| Tue 27 May 2003, 15:17 | | Invicta Holdings Limited - Proposed Specific Repur |
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Invicta Holdings Limited - Proposed Specific Repurchase Of
Invicta Shares And Withdrawal Of Cautionary Announcement
Invicta Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/002182/06)
Share code IVT ISIN ZAE 000029773
("Invicta" or "the Company")
PROPOSED SPECIFIC REPURCHASE OF INVICTA SHARES AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement that appeared in the press on 21 May
2003, Nedbank Corporate, a division of Nedbank Limited, is authorised to
announce that a significant institutional shareholder of Invicta shares ("the
Seller"), Invicta, and a financial institution ("the warehousing agent") have
reached agreement, which will result in Invicta acquiring the Seller"s entire
shareholding of 16 956 218 ordinary shares in Invicta (representing
approximately 23% of the current issued share capital of Invicta), at a price of
550 cents per Invicta share, excluding the final dividend for the period to 31
March 2003, plus an amount computed by reference to the warehousing agent"s
acquisition and holding costs ("the repurchase price").
2. Background to the specific repurchase
The Seller originally held 20 956 218 Invicta shares. It was willing to sell
them in one block, provided the transaction was completed through the market
within a certain time-frame. The board of directors of Invicta was unanimously
of the view that a repurchase of shares would be in the best interest of Invicta
shareholders. However, the repurchase of the entire block of offer shares would
have resulted in a gearing level which would have placed undue financial
pressure on the Company and, accordingly, the directors resolved that it would
be appropriate for the company to repurchase only 16 956 218 shares from the
Seller. Invicta approached a financial institution ("the warehousing agent") to
act as facilitator in acquiring the 16 956 218 Invicta shares ("the warehouse
shares") at a price of 550 cents per share, excluding the dividend for the
period to 31 March 2003 and effectively warehouse such shares until Invicta
obtains the necessary regulatory and shareholder approvals to repurchase the
warehouse shares from the warehousing agent ("the specific repurchase").
In order to provide the Seller with a total exit, it was agreed that a special
purpose vehicle ("SPV"), which includes Messrs Goldstone, Rose-Innes and
Samuels, would acquire the balance of 4 million shares. The transaction was
agreed on 30 March 2003 and the sale of the 4 million shares effected
immediately thereafter, as the directors would otherwise have been restricted
from trading in Invicta shares as a result of the Company"s closed period. In
terms of the agreement, the Company undertook to the Seller to use its best
endeavours to put in place the warehousing arrangement to take up the balance of
the shares on the terms and conditions set out above.
All the conditions pertaining to the warehousing arrangement have now been
fulfilled and the sale of the warehouse shares is expected to take place on
Monday 9 June 2003.
3. The specific repurchase
3.1 Terms of the repurchase
In terms of the specific repurchase, the Company will, subject to the fulfilment
of the condition precedent detailed in 3.3 below, repurchase the warehouse
shares, comprising approximately 23% of the issued share capital of Invicta,
from the warehousing agent at the repurchase price.
3.2 Rationale
Invicta has, in line with its policy to create and enhance shareholder value,
consistently been repurchasing securities in the open market over the past two
financial years when it made sound business sense to do so. The board of
directors has considered the terms of the specific repurchase and are
unanimously of the opinion that the transaction is in the best interest of the
Company and its shareholders and consistent with its stated policy to repurchase
securities when it makes business sense to do so.
3.3 Conditions precedent
The specific repurchase is conditional upon, inter alia, the following
conditions precedent:
- the requisite approvals being received from the Securities Regulation
Panel (SRP") and the JSE Securities Exchange South Africa ("JSE");
- the approval of the specific repurchase by Invicta shareholders in
general meeting, excluding the shares held by the warehousing agent, the SPV and
Messrs Goldstone, Rose-Innes and Samuels; and
- registration of the special resolutions by the Registrar of Companies.
3.4 Funding for the specific repurchase
The specific repurchase will be funded by a combination of available cash
resources and overdraft facilities from Invicta"s bankers, if required at the
time.
