| Wed 18 Dec 2002, 17:45 | | Proposal to acquire certain "b" ordinary shares in |
|
Proposal to acquire certain "b" ordinary shares in the issued share capital of
Wiphold
Women Investment Portfolio Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/001291/06)
Share code: WPH ISIN: ZAE000017752
("WIPHOLD" or "the Company")
Proposal to acquire certain "b" ordinary shares in the issued share capital of
WIPHOLD
1. Introduction
Shareholders are referred to the cautionary announcement published on SENS on 30
September 2002 and its renewal published on 11 November 2002. Shareholders are
advised that following the conclusion of an agreement between the Company and a
consortium comprising The Wiphold Investment Trust ("Wip Trust"), Gloria Tomatoe
Serobe ("Serobe"), Louisa Madiako Mojela ("Mojela") and Old Mutual (South
Africa) Limited ("Old Mutual") (collectively "the Proposer"), the Proposer will
propose a scheme of arrangement ("the Scheme") in terms of section 311 of the
Companies Act (No 61 of 1973) ("the Act") as amended, between the Company and
all its holders of "B" ordinary shares in the issued capital of the Company
(other than the Proposer, the Company`s share incentive scheme trust, the wholly
owned subsidiary of the Company that holds treasury shares in the Company, and a
subsidiary of Old Mutual (collectively, the "Excluded Shareholders")) ("the
Scheme Participants").
Implementation of the Scheme will result in the Scheme Participants receiving a
cash amount of 200 cents per WIPHOLD "B" share and the delisting of WIPHOLD.
After the implementation of the Scheme, the shareholding of the Proposer in the
Company will be restructured and certain other persons and entities (including
certain executives of the Company and its subsidiaries, still to be determined
by the Proposer) who agree to subscribe for shares in the Company will become
shareholders of the Company.
2. Rationale
WIPHOLD has, together with other investment banking houses of a similar size in
South Africa, been faced with a number of difficulties, including:
- general poor market sentiment towards small-cap companies;
- limited liquidity in the tradebility of its shares;
- a share price that trades at a discount to underlying net asset value;
- shareholder pressure to return capital;
- keen competition for deal flow in a tough market; and
- insufficient direct economic interest held in the company by black empowerment
persons and entities.
WIPHOLD in its last published annual report, stated the need for a strategic
partnership with a strong institutional shareholder. It is believed that the
introduction of such a shareholder will assist WIPHOLD both from a financial
perspective - as the Company will have access to working capital and investment
facilities to be provided by Old Mutual, and from an operational perspective -
as the Company will have access to overlapping skills and deal - flow
opportunities.
WIPHOLD also believes that it is essential to significantly improve the
Company`s black empowerment ownership at shareholder level. This will strengthen
the position of the Company for its future business activities in a tough market
and will be in line with its founding vision.
The board of directors of the Company ("the Board") constituted an independent
committee to evaluate the proposed transaction. Serobe, Mojela and other members
of the Board who may have an interest in Wiphold following implementation of the
proposed transaction have not participated in the evaluation thereof. This
committee is of the view that the proposed transaction will enable the Proposer
to restructure the shareholding in WIPHOLD to achieve WIPHOLD`s strategic
objectives, namely the introduction of a strategic institutional shareholder to
enhance its access to new business opportunities and the simultaneous
strengthening of WIPHOLD`s black empowerment ownership at a shareholder level.
It is envisaged that, following implementation of the proposed transaction and
the subsequent restructuring of the Company`s share capital, at least 50% of
Wiphold will be economically owned by blacks and women. The proposed transaction
will also give the Scheme Participants liquidity and an opportunity to unlock
value in respect of their WIPHOLD shareholdings. The committee supports the
proposed transaction.
The Board will appoint an independent advisor to provide a "fair and reasonable"
report on the proposed transaction and this report together with the views of
the independent committee in this regard will be included in the relevant
circular that will be mailed to Scheme Participants.
3. Details of the proposal
The Proposer intends to propose that the Company acquire all the "B" ordinary
shares in the issued capital of the Company other than those already held by the
Excluded Shareholders, such that thereafter all the ordinary "A", "B" and "C"
issued shares in the capital of the Company shall be held by the Proposer.
Thereafter, after the restructuring, the shares in the Company will be held by
the Proposer and other persons and entities who agree to subscribe for shares in
the Company. It is intended that these other persons will include a number of
the executives of the Company and its subsidiaries still to be determined by the
Proposer. The proposal is to be implemented by way of the Scheme coupled with a
share repurchase in terms of section 85 of the Act.
Subject to the implementation of the Scheme, Scheme Participants registered on
the record date to participate in the Scheme will receive from the Company a
cash amount of 200 cents per WIPHOLD Share. It is the intention of the Proposer
to implement the Scheme as soon as is reasonably possible, but in any event by
not later than 30 April 2003.
4. Suspensive conditions
The proposal of the Scheme is subject to the receipt of a favourable opinion as
to the tax consequences to the Company of the Scheme and the subsequent
restructuring of the Company`s share capital.
