| Fri 1 Aug 2003, 17:47 | | Sale of 10% of BJMH to a Black Economic |
|
Barnard Jacobs Mellet Holdings Limited -
Barnard Jacobs Mellet Holdings Limited
Registration number: 1995/004798/06
Share code: BJM
ISIN: ZAE000014262
("BJMH")
Sale of 10% of BJMH to a Black Economic Empowerment ("BEE") consortium
1. INTRODUCTION
Rand Merchant Bank, a division of FirstRand Bank Limited, and Barnard Jacobs
Mellet Corporate Finance (Proprietary) Limited are authorised to announce that
BJMH and a BEE consortium, comprising key members of the management and staff of
Mazwai & Co Securities (Proprietary) Limited ("Mazwai Securities") (together
referred to as the "Mazwai Consortium"), have concluded a memorandum of
understanding for the sale of 10% of BJMH to the Mazwai Consortium ("the
transaction").
2. RATIONALE
BJMH is committed to South Africa and fully embraces the changes that are
currently taking place in the country in respect of BEE. BJMH also has a long-
standing relationship with Andile Mazwai, who is a former employee and a current
non-executive director of BJMH. In July 2001, Mr Mazwai together with BJMH, as
minority partner, formed Mazwai Securities as a joint venture. Mazwai
Securities has, in a relatively short space of time, established itself as one
of the most prominent empowerment stockbroking firms in South Africa. BJMH and
Mazwai Securities both operate in the same market and a natural strategic fit
exists between these two companies. It is thus appropriate that the Mazwai
Consortium participates in the introduction of a BEE shareholding in BJMH, thus
further entrenching the relationship.
There are a number of strategic empowerment shareholders already invested in
BJMH. These shareholdings, together with the shareholding achieved pursuant to
the transaction, will enable BJMH to achieve an effective BEE shareholding in
excess of 15%.
3. THE TRANSACTION
The salient terms of the transaction are as follows:
* BJMH will acquire the 51% of Mazwai Securities that it currently does not own
from the shareholders of Mazwai Securities, Andile Mazwai and Phumzile Langeni;
* the Mazwai Consortium will acquire 10% of the ordinary issued shares of BJMH
which are currently held as treasury shares by Barnard Jacobs Mellet Securities
(Proprietary) Limited ("BJMS"), a subsidiary of BJMH; and
* the Mazwai Consortium will issue cumulative redeemable variable rate
preference shares in favour of BJMH.
Should less than 50% of the preference shares be redeemed after 5 years, BJMH
has the right to acquire all the BJMH shares held by the Mazwai Consortium.
Should all the preference shares not be redeemed after 10 years, BJMH shall
acquire a portion of the BJMH shares in lieu of the unredeemed preference
shares.
In terms of the JSE Securities Exchange South Africa Listings Requirements, the
transaction is classified as a related party transaction as Andile Mazwai is a
non-executive director of BJMH. Accordingly shareholder approval for the
transaction is required and a fair and reasonable opinion relating to the
fairness and reasonableness of the transaction will be obtained.
The effective date for the transaction is 1 August 2003.
4. CONDITIONS PRECEDENT
The transaction is subject to fulfilment of the following conditions precedent:
the approval of the appropriate regulatory authorities; and
the approval of the respective shareholders of BJMH and Mazwai Securities.
5. MANAGEMENT CHANGES
Subject to the approval of the board of BJMH, Andile Mazwai will be appointed
CEO of BJMS and co-CEO of BJMH as soon as is practicable after the effective
date of the transaction. Phumzile Langeni will be appointed Executive Director
of BJMS, with responsibility for New Business Development.
Kevin Jacobs, CEO of BJMH, will remain in office and jointly, with Andile Mazwai
and the members of the BJMH board of directors, be responsible for setting the
strategic direction and vision of BJMH. Sidney Rebe, the current CEO of BJMS,
will remain chairman of the executive committee of BJMS and a member of the
group executive committee of BJMH.
6. BJMH BEE SHARE TRUST
In addition to the empowerment initiatives of the transaction, BJMH will form an
empowerment share trust for the specific purpose of enabling current employees
to participate in and benefit from the future growth of BJMH and its
subsidiaries. The quantum and qualifying terms and conditions of such an
empowerment share trust have not yet been formulated.
7. FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the transaction on
BJMH"s earnings, net asset value, headline earnings and net tangible asset value
per share.
Actual Pro forma (Decrease (Decreas
before after the ) / e) /
the transacti Increase Increase
transacti on (cents) (%)
on (cents)
(cents)
Earnings 1.63 1.46 (0.17) (10.0)
Net asset value 325.66 293.10 (32.56) (10.0)
Headline 2.10 1.89 (0.21) (10.0)
earnings
Net tangible 325.32 292.78 (32.54) (10.0)
asset value
The pro forma financial effects of the transaction are based on the following
assumptions:
* the earnings, net asset value, headline earnings and net tangible asset value
per share reflected in the "before" column were extracted from the audited
results of BJMH for the year ended 31 March 2003;
* the effect on net asset value and tangible net asset value per share reflected
in the "after" column assumes that the transaction was effected on 31 March
2003; and
* the effect on basic earnings and headline earnings per share reflected in the
"after" column assumes that the transaction was effected on 1 April 2002.
8. DOCUMENTATION
A circular containing full details of the transaction, a notice of general
meeting and the fair and reasonable opinion will be posted to BJMH shareholders
on or about 29 August 2003.
Johannesburg
1 August 2003
Merchant Corporate Lead Legal Corporate Legal
bank and adviser sponsor adviser adviser adviser
independe and joint to BJMH to BJMH to Mazwai to Mazwai
nt sponsor Consortiu Consortiu
adviser to BJMH m m
to BJMH
Rand Barnard Deloitte Prinsloo, Java Ledwaba
Merchant Jacobs & Touche Tindle & Capital Mazwai
Bank Mellet Sponsor Andropoul Attorneys
Corporate Corporate Services os Inc
Finance Finance (Pty)
(Pty) Ltd Limited
Date: 01/08/2003 05:30:10 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
