| Wed 18 Sep 2002, 12:07 | | Investment Solutions Holdings Limited - Announceme |
|
Investment Solutions Holdings Limited - Announcement regarding an offer by
Alexander Forbes Limited ("Alexander Forbes") to acquire the entire issued share
capital of Solutions
Investment Solutions Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/022540/06)
Sharecode: SLU ISIN: ZAE 000019279
("Solutions")
Announcement regarding an offer by Alexander Forbes Limited ("Alexander Forbes")
to acquire the entire issued share capital of Solutions
1. INTRODUCTION
Further to the cautionary announcements dated 26 July 2002 and 6 September
2002, Investec Bank Limited is authorised to announce that Alexander Forbes
will, subject to the fulfilment of the conditions precedent set out in 7 below
("the conditions precedent"), propose a scheme of arrangement ("the scheme") in
terms of section 311 of the Companies Act, 1973 (Act 61 of 1973), as amended
("the Act"), between Solutions and its shareholders other than Alexander Forbes
("the Solutions scheme participants"), for the acquisition of all their
Solutions shares. Further details of the scheme and an alternative offer to the
scheme are set out below.
2. THE SCHEME CONSIDERATION
The consideration payable to Solutions scheme participants, registered as
such on the record date for the scheme, will be as follows:
- an amount of R6,10 in cash per Solutions share ("the cash alternative"); or
- 0,40667 of an Alexander Forbes share per Solutions share ("the share
alternative").
The Solutions scheme participants will be able to elect either the cash
alternative or the share alternative or a combination thereof.
The total amount payable in terms of the cash alternative and the share
alternative is hereinafter collectively referred to as "the scheme
consideration".
The receipt by a Solutions scheme participant of the share alternative will only
occur if such scheme participant elects the share alternative in the form of
election, full details of which will be given in the documentation referred to
in 9 below.
3. EMPLOYEE SHARE INCENTIVE ARRANGEMENTS
In terms of the scheme, the interests of Solutions` employees in the
Investment Solutions Share Trust ("the Solutions Share Trust") will, it is
anticipated, be dealt with substantially as follows:
3.1 all Solutions shares and options subject to the Solutions Share Trust which
vest on or before 30 April 2003 will be deemed to have vested for purposes of
the scheme and may accordingly be disposed of under the scheme;
3.2 participants in the Solutions Share Trust will be obliged to transfer at
least 50% of their unvested Solutions shares and options into Alexander Forbes
shares and options with loan positions and effective strike prices being
maintained. Participants may elect that more than 50% of their unvested
Solutions shares and options become subject to this arrangement. To facilitate
this, Alexander Forbes shareholders will be required to approve that the
resultant Alexander Forbes shares and options will exceed the limits for the
existing Alexander Forbes Share Schemes. The net value of the balance of the
unvested Solutions shares and options will be settled in cash which will be
released to participants on the original vesting terms under the Solutions Share
Trust.
4. PRO FORMA FINANCIAL EFFECTS OF THE SCHEME ON SOLUTIONS SCHEME PARTICIPANTS
The table below sets out the pro forma financial effects of the scheme on a
Solutions scheme participant, based on the cash alternative and the share
alternative:
The cash The share
alternative alternative
(Note 1) (Note 2)
Before After After
the the the
scheme scheme % scheme %
Per Solutions share Note (cents) (cents) change (cents) change
Market value -
25 July 2002 3 480,0 610,0 27,1 610,0 27,1
Market value -
16 September 2002 4 480,0 610,0 27,1 553,1 15,2
Earnings 5 41,8 42,7 2,2 61,9 48,0
Headline earnings 5 41,8 42,7 2,2 70,6 68,9
Net asset value 6 96,2 610,0 534,1 156,6 62,8
The pro forma financial effects have been prepared for illustrative purposes
only, to provide information on how the scheme might have affected the financial
information presented and, because of its nature, may not give a true reflection
of the financial position to Solutions scheme participants. The pro forma
financial effects have been based on the following:
Notes:
1. The cash alternative assumes that a Solutions scheme participant elects the
cash alternative.
2. The share alternative assumes that a Solutions scheme participant elects
the share alternative.
3. The closing market price per Solutions share on 25 July 2002, being the
trading day immediately preceding the publication of the first cautionary
announcement relating to the scheme, compared to R6,10 per Solutions share in
terms of the cash alternative and the closing market price on the same date of
0,40667 of an Alexander Forbes share per Solutions share in terms of the share
alternative.
4. The closing market price per Solutions share on 16 September 2002, being
the last practicable trading day prior to the publication of the detailed
announcement relating to the scheme, compared to R6,10 per Solutions share in
terms of the cash alternative and the closing market price on the same date of
0,40667 of an Alexander Forbes share per Solution share in terms of the share
alternative.
