| Fri 20 Sep 2002, 11:12 | | Connection Group Holdings Limited - Salient Dates |
|
Connection Group Holdings Limited - Salient Dates
Connection Group Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/005390/06)
Share Code: CCT
ISIN: ZAE000016630
("Connection")
Details and salient dates of:
- the odd lot offer;
- amendments to the articles of association;
- the pro-rata share buyback; and
- the consolidation of the share capital
1. THE ODD LOT OFFER
1.1 Introduction
Connection wishes to reduce the substantial and ongoing administration costs
associated with having a large number of small shareholders. Currently, 37.6% of
the total number of shareholders hold less than 1 000 Connection shares each.
These shareholders hold 423 497 Connection shares. Accordingly, the Board of
Directors of Connection has proposed the implementation of an odd lot offer to
facilitate a reduction in the number of small shareholders.
1.2 The odd lot offer price
Subject to the fulfillment of the condition precedent set out in paragraph 1.5
below, the odd lot offer will be implemented at an offer price of 40 cents,
being the weighted average traded price of Connection shares on the JSE
Securities Exchange South Africa ("JSE") over the thirty trading days ending
Thursday 12 September 2002.
1.3 Mechanism of the odd lot offer
All shareholders who hold in aggregate less than 1 000 shares at the close of
business on Friday 25 October 2002 ("odd lot holders"), will be afforded the
opportunity to participate in the odd lot offer. The odd lot offer will be
implemented on the basis that odd lot holders may, up to 16:00 on Friday 25
October 2002, elect to:
- purchase sufficient additional shares at the odd lot offer price to increase
their odd lot holding to 1 000 shares ("the purchase alternative"); or
- sell their odd lot holdings at the odd lot offer price ("the cash
alternative"); or
- retain their odd lot holdings.
Odd lot holders who do not make an election to accept the cash alternative, the
purchase alternative or to retain their odd lot holding, will have their odd lot
holding sold on their behalf without any further action on their part and
without any further notice to them.
1.4 Financial effects
Before After %
(cents)1 (cents)2 change
Earnings per Connection share 0.94 0.94 -
Headline earnings per
Connection share 8.25 8.26 0.1
Net asset value per
Connection share 20.45 20.41 (0.2)
The above calculations ignore the effect of the share buyback and the
consolidation. The calculations are based on 423 497 shares being repurchased in
terms of the odd lot offer which results in 233 950 379 shares in issue after
the odd lot offer. This will be the number of Connection shares in issue before
the share buyback and before the consolidation.
Notes
1. The calculation of earnings per share, headline earnings per share and net
asset value per share in the "Before" column is based on the audited published
results of Connection for the year ended 31 May 2002.
2. The calculation of earnings per share, headline earnings per share and net
asset value per share in the "After" column is based on the audited published
results of Connection for the year ended 31 May 2002 and on the assumption that
the odd lot shares were bought back on 1 June 2001 and that income on cash
balances foregone accrued at an average after tax rate of 7.88% per annum.
1.5 Condition precedent
The odd lot offer is subject to the fulfilment of the condition precedent that
the special and ordinary resolutions relating to the odd lot offer are duly
passed, and that the special resolutions are registered by the Registrar of
Companies.
2. AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The articles will be amended to:
- provide for the holding of dematerialised Connection shares and related
matters in consequence of the introduction of STRATE;
- enable Connection to communicate electronically or by telefacsimile with
shareholders; and
- enable the directors of Connection to conduct meetings by telephone.
3. THE PRO-RATA SHARE BUYBACK
3.1 Introduction
The directors of Connection are of the opinion that in order to create value for
shareholders and to deploy the current cash resources effectively, a pro-rata
share buyback be proposed. This will have the effect of, inter alia:
- enhancing Connection`s headline earnings per share; and
- increasing the return on shareholders` equity.
