| Fri 31 Oct 2003, 16:28 | | Announcement Of A Mandatory Offer To Kumba"s Share |
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Anglo American plc - Announcement Of A Mandatory Offer To Kumba"s Shareholders
Not for release, publication or distribution in or into the United States or
Canada
Anglo American plc
(Incorporated in the United Kingdom)
(Registration number: 3564138)
(Share code: AGL)
(ISIN Code: GB0004901517)
("Anglo American")
ANNOUNCEMENT OF A MANDATORY OFFER TO KUMBA"S SHAREHOLDERS
INTRODUCTION
Shareholders of Kumba Resources Limited ("Kumba") are advised that Anglo
American, through its wholly owned South African subsidiary Anglo South Africa
Capital (Proprietary) Limited ("ASAC"), has acquired an additional 2 019 507
Kumba shares at a maximum price of 3 600 cents per share bringing Anglo
American"s total shareholding in Kumba to 103 986 980 shares. As a consequence
of Anglo American holding just over 35% of the issued share capital of Kumba, an
affected transaction has occurred in terms of the Securities Regulation Code on
Take-overs and Mergers and Rules of the Securities Regulation Panel.
Accordingly, Anglo American is required to extend a mandatory cash offer to
Kumba"s shareholders, other than Anglo American and its concert parties, to
acquire all of their shares in Kumba (the "offer shares") at a price of no less
than 3 600 cents per share. Kumba"s shareholders may accept the offer in whole
or in part. The offer will be made by ASAC.
BACKGROUND AND RATIONALE FOR THE OFFER
As a global mining and natural resources company, Anglo American has sought for
some time to strengthen its existing mining interests with a significant
investment in the iron ore sector. Anglo American has strong confidence in the
South African mining industry and therefore has decided to reinvest a
significant portion of the funds realised from the disposal of its non-core
South African investments in Kumba. Kumba, the fifth largest iron ore producer
in the world, has a high quality iron ore portfolio with an attractive growth
profile.
Anglo American intends to work together with Kumba to utilise the opportunity
presented by exceptionally strong growth in global demand for iron ore to bring
about a multi-billion Rand expansion of Kumba"s iron ore assets and supporting
infrastructure with a view to creating a world class iron ore operation with
economic scale to compete internationally. As part of this strategy Anglo
American will work together with all stakeholders to help unlock the significant
efficiencies between the Northern Cape iron ore mines, Orex (owner of the Sishen
Saldanha railway line) and the Saldanha Iron Ore Port.
To this effect Anglo American signed a Memorandum of Understanding ("MOU") with
the South African Government ("Government") on 17 December 2002 in terms of
which both parties agreed to co-operate to establish a Public Private
Partnership to ensure that the iron ore resources in the Northern Cape, together
with Orex and the Saldanha Iron Ore Port, are developed to their full potential.
The MOU affirms that Kumba will remain a South African company listed on the JSE
Securities Exchange South Africa ("JSE"). Anglo American has separately
committed to Government that it will not, at this time, increase its
shareholding in Kumba above 49%. With a shareholding of around 49%, Anglo
American will be an anchor shareholder for Kumba and will support Kumba"s growth
strategies.
Furthermore, as a leading participant in the formulation of the Broad Based
Socio-Economic Empowerment Charter (the Mining Charter), Anglo American supports
the introduction of meaningful and sustainable empowerment in Kumba. Anglo
American will encourage and support Kumba"s management to implement its current
and future empowerment initiatives.
TERMS OF THE OFFER
ASAC will offer, irrevocably and unconditionally, to acquire the offer shares on
the terms and conditions set out below.
The offer consideration
The offer will be for a cash consideration of 3 700 cents per Kumba share.
This represents a premium of approximately:
- 3% to the closing share price of 3 600 cents per Kumba share on 30 October
2003, being the last trading day immediately prior to this announcement; and
- 3% to the volume weighted average price per share over the 30 trading days
immediately prior to this announcement.
3.2 Confirmation of financial resources
Deutsche Securities (SA) (Proprietary) Limited has confirmed to the Securities
Regulation Panel ("SRP"), and to the SRP"s satisfaction, that ASAC has
sufficient resources to honour its commitments in terms of the offer.
FINANCIAL EFFECTS
Set out below, for illustrative purposes only, are the unaudited financial
effects of the offer for Kumba shareholders who accept the offer, based on the
audited results of Kumba for the year ended 30 June 2003:
Before the After the Percentage
offer (cents offer (cents change
per share) per share)
Market value 3 600(1) 3 700 3
Net asset value 1 657(2) 3 700 123
Net tangible asset 1 651(2) 3 700 124
value
Earnings 242(3) 207(4) (14)
Headline earnings 264(3) 207(4) (22)
Notes:
Being the closing share price on 30 October 2003, being the last trading day
immediately prior to this announcement.
Being Kumba"s reported net asset value per share and net tangible asset value
per share as at 30 June 2003.
Being Kumba"s reported earnings per share and headline earnings per share for
the 12 months ended 30 June 2003.
Based on the assumption that the offer consideration of 3 700 cents per share
was invested in a 365 day call account earning an average after-tax return of
5.6% during the 12 month period ended 30 June 2003.
No account has been taken of Capital Gains Tax in the calculation of the
financial effects of the offer on Kumba shareholders who accept the offer shown
in the table above.
SPECIAL ARRANGEMENTS
No arrangements, undertakings or agreements have been concluded between Anglo
American, ASAC, Kumba or any party acting in concert with any of them in
relation to the offer shares.
- No arrangements, undertakings or agreements (including any compensation
arrangements) which have any connection with, or dependence on the offer, exist
between Anglo American, ASAC, or any concert party and any director of Kumba or
any person who was a director of Kumba during the past 12 months prior to the
offer or any holder of Kumba shares or any person who was a holder of Kumba
shares within a period of 12 months prior to the offer.
OFFER DOCUMENT
An offer document setting out the full details of the offer will be posted as
soon as possible and in any event within 30 days from the date of this
announcement. A further announcement detailing the salient dates of the offer
will be published as soon as possible.
Johannesburg
31 October 2003
Financial adviser to Anglo American
Deutsche Securities (SA) (Pty) Limited
Attorneys to Anglo American
Webber Wentzel Bowens
Sponsor to Anglo American
Cazenove South Africa (Pty) Limited
Reporting accountants
Deloitte & Touche
The offer will not be made, directly or indirectly, in or into, or by use of the
mails of, or by any other means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce
of, or any facilities of a national securities exchange of, the United States or
Canada and, subject to certain exemptions, the offer is not capable of
acceptance by any such use, means, instrumentality or facility or from within
the United States or Canada. Accordingly, neither copies of this announcement
nor any related offer documentation are being or may be mailed or otherwise
distributed or sent in or into or from the United States or Canada.
In the United Kingdom this announcement is only intended for investment
professionals, high net worth companies, partnerships, associations or trusts
and investment personnel of any of the foregoing (each within the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2001) and any other
persons to whom it may be communicated lawfully. No other person in the United
Kingdom should act or rely on it. Persons distributing this announcement must
satisfy themselves that it is lawful to do so.
This announcement includes forward-looking statements relating to the offer and
Kumba, including those pertaining to the anticipated benefits to be realised
from the proposed offer. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of Kumba, or industries in which they operate, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.
Date: 31/10/2003 04:23:22 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
