| Wed 27 Nov 2002, 14:55 | | Appleton Limited - Cautionary Announcement |
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Appleton Limited - Cautionary Announcement
Appleton Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/004031/06)
Share code: ALE ISIN: ZAE000027488
("Appleton")
CAUTIONARY ANNOUNCEMENT
1. Corpcapital Corporate Finance is authorised to announce that the Appleton
board has received a written offer (the "PSG offer") from PSG Investment
Services (Pty) Limited ("PSG") to propose a scheme of arrangement in terms of
section 311 of the Companies Act, 1973 (Act 61 of 1973, as amended) between
Appleton and its shareholders (other than PSG Investment Bank Holdings Limited
and/or any of its subsidiaries (the "PSG group")) ("the scheme").
2. The PSG offer contemplates a scheme consideration of 8 cents per Appleton
share (excluding Appleton`s treasury shares and the PSG group`s shareholding in
Appleton) amounting to an aggregate scheme consideration of R60 248 483,76. Such
scheme consideration is to be payable within seven days of the operative date of
the scheme (i.e. the date that the suspensive conditions to the scheme are
fulfilled).
3. The PSG offer received is subject to the following suspensive conditions,
namely:
3.1 receipt of the requisite regulatory approvals, including, to the extent
necessary, approval of the JSE Securities Exchange South Africa, Securities
Regulation Panel, Financial Services Board, the Competition Authorities and the
South African Reserve Bank, by no later than 31 March 2003;
3.2 the sanctioning of the scheme by the High Court of South Africa by no later
than 4 March 2003;
3.3 that PSG concludes satisfactory arrangements with Wayne Rosenberg and Bruce
Sneddon for their ongoing employment in relation to the Appleton businesses for
a period of up to 12 months from the effective date of the scheme (1 December
2002) on normal terms and conditions given their positions, by no later than 6
December 2002;
3.4 that PSG concludes satisfactory non-client solicitation restraint
arrangements with Wayne Rosenberg, Bruce Sneddon and Stanley Shane which will
endure for a period of 12 months commencing on the date of termination of their
service/consultancy agreements in relation to the Appleton businesses, by no
later than 6 December 2002;
3.5 that PSG receives, by no later than 6 December 2002, irrevocable letters of
undertaking from Appleton shareholders holding at least 75% of the issued share
capital of Appleton (excluding the shares held by the PSG group) to support and
vote in favour of the scheme on the basis that such undertakings shall be
irrevocable unless there is a competitive offer at a higher price and PSG,
within seven days of becoming aware of the competitive offer, elects not to
match or better the higher offer;
3.6 that PSG obtains the necessary guarantee for the total scheme consideration
in the sum of R60 248 483,76, by no later than 9 December 2002;
3.7 that all the parties to the existing Appleton voting pool agreement waive
their pre-emptive rights (in respect of the transfer of any Appleton shares held
by any member of the PSG group) to PSG, by no later than 6 December 2002;
3.8 that Appleton disposes of its Dublin operations for a minimum consideration
of US$4 million by no later than 9 December 2002, of which US$1.2 million will
be paid upfront, upon terms and conditions approved in writing by PSG, which
approval PSG shall not be entitled to withhold or delay unreasonably,
or by such later date as may agreed to between PSG and Appleton in writing.
4. The PSG offer contemplates that if the net cash or near cash position of
Appleton in South Africa (excluding any consideration received in respect of the
disposal of Appleton`s Dublin operations) be less than R45 million at 1 December
2002, the aggregate scheme consideration be reduced by the full amount of such
shortfall.
5. The PSG offer contemplates the payment by Appleton to PSG of a break fee in
the sum of R1 million (exclusive of VAT) in the event of the Appleton board
accepting the PSG offer but thereafter Appleton receiving a competitive bid for
Appleton`s equity and/or Appleton`s businesses and the Appleton board
recommending the acceptance of such competitive offer.
6. The PSG offer is open for acceptance by the Appleton board until 16:00 on 29
November 2002. The board is considering the PSG offer and will notify Appleton
shareholders of its decision in due course.
7. The Appleton board has not received confirmation from either PSG or its
financial advisor or from another appropriate third party that resources are
available to PSG sufficient to satisfy full acceptance of the PSG offer. The
furnishing of a guarantee by PSG to satisfy the consideration payable on the
implementation of this scheme has been made a condition precedent to the PSG
offer.
8. To the best of the Appleton board`s knowledge the PSG group:
8.1 owns or has control over 335 797 839 Appleton shares;
8.2 is not acting in concert with any other third party/ies in respect of the
PSG offer;
8.3 does not hold an option to purchase any Appleton shares.
9. The Appleton board has appointed Corpcapital Corporate Finance and Ernst &
Young Corporate Finance (Proprietary) Limited as external advisors to the board.
The board is taking advice on the terms of the PSG offer as to how it affects
all holders of Appleton securities, including specifically, minority holders of
Appleton securities. The substance of such advice shall be made known to holders
of Appleton shares in due course.
10. Shareholders are advised to exercise caution when dealing in Appleton shares
until a further announcement is made.
28 November 2002
Lead corporate advisor and transaction sponsor
Corpcapital Corporate Finance
a sponsor registered with the
JSE Securities Exchange South Africa
Independent advisor to minorities
Ernst & Young Corporate Finance (Pty) Ltd
(Registration number 2000/031575/07)
Attorneys
Sonneberg Hoffmann & Galombik Inc.
Date: 27/11/2002 02:45:00 PM Produced by the JSE SENS Department