3.2 The share buyback offer price
Subject to the fulfilment of the condition precedent set out in paragraph 3.5
below, the share buyback will be implemented at an offer price of 40 cents,
being the weighted average traded price of Connection shares on the JSE over the
thirty trading days ending Thursday 12 September 2002.
3.3 Mechanism of the share buyback
Connection proposes that its wholly-owned subsidiary Software Connection
(Proprietary) Limited, acquire from shareholders, pro rata to their existing
shareholdings, 10% of their shareholding in Connection up to an aggregate
maximum of 23 437 388 shares at the share buyback offer price.
The last day to trade in order to participate in the share buyback will be
Friday 25 October 2002.
3.4 Financial effects
Before After %
(cents)1 (cents)2 change
Earnings per Connection share 0.94 0.69 (26.6)
Headline earnings per
Connection share 8.25 8.81 6.8
Net asset value per
Connection share 20.45 18.28 (10.6)
The above calculations ignore the effect of the odd lot offer and the
consolidation and are based on 23 437 388 shares being repurchased at the share
buyback offer price and result in 210 936 488 shares in issue after the share
buyback.
Notes
1. The calculation of earnings per share, headline earnings per share and net
asset value per share in the "Before" column is based on the audited published
results of Connection for the year ended 31 May 2002.
2. The calculation of earnings per share, headline earnings per share and net
asset value per share in the "After" column is based on the audited published
results of Connection for the year ended 31 May 2002 and on the assumption that
the shares were bought back on 1 June 2001 and that income on cash balances
foregone accrued at an average after tax rate of 7.88% per annum.
3.5 Condition precedent
The share buyback is subject to the passing of the requisite resolutions by
shareholders at the general meeting approving the share buyback in accordance
with the requirements of the JSE and the Companies Act, 1973 (Act 61 of 1973),
as amended ("Companies Act").
4. THE CONSOLIDATION
4.1 Introduction
Given the large number of Connection shares in issue and the speculative nature
of trade in "pennystocks", the Board of Directors of Connection has proposed a
consolidation of the share capital of the company on a one for five basis to
reduce the total number of Connection shares in issue and thereby create a more
meaningful share price and reduce speculative trade.
4.2 Mechanism and effects of the consolidation
Subject to the condition precedent in paragraph 4.4 below:
- shareholders whose shareholdings are not whole multiples of 5 will have their
shareholdings after the consolidation rounded to the nearest share. Accordingly,
fractions of shares below 0.5 will be rounded down to the nearest share and
fractions of 0.5 and above will be rounded up to the nearest share. Fractions of
shares will not be issued and paid out to shareholders;
- the consolidation of shares will be effective on Monday 4 November 2002;
- the JSE has agreed, with effect from Monday 4 November 2002, to amend the
listing of Connection`s shares to reflect the consolidation of 500 000 000
existing authorised shares into 100 000 000 consolidated shares.
Theoretically, the consolidation will have the effect of increasing the market
price of Connection shares on the JSE by approximately 5 times. On 12 September
2002, Connection`s closing share price on the JSE was 41 cents per share.
Consequently, Connection`s theoretical closing share price after the
consolidation should be 205 cents per share. Accordingly, Connection`s aggregate
market capitalisation should not change as a consequence of the consolidation.
Shareholders are advised that the record date for purposes of determining those
shareholders whose Connection shares will be subject to the consolidation is
Friday 8 November 2002. The last date to trade in Connection shares on STRATE in
order to be recorded as a shareholder by that date is Friday 1 November 2002.
4.3 Share capital before and after the consolidation
At 12 September 2002, Connection`s share capital was as follows:
R`000
Authorised
500 000 000 ordinary shares of 1 cent each 5 000
Issued
234 373 876 ordinary shares of 1 cent each 2 344
Share premium 29 192
31 536
After the consolidation, the authorised
and issued share capital of Connection
will be as follows:
R`000
Authorised
100 000 000 ordinary shares of 5 cents 5 000
each
Issued
46 874 775 ordinary shares of 5 cents each 2 344
Share premium 29 192
31 536
The effects of the odd lot offer and the share buyback on issued share capital
have not been taken into account in determining the effect of the consolidation
in the table above.
