| Fri 20 Dec 2002, 10:25 | | Iscor - Announcement |
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Iscor - Announcement
Release Date: 20/12/2002 08:20:05 Code(s): ISC
Iscor - Announcement
ISCOR LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/002164/06)
Share code: ISC ISIN number: ZAE000022729)
("Iscor" or "the company")
THE RESPONSE BY THE BOARD OF DIRECTORS OF ISCOR TO THE CONDITIONAL PARTIAL OFFER
BY LNM HOLDINGS N.V. TO ISCOR MINORITY SHAREHOLDERS AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. Introduction
Iscor shareholders are referred to the announcements published on 3 December
2002 and 6 December 2002 together with the circular posted to Iscor shareholders
on 6 December 2002 by LNM Holdings N.V. ("LNM"), setting out the terms and
conditions of the conditional partial offer to all Iscor shareholders other than
LNM, its nominees, its associates and parties acting in concert with LNM ("Iscor
minority shareholders"). In terms of the partial offer, it is LNM`s intention to
acquire a further 12,19% of the issued share capital of Iscor, equivalent to
18,7% of each Iscor minority shareholder`s holding, for a cash consideration of
R30 per share, subject to the fulfilment or waiver (as applicable) of the
conditions precedent ("the partial offer").
To the extent that some Iscor minority shareholders elect not to accept the
partial offer, the percentage of other Iscor minority shareholders holdings that
can be disposed of in terms of the partial offer, will increase in the event
that they have tendered Iscor shares in excess of 18,7% of their holdings of
Iscor shares.
Iscor shareholders are also referred to the preliminary response to the partial
offer by the board of directors of Iscor (" the Iscor board") and the cautionary
announcement published on 3 December 2002.
2. The partial offer and its consequences
2.1 LNM currently owns, directly or indirectly, 34,81% of the issued share
capital of Iscor. Should LNM acquire in excess of 35% of the issued share
capital of Iscor, then in terms of the Securities Regulation Code on Take-overs
and Mergers and the Rules of the Securities Regulation Panel ("the SRP") ("the
Code"), unless the SRP rules otherwise, a mandatory offer must be extended, by
LNM, to all Iscor minority shareholders at the same price as was operative in
the relevant acquisition ("the mandatory offer").
2.2 On 6 December 2002, LNM delivered a requisition, in terms of section 181 of
the Companies Act, 1973 (Act 61 of 1973)("the Act") to convene an extraordinary
general meeting ("the general meeting") of Iscor minority shareholders for the
purpose of considering and, if deemed fit, approving an ordinary resolution to
waive the requirement for LNM to make a mandatory offer to Iscor minority
shareholders as a result of the acquisition pursuant to the partial offer of
such number of Iscor shares as shall constitute LNM the holder of more than 35%
but not more than 50% of the issued share capital of Iscor ("the waiver
resolution"). One of the conditions precedent to the partial offer is that a
simple majority of Iscor minority shareholders vote in favour of the waiver
resolution at the general meeting.
2.3 Should the partial offer be fully implemented, LNM will hold 47% of Iscor`s
issued share capital. In terms of the Business Assistance Agreement between LNM
and Iscor, which was approved by Iscor shareholders on 15 January 2002 ("the
Business Assistance Agreement"), on the attainment of certain sustainable cost
savings over the three years ending 31 December 2004, Iscor will issue to LNM
from 5% to 10% of its issued share capital (after the Iscor rights issue that
took place in March 2002) ("the Remuneration Shares"), with a maximum award of
4,9% in any 12 month period.
2.4 Any Iscor shares acquired by LNM subsequent to the implementation of the
partial offer will be subject to the "creep" provisions of the Code and an
opinion received from the SRP, in that, should LNM acquire more than 5% of the
issued shares of Iscor, excluding the shares acquired in terms of the partial
offer, in any 12 month period, including any 12 month period in which it
increases its shareholding in Iscor to 50% or more it will be required to extend
a mandatory offer to Iscor minority shareholders
2.5 Consequently, Iscor minority shareholders must be aware that the
implementation of the partial offer, which includes the waiver of a mandatory
offer by Iscor minority shareholders, together with the issue of the
Remuneration Shares, may effectively enable LNM to acquire control of Iscor over
time, without the requirement of making a mandatory offer to Iscor minority
shareholders.