5. The earnings and headline earnings per Solutions share for the year ended
31 March 2002 as published in the audited results of Solutions and based on a
weighted average of 286 943 797 Solutions shares in issue for the year ended 31
March 2002, compared to the interest which a Solutions scheme participant would
have earned had an amount equivalent to the cash alternative been invested for a
12-month period at an after tax interest rate of 7% per annum in terms of the
cash alternative and a Solutions scheme participant`s pro rata entitlement to
the pro forma earnings and headline earnings per Alexander Forbes share for the
same period in terms of the share alternative (on the assumption that the
earnings and headline earnings of Alexander Forbes had included 100% of the
earnings and headline earnings of Solutions for the year ended 31 March 2002).
6. The net asset value per Solutions share at 31 March 2002 as published in
the audited results of Solutions and based on 288 668 659 Solutions shares in
issue at 31 March 2002, compared to R6,10 per Solutions share in terms of the
cash alternative and a Solutions scheme participant`s pro rata entitlement to
the pro forma net asset value per Alexander Forbes share at the same date in
terms of the share alternative (on the assumption that the net asset value of
Alexander Forbes had included the scheme consideration at 31 March 2002).
5. THE SUBSTITUTE OFFER
Provided Alexander Forbes shareholders have given the requisite approval for
the substitute offer in terms of 7.2 below, if any of the other conditions
precedent to the scheme are not fulfilled, Alexander Forbes intends to extend a
substitute offer to Solutions shareholders in terms of which Solutions
shareholders will be entitled to accept a substitute offer in respect of their
Solutions shares for the same consideration as the consideration payable to
Solutions scheme participants in terms of the scheme ("the substitute offer").
Should the substitute offer be accepted in respect of 90% or more of the
Solutions shares held by Solutions shareholders other than Alexander Forbes,
Alexander Forbes will elect to invoke the provisions of section 440K of the Act
and the listing of Solutions on the JSE Securities Exchange South Africa ("the
JSE") will terminate once the relevant period as envisaged by section 440K of
the Act has lapsed.
6. OPINIONS AND RECOMMENDATIONS
The board of directors of Solutions ("the Solutions board") has appointed a
sub-committee consisting of directors who are not directors of Alexander Forbes
to consider the scheme ("the sub-committee"). The sub-committee will appoint
advisors to provide an independent opinion on whether the terms of the scheme
are fair and reasonable to Solutions scheme participants. The substance of such
advice and the recommendations of the Solutions board will be advised to
Solutions shareholders in due course.
7. THE CONDITIONS PRECEDENT
The implementation of the scheme is subject to the fulfilment of, inter alia,
the following conditions precedent:
7.1 the approvals, insofar as may be necessary, of the appropriate documentation
by the JSE, the Securities Regulation Panel ("SRP") and any other approvals that
may be required;
7.2 the approval of the proposing of the scheme, as well as amending the
Alexander Forbes Share Schemes, and the making of the substitute offer, by the
requisite majority of the Alexander Forbes shareholders present or represented
and voting at the Alexander Forbes general meeting to be convened for this
purpose and who are entitled to vote thereat;
7.3 the convening by the High Court of South Africa of the requisite meeting of
Solutions shareholders in terms of the Act;
7.4 the approval of the requisite majority of those Solutions shareholders
entitled to vote on the scheme, present or represented and voting at the scheme
meeting to be convened in terms of the Act;
7.5 the sanctioning of the scheme by the High Court of South Africa; and
7.6 registration of the Order of Court sanctioning the scheme by the Registrar
of Companies.
The above conditions precedent are to be fulfilled by no later than 31 January
2003.
8. TERMINATION OF SOLUTIONS` LISTING ON THE JSE
Application will be made for the termination of Solutions` listing on the JSE
with effect from the date on which the scheme becomes operative. Full details of
the election, acceptance and surrender procedure for Solutions share
certificates and other documents of title will be contained in the scheme
documentation referred to in 9 below.
9. FURTHER ANNOUNCEMENTS AND DOCUMENTATION
Solutions shareholders are referred to the announcement by Alexander Forbes
appearing elsewhere in the press today.
The scheme documentation is in the course of preparation and will, subject to
the approval of the JSE, SRP and South African Reserve Bank and the Order of
Court for the convening of the scheme meeting being granted, be posted to
Solutions shareholders.
Further announcements, including the salient dates pertaining to the scheme,
will be published in due course.
10. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Solutions shareholders are referred to the further cautionary announcement
dated 6 September 2002. Such announcement related to the matters dealt with
herein and Solutions shareholders are advised that the cautionary announcement
is withdrawn.
Sandton
18 September 2002
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Corporate law advisors and consultants
Edward Nathan & Friedland (Pty) Ltd
Corporate Law advisers & Consultants
(Registration number 1999/026464/07)
Sponsor
Investec Securities Limited
Member of the JSE
(Registration number. 1972/008905/06)
Date: 18/09/2002 08:03:00 AM Produced by the JSE SENS Department
