Masonite - Scheme of Arrangement
MASONITE (AFRICA) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1942/015502/06)
JSE Share code: MAS ISIN: ZAE000004289
("Masonite")
Scheme of Arrangement
Masonite Africa Limited ("MAL") regrets to announce that the scheme of
arrangement proposed between MAL and its shareholders ("the scheme") was not
agreed to by minority shareholders at the scheme meeting held on Monday, October
28, 2002. The scheme offered the minority shareholders 1 200 cents for every
MAL share held and would have resulted in MAL becoming a wholly owned subsidiary
of its parent company, Masonite International Corporation ("MIC"), and being
delisted. In the end, it came down to a decision by Old Mutual Asset Managers
(SA) (Pty) Limited ("OMAM"), one of the three significant minority shareholders
not to support the scheme. The other two significant minorities both supported
the scheme, which required a 75 percent "yes" vote to succeed.
MAL management, MIC and their advisors have tried unsuccessfully over the
past weeks to convince OMAM that the scheme was a fair deal for minority
shareholders and very positive for the company, its employees and the KZN
Midlands region. Unfortunately, discussions broke down over the value of MAL`s
forestry assets. MIC and MAL are of the opinion that OMAM`s value expectation
with respect to these assets is unrealistic, and that the value of the forests
has been thoroughly considered in arriving at the offer price.
MAL`s business model is a vertically integrated one, with the total forestry
tonnages being dedicated to the mill at Estcourt. OMAM`s insistence that these
assets should be valued as separate entities would negate the integrated nature
of the business and prejudice the viability of the mill. This could leave the
town of Estcourt grappling with the same issues that have plagued neighbouring
Mooi River since the closure of Mooi River Textiles.
Fortunately, the failure of the scheme will not jeopardise MAL`s ongoing
operations and MIC, as the major shareholder, remains committed to the continued
success of MAL.
For the Board of Directors
MJ Slater Managing Director
D Cooper Financial Director
October 28, 2002
Date: 28/10/2002 05:47:42 PM Produced by the JSE SENS Department
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