| Fri 3 Oct 2003, 17:38 | | ANNOUNCEMENT |
|
ELB GROUP LIMITED -
ELB GROUP LIMITED
(Formerly Edward L Bateman Limited)
(Registration number 1930/002553/06)
(Incorporated in the Republic of South Africa)
JSE code: ELB ISIN: ZAE000002374
("ELB")
*SPECIFIC ISSUE FOR CASH OF 3 000 000 ORDINARY SHARES IN THE CAPITAL OF ELB
("ELB SHARES") TO ELB STAFF HOLDINGS (PROPRIETARY) LIMITED ("STAFF HOLDINGS"),
AT A PRICE OF 500 CENTS PER SHARE
* ADOPTION OF THE ELB PARTICIPANTS SHARE TRUST
1. INTRODUCTION
Subject to the fulfilment of the conditions set out in 4 below, the board of
directors of ELB ("directors") has
1.1 resolved to issue 3 000 000 new ELB shares ("specific issue shares") to
Staff Holdings, at a price of 500 cents per share (the "specific issue"); and
1.2 established the ELB Participants Share Trust ("ELB trust") which will
acquire 5 586 355 ELB shares. These ELB shares will comprise the specific issue
shares plus an additional 2 586 355 existing ELB shares, all of which will be
acquired from Staff Holdings at a price of R3,53 per ELB share,
all in accordance with agreements concluded on 1 October 2003.
2. RATIONALE
Staff Holdings and the Edward L Bateman Limited Executive Share Trust ("Bateman
trust") were created in 1976 by the Bateman family, inter alia, in order to
establish a scheme in terms of which senior executives of ELB and its
subsidiaries ("the group") could acquire a beneficial interest in the dividends
of the group, thereby ensuring that the group continues to have the benefit of
an identity of interest between its shareholders and management
Staff Holdings is whollyowned by the Bateman trust save that the Bateman family
has an entitlement to be paid portion of all dividends paid to Staff Holdings by
ELB. Staff Holdings, in turn, currently owns 7 046 650 ELB shares, being
approximately 23% of ELB"s issued share capital. In fulfilment of the objective
mentioned above, Staff Holdings, via the Bateman trust, annually distributes the
dividends it receives from these ELB shares to various selected senior
executives as well as to the Bateman family.
It has now been agreed that, in the long term interests of ELB, the Bateman
trust / Staff Holdings structure should be collapsed and the interests of senior
executives of the group and the Bateman family should be separated. To this
end, a new trust known as the "ELB Participants Share Trust" (the "ELB trust")
has been established having the same essential objectives as Staff Holdings save
that it is exclusively for the benefit of employees of the group.
It is proposed that Staff Holdings will dispose of Staff Holding"s sole material
asset, namely 7 046 650 ELB shares, and then procure its windingup, whereupon
the Bateman trust will terminate. The surplus of the Bateman trust remaining
thereafter will be distributed to educational institutions in accordance with
the terms of its establishment.
Immediately after the specific issue is implemented. the ELB trust will acquire
from Staff Holdings the 3 000 000 specific issue shares plus and additional 2
586 355 of the ELB shares currently held by Staff Holdings (collectively the
"sale shares") for a total consideration of R19 719 833,15, being a price of
R3,53 per ELB share. The acquisition by the ELB trust of these ELB shares will
be funded by way of a loan from ELB. R15 000 000 of this loan will comprise the
funds received by ELB pursuant to the specific issue.
3. SPECIFIC ISSUE OF ELB SHARES FOR CASH
Subject to fulfilment of the conditions set out in 4 below, ELB will issue 3 000
000 new ELB shares for cash to Staff Holdings at a price of 500 cents per ELB
share in terms of a specific issue of shares for cash. The specific issue
requires the approval of at least 75% of the holders of ELB shares ("ELB
shareholders"), excluding any parties and their associates who participate in
the specific issue.
The issue price of 500 cents per ELB share represents a premium of 93 cents, or
22,9%, to the weighted average price of 407 cents at which ELB shares traded on
the JSE over the thirty business days prior to the date of this announcement.
The specific issue shares will comprise approximately 9% of ELB"s issued
ordinary share capital (after their issue).
