| Thu 6 Nov 2003, 9:10 | | FNB Corporate led bank consortium to sell McCarthy |
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FNB Corporate led bank consortium to sell McCarthy stake to Bidvest
BIDVEST GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06)
Share code: BVT ISIN: ZAE 000008132
("Bidvest")
The FNB Corporate led bank consortium has agreed to sell its interest
in McCarthy Limited to Bidvest for R867 million. The total value of the
transaction is R947 million.
The sale is subject to the completion of a due diligence investigation
by Bidvest within the next fifteen days, as well as to the approval of
all the automotive manufacturers and licensors represented by McCarthy,
the Securities Regulation Panel, the Competition Commission and other
regulatory authorities. The transaction will take effect as soon as
these approvals have been received, and payment will be made on
implementation of the transaction or on 28 February next year,
whichever is the later date.
The sale places a value of 33 cents a share on the ordinary and
preference shares that will change hands. The FNB Corporate led
consortium, which includes ABN AMBRO, Absa, Nedbank, Investec, Societe
Generale and Standard Bank, acquired its interest in 2001, when it
became necessary to recapitalise the diversified retail group.
Bidvest Chairman Brian Joffe said the acquisition of McCarthy would
give his group a substantial share of the automotive retailing and
services market in South Africa.
"McCarthy is one of South Africa"s oldest, largest and most respected
automotive retailers. It has a solid management team who know their
business well and it distributes a wide range of the most well-known
brands in cars and commercial vehicles," he noted.
"I am confident that McCarthy will fit in well with our corporate
vision for Bidvest and that many synergies will unfold in due course
between it and our other businesses," said Joffe.
He said a typical example of such synergy was the introduction of a
black empowerment partner to McCarthy. "Bidvest"s anticipated
appointment of Dinatla as an empowerment partner should provide an
appropriate solution to McCarthy"s search for such a partner."
FNB Corporate CEO Dr Theunie Lategan said the consortium had always
viewed its share holding in McCarthy as a temporary one. "Since the
recapitalisation, McCarthy management have done a sterling job of
refocusing the group on its core motor business and returning it to
profitability. With trading conditions in the motor industry looking
increasingly optimistic, it was opportune to sell our interest now."
Dr Lategan said the successful restructuring and re-capitalisation of
McCarthy"s was an excellent example of how responsible action by the
banking community, could help to return a large business the size of
McCarthy to financial health and in so doing restore shareholder value.
He said Bidvest"s financial strength and innovative BEE initiative
helped to make it the most compelling offer received by the consortium.
McCarthy CEO Brandt Pretorius said that management would welcome having
Bidvest as its shareholder: "We are excited about the possibility of
becoming part of one of South Africa"s leading companies and are
confident that McCarthy will derive significant strategic and business
benefits from this new development."
The FNB Corporate led consortium has agreed to indemnify Bidvest
against any loss or claim against McCarthy resulting from the
liquidation of the Retail Apparel Group (RAG). At the same time,
Bidvest has agreed to pay to the consortium up to the first R10 million
arising from the additional proceeds of the liquidation, and the
balance, if any, to McCarthy ordinary and preference shareholders in
proportion to their shareholdings, via an increase to the sale price
per ordinary and preference share.
The consortium has agreed to support the implementation of the sale,
either by way of a scheme of arrangement in terms of Section 311, or by
means of an offer in terms of Section 440K of the Companies Act.
