| Mon 27 Jan 2003, 14:37 | | JD Group Limited - Offer To The Shareholders Of Pr |
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JD Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1981/009108/06)
Share code: JDG ISIN:ZAE000030771
("JD Group")
OFFER TO THE SHAREHOLDERS OF PROFURN LIMITED ("PROFURN") AND FURTHER CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Further to the announcement dated 13 December 2002, the JD Group board of
directors wishes to announce that, subject to the fulfillment of the conditions
precedent referred to in paragraph 5 below, agreement has been reached between
JD Group and Profurn in terms of which JD Group will extend an offer to the
shareholders of Profurn ("Profurn shareholders") for the acquisition of all of
their Profurn shares for a consideration as set out in paragraph 3 below ("the
acquisition" or "the transaction").
The transaction will be implemented by means of a scheme of arrangement ("the
scheme") in terms of section 311 of the Companies Act, No 61 of 1973, as amended
("the Companies Act"). In the event that the scheme is not implemented, a
conditional substitute offer under section 440 of the Companies Act will be made
to Profurn shareholders ("the substitute offer").
Upon implementation of the scheme or the substitute offer, as the case may be,
Profurn will become a wholly owned subsidiary of JD Group and the listing of the
Profurn shares on the JSE Securities Exchange South Africa ("JSE") , the
Namibian Stock Exchange ("NSX") and the Botswana Stock Exchange ("BSE") will be
terminated.
2. RATIONALE
The acquisition has the potential to enhance value for JD Group shareholders
with the extensive increased efficiencies that will result and at the same time
preserve jobs and the supply base in the industry, which are under threat.
3. CONSIDERATION
The scheme consideration will be settled by the issue of 53 700 000 JD Group
ordinary shares to Profurn shareholders, which equates to an effective exchange
ratio of 19.758460 JD Group shares for every 100 Profurn shares held. The issue
price of 1 842 cents per JD Group share was determined by using the 120 day
volume weighted average price, as traded on the JSE, preceding the date of this
announcement. These shares, upon issue, will rank pari passu in all respects
with existing JD Group shares.
JD Group has obtained an indemnity in respect of certain due diligence
differences, arising out of the due diligence investigation of Profurn by JD
Group, from FirstRand Bank Limited ("FirstRand"), being the major shareholder of
Profurn.
4. FINANCIAL EFFECTS OF THE ACQUISTION AND FURTHER CAUTIONARY ANNOUNCEMENT
The financial statements of JD Group are prepared on the historical cost basis
in accordance with South African Statements of Generally Accepted Accounting
Practice ("GAAP") and International Accounting Standards ("IAS"). During the
year ended 31 August 2002, JD Group changed its accounting policy relating to
financial instruments in accordance with IAS 39: Financial Instruments:
Recognition and Measurement.
The financial statements of Profurn are prepared on the historical cost basis in
accordance with GAAP.
As a result of the above, a simple aggregation of the financial results of JD
Group and Profurn may not be an accurate presentation of the financial effects
of the acquisition due to the different basis of accounting. A further
announcement will be made in respect of the financial effects of the acquisition
after having restated the Profurn financial results to be consistent with the
accounting policies of JD Group. Therefore, JD Group shareholders are advised
to continue to exercise caution in dealing in their securities until this
announcement is made.
5. CONDITIONS PRECEDENT
The acquisition is subject to the normal conditions precedent that would be
applicable to a transaction of this nature including, inter alia, the following:
- approval of the JSE, NSX and BSE, the Securities Regulation Panel ("SRP"), the
South African Reserve Bank and any other regulatory authorities to the extent
required;
- the approval of the resolutions relating to the acquisition by the requisite
majority of JD Group shareholders at a general meeting;
- the scheme being approved by a majority representing not less than 75% of the
votes exercisable by the scheme members present and voting, either in person or
by proxy, at the scheme meeting;
- the High Court of South Africa sanctioning the scheme and a certified copy of
the Order of Court being registered by the Registrar of Companies in terms of
the Companies Act; and,
- the finalisation of certain facilities agreements between JD Group and its
bankers; and,
- the furnishing of a fairness opinion, by an independent advisor to the Profurn
board, on whether the terms and conditions of the transaction are fair and
reasonable to Profurn shareholders.
6. UNDERTAKINGS FROM FIRSTRAND
FirstRand, which holds approximately 78,8% of Profurn`s issued share capital,
has irrevocably undertaken to vote in favour of any resolutions required to
implement the transaction.
7. DOCUMENTATION
A circular, which is subject to the approval of the JSE and SRP, containing full
details of the acquisition and incorporating a notice of general meeting of JD
Group shareholders, is in the process of being prepared and will be posted to JD
Group shareholders within 28 days of the publication of this announcement.
Further announcements, including the financial effects of the acquisition
referred to in paragraph 4 above and salient dates pertaining to the
transaction, will be published on the Stock Exchange News Service and in the
press in due course.
8. CONTACT DETAILS
Jan Bezuidenhout Director - Corporate +27 11 408 0213
Services
Nicholas Williams College Hill +27 11 447 3030
Johannesburg
27 January 2003
Investment Bank
and Transaction Sponsor Legal Adviser
Gensec Bank Limited Feinsteins
Corporate Finance Advisory
Date: 27/01/2003 02:29:53 PM Produced by the JSE SENS Department