The entire proceeds of the specific issue plus an additional R4 719 834 will be
lent by ELB to the ELB trust to enable it to acquire the ELB shares from Staff
Holdings.
4. CONDITIONS PRECEDENT
The above transactions are subject to fulfilment of, inter alia, the following
suspensive conditions
* the passing of the requisite resolutions by the requisite majority of ELB
shareholders at a general meeting of ELB shareholders to be convened for this
purpose;
* not less than six of the trustees and 75% of the participants of the Bateman
trust granting their written consent to the sale of the sale shares; and
* the JSE granting its approval of the terms of the ELB trust and the listing of
the specific issue shares.
5. RELATED PARTY AND VOTING
In terms of the Listings Requirements of the JSE, Staff Holdings is a "related
party" in that it is a "material shareholder" of ELB. The balance of the ELB
shares held by Staff Holdings which are not being sold to the ELB Trust, will be
sold to Virroxsam Investments (Proprietary) Limited ("Virroxsam") and Mr WGL
Bateman. Both Virroxsam and Mr WGL Bateman are related parties. Accordingly -
* the ELB shares held by Staff Holdings, Mr WGL Bateman and Virroxsam will not
vote at the general meeting of ELB to be convened to consider the specific
issue; and
* an independent expert will provide a fair and reasonable opinion on the
specific issue. This opinion will be included in the circular to ELB
shareholders referred to in 0 below.
6. PRO FORMA EFFECTS OF THE SPECIFIC ISSUE
The pro forma financial effects of the specific issue and the purchase by the
ELB trust, which are based on the reviewed financial statements of ELB for the
financial year ended 30 June 2003, are as follows -
Before the After the % change
"specific "specific
issue" and the issue" and
"purchase by the "purchase
the ELB trust by the ELB
of the sale trust of the
shares" sale shares"
1 Headline 93,7 96,4 2,9
earnings of
continuing
operations
before
translation
adjustment of
foreign
treasury
cash, per
share (cents)
(1, 2)
2 Earnings 12,3 7,5 (39,0)
(loss) per
share (cents)
(1, 2)
3 Headline (5,0) (11,4) (128.0)
earnings
(loss) per
share (cents)
(1, 2)
4 Tangible net 480 507 5,6
asset value
per share
(cents) (1,
3)
5 Net asset 498 526 5,6
value per
share (cents)
(1, 3)
6 Weighted 30 944 148 28 357 793 (8,4)
average
number of
shares in
issue for the
year (fully
diluted) (1)
7 Number of 30 860 000 28 273 645 (8,4)
shares in
issue at 30
June 2003 (1)
Notes:
1 For the purpose of determining earnings per share and net asset value per
share respectively after the purchase by the ELB trust of the sale shares, the
weighted average number of ELB shares in issue for the year on a fully diluted
basis and the number of ELB shares in issue at the year end will decrease by 5
586 355 ELB shares, being the ELB shares purchased by the ELB trust. These ELB
shares shall, for accounting purposes, be treated as treasury shares ("treasury
shares").
2 The earnings per share and the headline earnings per share after the
purchase by the ELB trust of the sale shares, are reduced by the dividend for
the year on the treasury shares, which is treated as an expense of R1 676 000
(being the dividend of 30 cents per share on 5 586 355 ELB shares).
3 The net asset value and tangible net asset value of the group will decrease
by a net amount of R4 720 000 after the completion of the acquisition by the ELB
trust of the sale shares. This results from an increase of R15 000 000 in the
net asset value and tangible net asset value of the group which is payable
pursuant to the specific issue and a reduction of R19 720 000, being the amount
of the loan made by ELB to the ELB trust for the purchase of the sale shares by
the ELB trust at R3,53 per share.
7. DOCUMENTATION AND GENERAL MEETING
A circular to ELB shareholders containing full details of the specific issue and
the adoption of the ELB trust and incorporating a notice of a general meeting of
ELB shareholders, will, subject to JSE approval, be posted to shareholders
within twentyeight days from the date of this announcement.
Hyde Park
3 October 2003
Attorneys Joint Sponsors
Werksmans Inc RMB Werksmans Sponsors
Date: 03/10/2003 05:37:06 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