The implementation of the Scheme is subject to the fulfillment of the following
suspensive conditions:
- obtaining the requisite approvals from the JSE Securities Exchange South
Africa ("the JSE") and the Securities Regulation Panel ("the SRP") for the
circular containing details of the Scheme to be mailed to WIPHOLD shareholders;
- obtaining approval from the JSE for the termination of the listing of the
Company following implementation of the Scheme;
- obtaining the approval of the South African Reserve Bank and any other
regulatory authorities having jurisdiction over the proposed transaction, to the
extent required;
- the High Court of South Africa (Transvaal Provincial Division) ("the Court")
granting an order for the convening of a meeting of the WIPHOLD shareholders to
consider and vote on the Scheme ("the Scheme Meeting");
- the approval of the Scheme by a majority representing not less than 75% of the
votes exercised by Scheme Participants at the Scheme Meeting;
- the passing of requisite resolutions by the shareholders of the Company to
enable the Scheme to be implemented;
- the Court granting an order sanctioning the Scheme ("the Court Order");
- the registration by the Registrar of Companies of of the Court Order.
5. Cash confirmation
Old Mutual Specialised Finance (Proprietary) Limited has confirmed to the SRP
that the Company will have sufficient cash resources available to meet its
obligations to Scheme Participants under the Scheme.
6. The Proposer`s shareholding
At the date of this announcement, the Proposer owns all the ordinary "A" shares,
approximately 37% of the ordinary "B" shares and all the ordinary "C" shares in
the issued share capital of the Company.
7. Irrevocable undertakings
The Company has received written irrevocable undertakings from shareholders who
currently collectively hold approximately 46% of all the "B" ordinary shares in
the Company held by Scheme Participants, to vote in favour of the Scheme. One
undertaking, given by an asset manager, in respect of 28% of the "B" ordinary
shares in the Company held by Scheme Participants, has been given subject to it
remaining the asset manager with respect to those shares and not receiving
countermanding instructions from its client.
8. Financial effects
Set below are the pro-forma financial effects of the Scheme on earnings and net
asset value for Scheme Participants.
Before the After the Change
Scheme (Note 1) Scheme (Note 2) (%)
(cents) (cents)
Headline
earnings per 2.2 6.6 200.0
share
Net asset
value per 332 200 (39.7)
share
Tangible net
asset per 292 200 (31.5)
share
Market value
per share 140 200 42.9
Notes:
1. The "Before" figures for headline earnings per share, net asset value per
share and tangible net asset value per share are based on WIPHOLD`s unaudited
interim results for the six months ended 31 August 2002. The "Before" figure for
market value per share is the closing price of WIPHOLD shares on the JSE on 30
September 2002, being the price immediately prior to the release on SENS, of the
first cautionary announcement on 30 September 2002.
2. The effects of the Scheme on earnings per share and net asset value per
share have been calculated without taking into account any distributions made by
the Company to its shareholders and based on the following assumptions:
- The effect of headline earnings per share assumes that the Scheme was
implemented on 1 March 2002 and that Scheme Participants were able to invest the
Scheme consideration of 200 cents per share on call at an after-tax interest
rate of 6,6% per annum for the six months to 31 August 2002;
- The effects on net asset value per share and tangible net asset value per
share assume that the Scheme was implemented on 31 August 2002; and
- The effect on market value per share assumes that the Scheme was
implemented on 30 September 2002, being the date of the first cautionary
announcement.
9. Salient dates and times
2003
Circular posted to shareholders on Wednesday 5 February
Last day to trade in shares in order to Thursday 27 February
vote at the Scheme Meeting on
Voting record date on Thursday 6 March
Last day to lodge form of proxy for the Friday 7 March
Scheme Meeting by 10:00 on
Last day to lodge form of proxy for Friday 7 March
the General Meeting by 10:30 on
Scheme Meeting to be held at 10:00 on Monday 10 March
General Meeting to be held at 10:30 on Monday 10 March
Court hearing at 10:00 or soon Tuesday 18 March
thereafter as Counsel may be heard, to
sanction the Scheme on
Result of the Scheme released on SENS Tuesday 18 March
on
Result of the Scheme published in the Wednesday 19 March
press on
Order of Court sanctioning the Scheme Thursday 20 March
registered by the Registrar of
Companies on
Operative date of the Scheme on Thursday 20 March
Last day to trade Scheme shares in Thursday 20 March
order to receive the Scheme
consideration on
Listing of WIPHOLD suspended on the JSE Monday 24 March
from the commencement of trade on
Record date to determine participation Friday 28 March
in the Scheme consideration on
Scheme consideration cheques posted to Monday 31 March
certificated Scheme Participants,or
deposited directly into certificated
scheme participant` bank accounts or
holders of dematerialised shares will
have their accounts credited at their
CSDP or broker on
Termination of WIPHOLD listing on the Tuesday 1 April
JSE from the commencement of trade on
1. These dates and times are subject to change. Any such change will be
released on SENS and published in the press.
2. If a form of proxy in respect of the Scheme meeting is not received by the
time and date shown above, it may be handed to the Chairman of the meeting, no
later than 10 minutes before the commencement of the meeting.
3. Share certificates may not be dematerialised or rematerialised after
Thursday 20 March 2003.
10. Further documentation
A circular providing information on the Scheme and containing, inter alia, a
notice of the Scheme Meeting will be mailed to WIPHOLD shareholders on or about
Wednesday 5 February 2003.
11. Withdrawal of cautionary announcement
As further information has been provided, the cautionary announcement published
by the Company on 11 November 2002 is hereby withdrawn.
18 December 2002
Johannesburg
Corporate advisor
HJS Advisory Services (Proprietary) Limited
Sponsor
ENF Sponsors (Proprietary) Limited
Joint sponsor
Wipcapital (Proprietary) Limited
Corporate law advisors & consultants
Edward Nathan & Friedland (Proprietary) Limited
Advisor to Old Mutual
Old Mutual Specialised Finance (Proprietary) Limited
Date: 18/12/2002 05:15:02 PM Produced by the JSE SENS Department