Iscor Interim Results
In order to enable Iscor minority shareholders to make an informed decision on
the waiver resolution and on whether they should accept the partial offer, the
Iscor board has resolved to release the Iscor interim results for the six month
period ending 31 December 2002 ("the Iscor Interim Results") on Tuesday, 14
January 2003, which is one week prior to the general meeting.
Opinion of the independent adviser
Investec has been appointed as independent adviser to the Iscor board, to advise
the Iscor board on the terms and conditions of the partial offer, including the
waiver. As at Tuesday, 17 December 2002 Investec`s opinion and advice is that
the terms and conditions of the partial offer are, from a financial point of
view, fair and reasonable to Iscor minority shareholders.
Opinion and recommendations of the Iscor board
The Iscor directors with a direct or indirect interest in the partial offer,
being Messrs LN Mittal, A Mittal and S Maheshwari, recused themselves from
offering an opinion or recommendation to Iscor minority shareholders in respect
of the waiver resolution and in respect of whether or not to accept the partial
offer.
Opinion
It is the opinion of the Iscor board having considered the terms and conditions
of the partial offer, that they are fair and reasonable to Iscor minority
shareholders.
Recommendations
Voting at the general meeting
The Iscor board excluding Messrs LN Mittal, A Mittal and S Maheshwari ("the
Independent Iscor directors") recommends that Iscor minority shareholders vote
in favour of the waiver resolution at the general meeting.
The Iscor directors who have a direct or indirect interest in the partial offer,
being Messrs LN Mittal, A Mittal and S Maheshwari, will abstain from voting on
the waiver resolution. The Independent Iscor directors intend voting in favour
of the waiver resolution in respect of all their own direct and indirect
beneficial and non-beneficial holdings of Iscor shares.
Action in respect of the partial offer
The Independent Iscor directors recommend that Iscor minority shareholders
accept the partial offer.
The Independent Iscor directors intend to accept the partial offer in respect of
all their own, direct and indirect beneficial and non-beneficial holdings of
Iscor shares.
However, Iscor minority shareholders are advised not to surrender their Iscor
shares, nor to instruct their Central Securities Deposit Participants to
surrender their Iscor shares until the partial offer is declared unconditional.
Any form of acceptance of the partial offer before it is declared unconditional
effectively eliminates the Iscor minority shareholders ability to trade in their
Iscor shares during the period from the date of acceptance of the partial offer
until the partial offer is declared unconditional or lapses.
Notice of general meeting
In order to ensure Iscor minority shareholders have at least one week to review
the Iscor Interim Results, a general meeting of Iscor minority shareholders will
be held in the Auditorium, Iscor Corporate Centre, Roger Dyason Road, Pretoria
West at 14h00 on Wednesday, 22 January 2003 for the purpose of considering and,
if deemed fit, passing with or without modification, the waiver resolution.
Documentation
A circular setting out the Iscor board`s response to the partial offer and
waiver resolution will be posted to Iscor minority shareholders today, Friday,
20 December 2002 ("the circular").
Withdrawal of cautionary announcement
Iscor shareholders are referred to the cautionary announcement dated Tuesday, 3
December 2002 and are advised that as the Iscor board`s response to the partial
offer has now been published, caution is no longer required when dealing in
their Iscor shares.
Should any Iscor minority shareholders have any questions relating to the
general meeting, require assistance in completing the form of proxy included in
the circular, require assistance in accepting the partial offer, or have any
other questions they are encouraged to make use of the toll free Iscor ShareCare
Line on 0800 006 960 (or +27 11 775 3420 if calling from outside South Africa).
Pretoria
20 December 2002
Date: 20/12/2002 08:20:00 AM Produced by the JSE SENS Department
