| Wed 26 Mar 2003, 17:21 | | Mettle - Announcement |
|
Mettle Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/010795/06)
(Formerly Greenwich Group Limited)
Share code: MEL ISIN: ZAE000028569
("Mettle" or "the company")
ANNOUNCEMENT REGARDING:
* Repurchase offer to Mettle shareholders at 50 cents per share, alternatively
offer to Mettle shareholders by Hosken Consolidated Investments Limited ("HCI")
at 50 cents per share; and
* Proposed delisting of Mettle from the JSE Securities Exchange South Africa
("the JSE")
1.Introduction
Further to the cautionary announcements published on 20 February 2003 and 20
March 2003, shareholders of Mettle ("Mettle shareholders") are advised that:
1.1 HCI has indirectly acquired an additional 38 483 442 shares in the issued
share capital of Mettle ("the subject acquisition") at 43 cents per share,
resulting in HCI"s indirect shareholding in Mettle increasing to 283 007 671
shares, representing 52,1% of the entire ordinary issued share capital of
Mettle. In terms of an undertaking given to the Securities Regulation Panel
("SRP"), and pursuant to a dispensation granted by the SRP at the time that
Mettle initiated its share repurchase programme, HCI is obliged to make an
unconditional offer ("the mandatory offer") to all the other Mettle shareholders
("minority shareholders"), to purchase all or any of the shares in the issued
share capital of Mettle held by them. The Executive Committee of the SRP has
ruled that the offer to be extended to Mettle"s minority shareholders be at a
price of 50 cents per share ("offer price").
1.2 The board of directors of Mettle ("the Mettle Board") has resolved to seek
the approval of Mettle shareholders at a general meeting ("the subject general
meeting") for the delisting of the shares of Mettle from the JSE, subject to the
fulfilment of the conditions precedent more fully set out in paragraph 5 of this
announcement ("the delisting").
1.3 The Mettle Board has further resolved to seek the approval of Mettle
shareholders at the subject general meeting, to a specific share repurchase by
Mettle from all Mettle shareholders, of all or any of the shares in the issued
share capital of Mettle held by them, at the offer price ("the repurchase
offer"), subject to the fulfilment of the conditions precedent more fully set
out in paragraph 6 of this announcement.
1.4 In the event that the repurchase offer is not implemented for whatsoever
reason, an alternative offer will be deemed to have been made by HCI to all the
minority shareholders, to purchase all or any of the shares in the issued share
capital of Mettle held by them, at the offer price ("the alternative offer").
2. Rationale for acquisition of shares by HCI
HCI has taken advantage of an opportunity to increase its shareholding in
Mettle through the subject acquisition.
3. Rationale for the delisting
The Mettle Board has concluded that the delisting of the company should be
undertaken as part of the repurchase offer, alternatively as part of the
alternative offer as there are no benefits to be derived from the continuation
of Mettle"s listing on the JSE. The market sentiment towards small and medium-
sized capitalisation companies in the financial services sector, such as Mettle,
is not favourable and the Mettle Board is of the view that it is unlikely that
the market rating of such companies will improve in the short to medium term.
4. Pro forma financial effects
4.1 The table below sets out the unaudited pro forma financial effects on Mettle
of the repurchase offer, based on the published unaudited interim financial
results of Mettle for the six months ended 30 September 2002. The unaudited pro
forma financial effects have been prepared for illustrative purposes only to
provide information about how the repurchase offer might have affected the
earnings and net asset value per share of Mettle, had the repurchase offer been
effective on 1 April 2002 and 30 September 2002 for the purposes of earnings and
net asset value per share respectively. The financial effects therefore may not
give a true reflection of Mettle"s financial position or the effect on future
income.
Before the After the
repurchase offer repurchase offer Change
(cents)1 (cents) (%)
Earnings per share 6,35 7,812 22,99
Headline earnings per share 7,08 8,772 23,87
Net asset value per share4 62,32 66,633 6,92
The table has been prepared on the following basis:
1. Extracted from the published unaudited results of Mettle for the six months
ended 30 September 2002.
2. Adjusted to reflect the interest effect of the cash resources utilised to
finance the specific repurchase, as calculated using the average overnight call
deposit rate for the six months ended 30 September 2002 of 10,96% and a tax rate
of 30%. The maximum number of shares to be repurchased in terms of the specific
repurchase is 140 315 665.
3. The net asset value per share was calculated using 401 257 295 shares (453
770 235) less 52 512 940 treasury shares). The headline earnings and earnings
per share were calculated using a weighted average of 428 487 296 shares.
4. There is no goodwill on the balance sheet, therefore the net tangible asset
value per share is equal to the net asset value per share.