3.5 Treatment of repurchased securities
Invicta will, pursuant to the specific repurchase, retain up to the statutory
maximum of 10% of its issued share capital as treasury stock and cancel the
balance of the shares repurchased.
3.6 Related party and voting
In terms of the Listings Requirements, the SPV and Messrs Goldstone, Rose-Innes
and Samuels, who indirectly participated in the initial purchase of 4 million
shares from the Sellers, are related parties to Invicta in respect of the
specific repurchase. Accordingly, the shares held by the SPV and Messrs
Goldstone, Rose-Innes and Samuels will not be allowed to be represented or vote
at the Invicta general meeting to vote on the specific repurchase.
In addition, the shares held by the warehousing agent will, in terms of the
Listings Requirements not be allowed to be represented or vote at the Invicta
general meeting to vote on the specific repurchase.
4. Financial effects
The table below sets out the effects of the share repurchase on the earnings per
share ("EPS"), headline earnings per share ("HEPS") and net tangible asset value
per share ("NTAV"), and net asset value per share ("NAV") of the Company based
on the audited financial results for the year ended 31 March 2003, being the
most recent reporting period. The EPS, HEPS, NTAV and NAV, have been calculated
by assuming:
- that the share repurchase was concluded on 01 April 2002;
- that the funds utilised to repurchase the shares were sourced from
borrowings on which interest of 15.5% is payable;
- a company tax rate of 30%; and
- by applying the same accounting policies used in the Company"s latest
audited annual financial statements.
Percentage
Before(1) After Increase/
(cents) (cents) (Decrease)
EPS 133 158 19%
HEPS 136 162 19%
NTAV 455.2 411.2 -10%
NAV 471.8 432.8 -8%
Number of 72 841 55 885 -23%
ordinary shares 504 286(2)
in issue
Weighted average 72 565 55 609 -23%
number of 308 090(2)
ordinary shares
in issue
(1) Extracted from the published financial results for the year ended 31 March
2003.
(2) Excluding the shares repurchased and held as treasury shares, being the
statutory maximum of 10% of the issued share capital of the Company.
5. Waiver of mandatory offer
Pursuant to the specific repurchase, the shareholding of Dr Wiese, a non-
executive director of Invicta, will increase from approximately 32% to
approximately 41% of the issued share capital of the Company. In terms of the
SRP Code on Takeovers and Mergers, a mandatory offer must be made when a
shareholder moves through the statutory threshold of 35%. However, having regard
to the circumstances, which will result in the increase in the shareholding of
Dr Wiese through the 35% threshold, the SRP has ruled that a mandatory offer
does not have to be made by Dr Wiese. The ruling is subject to the condition
that Dr Wiese will not exercise voting rights in excess of 34,9% of the votes
exercisable at any general meeting of the Company and further that Dr Wiese will
not be allowed to increase his shareholding in the Company for so long as he is
the holder of more than 34.9% of the issued share capital of Invicta, without
triggering a mandatory offer to all other shareholders at that time.
6. Irrevocable commitments
Invicta has received irrevocable commitments from shareholders holding
approximately 78 % of the shares that can be voted at the general meeting to be
convened in terms of paragraph 7 hereunder, that they will vote in favour of the
requisite special resolution to give effect to the specific repurchase.
7. Documentation and general meeting
A circular containing full details of the proposed specific repurchase and
convening a general meeting of Invicta shareholders to pass the requisite
special resolution will be sent to Invicta shareholders in due course.
8. Withdrawal of cautionary announcement
As the terms of the proposed specific repurchase has been announced,
shareholders are advised that caution need no longer be taken when dealing in
the securities of the Company.
Constantia
27 May 2003
Investment Bank and Auditor and Reporting Legal Advisors to
Sponsor to Invicta accountant Invicta
Nedbank Corporate Deloittes Bernadt, Vukic, Potash
& Getz
Date: 27/05/2003 12:52:43 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
