an indirect 55% interest will focus exclusively on the
Poundstretcher operations with the intention of obtaining an improved
performance and market rating. In order to achieve this, B&J has engaged the
services of Mr. Angus Monro, who, as Chief Executive of Matalan plc (a UK retail
chain) made a substantial contribution towards building that business into one
of the most successful discount retailers in the UK. Mr. Monro has been
appointed a director of B&J and will succeed Mr. Carel Stassen as Chief
Executive.
The transaction will result in B&J having a single focussed business while
Tradehold will concentrate on restoring the operations of the transferring
subsidiaries to profitability.
6. Future prospects
Retail trading conditions continue to be competitive and challenging in the UK.
The new management and focus in Poundstretcher should result in this company
increasing its contribution in the medium term. The operations of the
transferring subsidiaries need considerable re-focussing and every effort will
be made to turn these operations around.
7. Condition precedent
The transaction is conditional upon the approval of both Tradehold and B&J
shareholders in general meeting.
8. Related party aspects
In terms of the Listings Requirements of the JSE Securities Exchange South
Africa ("JSE") the transaction is regarded as a related party transaction and
will accordingly be subject to independent shareholders` approval in general
meeting and to Tradehold obtaining an independent opinion that the transaction
is fair and reasonable as far as the Tradehold shareholders are concerned.
9. Financial effects
The following table sets out the pro forma financial effects of the transaction
based on the assumption that the transaction had been effective for the
financial year ended 30 June 2002:
Movement
Before After (cents) (%)
the the
transacti transact
on ion
Headline earnings (60,7) (102,8) (42,1) (69,4)
per share (cents)
Earnings per share (73,1) (115,2) (42,1) (57,6)
(cents)
The transaction would have had no material impact on Tradehold`s net tangible
asset value per share if it had been implemented on 30 June 2002.
10. Circular to shareholders
A circular containing full details of the transaction and convening a general
meeting of shareholders will, subject to the approval of the JSE, be sent to
shareholders within 28 days of this announcement.
Luxemburg
30 August 2002
Sponsor Independent adviser
Barnard Jacobs Mellet Corporate Javelin Capital Limited
Finance
(Pty) Limited
Date: 30/08/2002 01:06:35 PM Produced by the JSE SENS Department
