| Thu 13 Mar 2003, 16:23 | | SFH - PROPOSED SCHEME OF ARRANGEMENT AND DE-LISTIN |
|
(Incorporated in the Republic of South Africa)
JSE code: HVN ISIN: ZAE000011045
(Registration number 1995/004137/06)
("SFH" or "the company")
PROPOSED SCHEME OF ARRANGEMENT AND DE-LISTING
1. Introduction
Further to the cautionary announcement dated 12 February 2003, Grant
Thornton Kessel Feinstein Corporate Sponsors (Proprietary) Limited is authorised
to announce that Lawrence Davidoff, who is the founder and Chief Executive
Officer of SFH ("Davidoff"), will propose a scheme of arrangement ("the scheme")
in terms of section 311 of the Companies Act, 1973 (Act 61 of 1973), as amended
("Companies Act, 1973") between SFH and its shareholders, to acquire all of the
shares held by such shareholders, other than those held by a consortium,
comprising Davidoff and, inter alia, the senior management of the company ("the
consortium"), for a consideration of three cents per SFH share ("the scheme
consideration").
The scheme is being proposed as an exit mechanism for shareholders, as set
out below, pursuant to the proposed de-listing of the company from the JSE
Securities Exchange South Africa ("JSE").
If the scheme is implemented, SFH will become wholly-owned by the
consortium.
In the event that the scheme is not implemented for whatever reason,
subject to the fulfilment of the conditions precedent in 3.2 below, a stand-by
offer will be deemed to be made by Davidoff to the shareholders other than the
consortium, at the same consideration as the scheme consideration ("the stand-by
offer").
2. Rationale
The directors of SFH are of the opinion that the continued listing of the
shares of the company on the JSE and the associated costs thereof, are no longer
justifiable given the very small market capitalisation of the company, the fact
that loans from the consortium have been subordinated to maintain solvency and
the fact that no benefits are anticipated to arise for the company by
maintaining its listing on the JSE.
Taking the above into account, the board of directors of SFH has therefore
resolved to seek the approval of shareholders at a general meeting for the
proposed de-listing of the shares of the company from the JSE. Shareholders are
urged to consider voting in favour of the scheme as it provides shareholders who
do not wish to hold shares in an unlisted company with what is deemed by the
consortium to be a fair and equitable basis to realise their investment by
receipt of the scheme consideration.
3. Conditions precedent
3.1 The scheme will be subject to the following conditions precedent:
- 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 Court sanctioning the scheme;
- A certified copy of the Order of Court sanction the scheme being registered
by the Registrar of Companies in terms of the Companies Act; and
- The approvals of the JSE, the Securities Regulation Panel ("SRP"), the
South African Reserve Bank and any other regulatory authorities, to the extent
required.
3.2 The stand-by offer is conditional upon:
- the passing of the necessary ordinary resolution at the general meeting
convened to be held to approve the de-listing;
- the approval of any regulatory authorities, to the extent required; and
- the scheme not being implemented.
4. Financial effects of the scheme
Note Before After Percent
s (cents) (cents) age
change
Earnings per share 1 0,64 0,74 15,6%
Headline earnings per 1 0,71 0,74 4,2%
share
Net asset value per 2 (7,53) 3,0 351,0%
share
Market value per share 3 4,0 3,0 (25,0%)
Market value per share 4 3,0 3,0 -
Notes:
1. The amount in the `Before" column is based on the interim financial results
of SFH for the six months ended 31 August 2002. The amount in the `After"
column represents the after-tax interest which a SFH shareholder with a marginal
tax rate of 30% would have earned, had the SFH shareholder invested an amount
equal to the scheme consideration for the six months ended 31 August 2002 at the
average 32 day call interest rate over that period, being 7%, compounded monthly
in arrears.
2. The amount in the `Before" column is based on the net asset value as per the
interim financial results of SFH at 31 August 2002 after deducting the
subordinated interest free shareholders" loans. The amount in the `After"
column represents the scheme consideration.
3.. The amount in the "Before" column is based on the share price of SFH shares
at the close of business on 10 February 2003, the last practicable date on which
SFH shares traded on the JSE prior to the publication of the cautionary
announcement in respect of the de-listing on 12 February 2003. The amount in
the "After" column represents the scheme consideration.
4. The amount in the "Before" column is based on the share price of SFH shares
at the close of business on 10 March 2003, the last practicable date on which
SFH shares traded on the JSE prior to the finalisation of this announcement.
The amount in the "After" column represents the scheme consideration.
5. Opinions and recommendations
Grant Thornton Kessel Feinstein Corporate Finance (Proprietary) Limited has
been appointed by an independent committee of the board as an independent
adviser to advise the board on whether it considers the terms and conditions of
the scheme and the stand-by offer to be fair and reasonable to SFH
shareholders.
6. Cash confirmation
The SRP has been provided with written confirmation that Davidoff has
sufficient resources at his disposal to satisfy full payment of the scheme
consideration to SFH shareholders, other than the consortium.
7. Documentation and further announcement
A circular containing full details of the scheme, the stand-by offer and
the proposed de-listing will be posted to SFH shareholders within 28 days of the
publication of this announcement. Further announcements including the salient
dates pertaining to the scheme, the stand-by offer and the proposed de-listing
will be published on the Securities Exchange News Service and in the press in
due course.
Johannesburg
13 March 2003
Transaction sponsor Attorneys
GRANT THORNTON KESSEL FLUXMANS INC.
FEINSTEIN CORPORATE
SPONSORS (PROPRIETARY)
LIMITED
Reporting accountants and Independent adviser
auditors
HORWATH LEVETON BONER GRANT THORNTON KESSEL
FEINSTEIN CORPORATE FINANCE
(PROPRIETARY) LIMITED