4.4 Condition precedent
The consolidation is subject to the passing of the requisite resolutions by
shareholders in general meeting approving the consolidation in accordance with
the requirements of the JSE and the Companies Act.
5. GENERAL MEETING
A general meeting will be held at 10:30 on Tuesday 15 October 2002, at 6 Mellis
Road, Rivonia, Johannesburg, for the purposes of considering and, if deemed fit,
passing, with or without modification, the special and ordinary resolutions
relating to the odd lot offer, the amendments to the existing articles, the
share buyback and the consolidation.
6. SALIENT DATES
The salient dates in respect of the odd lot offer, the share buyback and the
consolidation of the share capital are as follows:
2002
Offer price finalised Thursday 12 September
Odd lot offer opens at 09:30 on Friday 20 September
Declaration announcement published on Friday 20 September
Forms of proxy for the general meeting to
be received by 10:30 on Friday 11 October
General meeting held at 10:30 on Tuesday 15 October
Finalisation announcement published
on SENS on Tuesday 15 October
Finalisation announcement published
in the press on Wednesday 16 October
Last day to trade in order to participate
in the odd lot offer and the share
buyback on Friday 25 October
Share buyback opens Wednesday 16 October
Share buyback offer closes at 16:00 on Friday 1 November
Forms of election and surrender for the
odd
lot offer and the share buyback to be Friday 1 November
received by 16:00 on (see note 4)
Odd lot offer closes at 16:00 on Friday 1 November
Record date to determine those
shareholders
entitled to participate in the odd lot
offer and the share buyback at the close
of
business on Friday 1 November
Last day to trade in the unconsolidated
Connection shares Friday 1 November
Implementation of the odd lot offer takes
effect after close of business on Friday 1 November
Dematerialised shareholders will have
their
safe custody accounts held at their CSDP
or
broker updated with their new holding and
debited/credited with the cash amount, as
the case may be, in respect of the odd
lot
offer and share buyback, on Monday 4 November
Cheques in respect of the share buyback
as
well as the sale by certificated odd lot
holders of odd lot holdings posted on or
about Monday 4 November
Listing and trading in the consolidated
Connection shares commences on Monday 4 November
Record date to determine those
shareholders
entitled to participate in the
consolidation, at the close of business Friday 8 November
on
In respect of certificated shareholders,
new consolidated and balance Connection
share certificates will be posted against
surrender of existing documents of title,
from Monday 11 November
Dematerialised shareholders will have
their
safe custody accounts held at their CSDP
or
broker updated in respect of the
consolidated Connection
shares on Monday 11 November
Notes:
1. The above dates and times are subject to change. Any changes will be
published in the South African press and on SENS.
2. All times in this circular are South African local times.
3. Shareholdings in the unconsolidated shares may not be dematerialised or
rematerialised after Friday 25 October 2002. Share certificates in the
consolidated number of shares will only be able to be
dematerialised/rematerialised from Monday 11 November 2002. Share certificates
reflecting the unconsolidated number of shares will be required to be
surrendered prior to dematerialisation.
4. Dematerialised shareholders are required to inform their duly appointed CSDP
or broker of their acceptance of the offer in the manner and time stipulated in
the agreement governing the relationship between the shareholder and his/her
CSDP or broker.
7. DOCUMENTATION
A circular setting out the details of the odd lot offer, the share buyback, the
consolidation and containing a notice of the general meeting of shareholders
will be posted to shareholders today.
6 Mellis Road
Rivonia
20 September 2002
Merchant Bank and Sponsor
RAND MERCHANT BANK
A division of FirstRand Bank Limited
CORPORATE FINANCE
Legal Advisor
Paul Botha Inc.
Reporting Accountants
Deloitte & Touche Chartered Accountants (SA)
Registered accountants and auditors
Date: 20/09/2002 07:00:02 AM Produced by the JSE SENS Department