4.2 The table below sets out the unaudited pro forma financial effects of the
repurchase offer on Mettle shareholders, based on the published unaudited
interim financial results of Mettle for the six months ended 30 September 2002
and taking into account the effects of the repurchase offer and alternative
calculated in paragraph 4.1. The financial effects detailed below are for
illustrative purposes only and therefore may not give a true reflection of the
effect of the repurchase offer on a Mettle shareholder.
Remain a shareholder Sale of share Change
Notes (cents) (cents) (%)
Headline earnings per share 1 8,77 1,92 (78,11)
Market value per share 2 43,00 50,00 16,28
Market value per share 3 43,70 50,00 14,4
Tangible net asset value 4 66,63 50,00 (24,96)
The table has been prepared on the following basis:
1. The "Remain" column represents the unaudited pro forma headline earnings per
Mettle share for the six months ended 30 September 2002 taking into account the
effect of the repurchase offer calculated in paragraph 4.1. The "Sale" column
reflects the after-tax interest income, at a tax rate of 30%, that a Mettle
shareholder would have earned had the offer consideration been invested at an
after-tax rate of 7,7% for the six months ended 30 September 2002.
2. The market value in the "Remain" column is the closing price of Mettle shares
on the last trading day prior to the publication of the first cautionary
announcement on 20 February 2003. The "Sale" column shows the offer
consideration.
3. The market value in the "Remain" column is the weighted average traded price
of Mettle shares over the 30 trading days prior to the publication of the first
cautionary announcement on 20 February 2003. The "Sale" column shows the offer
consideration.
4. The "Remain" column is the unaudited pro forma tangible net asset value per
share of Mettle at 30 September 2002 taking into account the effect of the
repurchase offer calculated in paragraph 4.1. The "Sale" column shows the offer
consideration.
5. The above calculations exclude the effect of capital gains tax on Mettle
shareholders.
5. Conditions precedent governing the delisting
The implementation of the delisting is subject in its entirety to the
fulfilment of the following conditions precedent:
* the passing by the requisite majority of Mettle shareholders, excluding HCI
the controlling shareholder, at the subject general meeting of the ordinary
resolution required to implement the delisting; and
* the furnishing by the JSE and the SRP of all regulatory consents and
authorities required of them for the purposes of the delisting, either
unconditionally or on terms and conditions acceptable to the Mettle Board.
6. Conditions precedent governing the repurchase offer
The implementation of the repurchase offer is subject in its entirety to the
fulfilment of the following conditions precedent:
* the passing by the requisite majority of Mettle shareholders, excluding HCI,
at the subject general meeting of the special resolution required to implement
the repurchase, the specific offer and the registration of such special
resolution by the Registrar of Companies; and
* the furnishing by the JSE and the SRP of all regulatory consents and
authorities required of them for the purposes of the repurchase offer, either
unconditionally or on terms and conditions acceptable to the Mettle Board.
7. Opinions
The Mettle Board will instruct an independent financial advisor, to review
and consider the terms and conditions of the repurchase offer and the
alternative offer, respectively. The views of the independent advisor will be
included in the circular referred to below.
8. Cash confirmation to the SRP
FirstRand Bank Limited has satisfied the SRP that HCI has sufficient cash
resources available to it, to meet all its financial obligations in terms of the
alternative offer.
9. Irrevocable undertakings
Minority shareholders holding 19,5% of all the issued Mettle shares have
given irrevocable undertakings not to accept the alternative offer.
Mettle shareholders, excluding HCI which in terms of the JSE Listings
Requirements is not allowed to vote on the delisting, holding 54,4% of the
eligible votes have given irrevocable undertakings to vote in favour of the
delisting.
10. Further announcement and documentation
Subject to the necessary approvals from the JSE, the SRP and the South
African Reserve Bank, a circular, containing full details of the repurchase
offer, the alternative offer and notice convening the subject general meeting to
approve the delisting and repurchase offer, will be posted to Mettle
shareholders within 28 days.
A further announcement setting out the salient dates and times of the
repurchase offer or alternative offer, as the case may be, and the subject
general meeting will be published in the press in due course.
Illovo
26 March 2003
by Hosken Consolidated Investments Limited ("HCI") at 50 cents per share; and
* Proposed delisting of Mettle from the JSE Securities Exchange South Africa
("the JSE").
Corporate advisor to Mettle
METTLE
Attorneys
Prinsloo, Tindle& Andropoulos Inc.
Attorneys
(Registration number 1998/021593/2)
Sponsor
Exchange Sponsors
Reporting accountants
PriceWaterHouseCoopers Inc
Chatered Acountants (SA)
Registered Accountants and Auditors
(Registration number1998/012055/21)
