| Tue 17 Jun 2003, 17:28 | | OFFER TO REPURCHASE ALL OF THE OSI ORDINARY SHAR |
|
* OFFER TO REPURCHASE ALL OF THE OSI ORDINARY SHARES IN ISSUE,
OTHER THAN THOSE HELD OR CONTROLLED BY THE CONTROLLING
SHAREHOLDERS OF OSI
* SUSPENSION AND TERMINATION OF THE LISTING OF OSI ON THE JSE
SECURITIES EXCHANGE SOUTH AFRICA
1. Introduction
Merchant Sponsors (Proprietary) Limited is authorised to announce that the board
of directors of OSI ("the board") has resolved to offer to repurchase all of the
OSI ordinary shares in issue, other than the ordinary shares currently held or
controlled by Hennie Le Roux, Thijs Swart and the OSI Share Trust ("the
Controlling shareholders") ("the offer shares"), for a cash consideration of 22
cents per share ("the offer") and to suspend and subsequently terminate the
listing of the company on the JSE Securities Exchange South Africa ("the JSE").
The Controlling shareholders, who currently control 71,79% of the issued share
capital of OSI, have agreed to waive their right to participate in the offer.
2. Rationale for the offer
OSI is experiencing difficult trading conditions as a result of the downturn in
the technology sector and the airline industry from which it derives most of its
revenue.
The board is of the opinion that the negative sentiment towards companies with a
small market capitalisation and limited liquidity will preclude any rapid
recovery of the current trading price of OSI on the JSE.
Furthermore, the board is of the opinion that management time and expenses
related to the continued listing of OSI on the JSE are not justifiable. The
offer will:
* allow the holders of the offer shares ("the offer shareholders") to dispose
of their shares at a premium to the respective market prices (as set out in
paragraph 3.2); and
* result in the suspension and subsequent termination of the listing of OSI
on the JSE.
3. Salient features of the offer
3.1 Mechanics of the offer
OSI will make an offer to the offer shareholders to acquire the offer shares for
a cash consideration of 22 cents per share. The offer is conditional upon the
conditions precedent as detailed in paragraph 7.
The offer will be implemented by way of a repurchase by OSI of the offer shares.
3.2 Pro forma financial effects of the offer on an offer shareholder who
accepts the offer
Notes Before After Percentage
acceptance acceptance change if
of the of the the offer
offer offer is
(cents) (cents) accepted
Market value 1 15,00 22,00 46,67
per share
Market value 2 15,00 22,00 46,67
per share
Net tangible 3 24,04 22,00 (8,49)
asset value
per share
Notes:
Based on the weighted average trading price of OSI shares for the 30 trading
days up to and including 22 May 2003, being the last full trading month before
the cautionary announcement was published in the press.
Based on the closing price of OSI shares on the JSE on 13 June 2003, being the
trading day prior to the publication of this terms announcement.
3. Based on the net tangible asset value of an OSI share as at 30 September
2002, being the last financial reporting period.
3.3 Pro forma financial effects of the share repurchase on OSI
Before( After(c Percentag
cents)( ents)(N e change
Note 1) otes
1,2&3)
Loss per share and headline (1,37) (2,40) (75,18)
loss per share
Net asset value per share 27,18 29,50 8,54
Net tangible asset value per 22,75 23,09 1,49
share
Number of consolidated 52 000 35 918 (30,93)
shares in issue (`000)
Notes:
1. The loss per share, headline loss per share, net asset value per share
and net tangible asset value per share are based on the OSI audited results
for the 6 months ended 30 September 2002.
2. Assuming that the offer shares of 16 082 160 are repurchased in full
at the offer price of 22 cents per share for a total consideration of R3
538 075,20.
3. The calculations are based on South African company taxation rate of
30% and a compounded interest rate of 8,5% after tax.
4. For the purpose of the above pro forma financial effects, it has
further been assumed that the specific repurchase takes place on 1 April
2002 for the loss and headline loss per share and on 30 September 2002 in
respect of net asset value and net tangible asset value per share.
4. Irrevocable undertakings
Offer shareholders holding 77,54% of the offer shares, have furnished the
following irrevocable undertakings:
* to vote in favour of the special and ordinary resolutions to be proposed at
the general meeting for the purpose of the offer and the termination of the
listing of OSI on the JSE; and
* to accept the offer.
5. Confirmation to the Securities Regulation Panel (" the SRP")
The SRP has received written confirmation from the board that OSI has sufficient
resources to satisfy the offer consideration of R3,5 million, should the offer
be accepted in its entirety.
6. Salient dates of the offer
The expected salient dates of the offer are as follows:
2003
Circular posted to offer shareholders Monday, 30 June
together with audited annual financial
statements on or about
Last date to lodge forms of proxy for Tuesday, 22 July
the general meeting by 10h30 on
Annual general meeting held at 10h00 on Thursday, 24 July
General meeting held at 10h30, or so Thursday, 24 July
soon thereafter as the annual general
meeting has been concluded, on
Results of general meeting released on Thursday, 24 July
SENS on
Results of general meeting announced in Friday, 25 July
the press on
Should the offer become unconditional:
Offer opens at 09h00 on Friday, 25 July
Last day to trade on Friday, 8 August
Listing of OSI shares suspended on the Monday, 11 August
JSE from the commencement of business
on
Offer closes at 12h00 on Friday, 15 August
Record date on Friday, 15 August
Cheques posted to certificated Monday, 18 August
shareholders and CSDPs or stockbroker
accounts credited in respect of
dematerialised shareholders on
Results of the offer released on SENS Monday, 18 August
on
Results of the offer announced in the Tuesday, 19 August
press on
Listing of OSI shares terminated on the Tuesday, 19 August
JSE from the commencement of business
on
Cancellation of repurchased shares on Tuesday, 19 August
OSI reserves the right to invoke the provisions of section
440K of the Companies Act, 1973 (Act 61 of 1973), as
amended if acceptances representing not less than nine-
tenths of the offer shares are received from the offer
shareholders, in which case, the notice will be posted to
offer shareholders who have not accepted the offer on
Monday, 18 August 2003.
Notes:
1. The abovementioned dates and times are subject to amendment. Any such
amendments will be published in the press and released on SENS.
2. An announcement will be published in the press when the offer becomes
unconditional.
The final closing date may, subject to the approval of the SRP and the JSE, be
extended beyond the scheduled closing date.
3. Shares may not be dematerialised or rematerialised from Friday, 8 August
2003.
4. Dematerialised shareholders are required to notify their duly appointed
CSDP or stockbroker of their acceptance of the offer in the manner and time
stipulated in the agreement governing the relationship between the shareholder
and his/her CSDP or stockbroker.
7. Conditions precedent
The offer is conditional, inter alia, on the following conditions precedent:
shareholder approval in general meeting of the requisite resolutions required to
effect the share repurchase and the termination of the listing of OSI on the
JSE; and
the requisite approvals of the JSE, the SRP and the South African Reserve Bank.
8. Opinions and recommendations
The board is of the opinion that the offer is fair and reasonable to the
shareholders. They recommend that shareholders vote in favour of the requisite
resolutions to be proposed at the general meeting.
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited has been
appointed by the board, as an independent expert, to consider the terms and
conditions of the offer and advise offer shareholders as to whether the offer is
fair and reasonable. The opinion of PricewaterhouseCoopers Corporate Finance
(Proprietary) Limited will be included in the circular to be posted to OSI
shareholders.
9. Documentation
A circular, which is subject to the approvals of the JSE and the SRP, together
with a copy of the OSI audited financial statements for the year ended 31 March
2003, will be mailed to the offer shareholders by not later than 30 June 2003,
this circular will contain a financial effects calculation based on the audited
results for the year ended 31 March 2003.
Centurion
18 June 2003
Sponsor Legal advisor
Merchant Sponsors Fluxmans Incorporated
Corporate advisor INDEPENDENT ADVISOR
Merchantec Corporate PricewaterhouseCoopers Corporate
Finance Finance (Pty) Ltd
Reporting accountants
PricewaterhouseCoopers
