| Fri 19 Dec 2003, 17:13 | | Proposed acquisition by Afgri |
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AFGRI LIMITED - Proposed acquisition by Afgri
AFGRI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/004030/06)
ISIN: ZAE000040549
Share code: AFR
Proposed acquisition by Afgri of all the members" interests in Natalagri (being
all the shares in and members" funds of Natalagri not held by Afgri and Laeveld
Korporatiewe Beleggings Beperk ("Laeveld"))
1. INTRODUCTION
The board of directors of Afgri wish to update the Natalagri members on the
status of its proposed acquisition of all the members" interests in Natalagri
(being all the shares in and members" funds of Natalagri not held by Afgri and
Laeveld) which was accepted by the Natalagri Board on 29 October 2003 and full
details of which were disclosed in a joint public announcement made by Afgri and
Natalagri on 4 November 2003 ("the Afgri Offer").
2. DUE DILIGENCE
A detailed due diligence investigation of Natalagri was completed by Afgri on 5
December 2003 with the assistance of PricewaterhouseCoopers. This investigation
concluded that the net asset value ("NAV") of Natalagri is well below the NAV as
published in the financial statements of Natalagri for the year ended 28
February 2003. The adjustments to the NAV, as a result of the due diligence
investigation, have resulted in a NAV below R30 million.
Afgri and its advisors are therefore of the opinion that its proposed purchase
consideration of approximately R 30,72 million exceeds the adjusted NAV of the
business and is also 8% higher than the entire members" interest in Natalagri.
3. AFGRI BOARD DECISION
Notwithstanding the outcome of the due diligence investigation, the Acquisition
Committee of the Afgri Board has decided to proceed with the acquisition on the
basis previously disclosed in the Afgri Offer. A formal notice was sent to the
Natalagri Board on 15 December 2003 informing the Board that Afgri is proceeding
with the Afgri Offer. This decision was taken by the Afgri Board on the basis
that Natalagri, as a subsidiary of Afgri, will have sufficient opportunities to
earn the required returns on funds invested and to offer its clients improved
levels of products and services.
4. LEAVE TO CONVENE NATALAGRI SCHEME MEETINGS
On 12 December 2003, the High Court of South Africa (Natal Provincial Division)
("the High Court") granted an order for leave to convene a series of scheme
meetings ("the Scheme Meetings") as contemplated in section 169A of the Co-
operatives Act, 1981 and in a draft circular to the members of Natalagri, that
was submitted to the High Court and which is expected to be posted to all
Natalagri members on 12 January 2004. The Scheme Meetings will be held from
17 - 20 February 2004 at different venues throughout Natalagri"s area of
operation.
5. THE FOURTH OFFER TO BE MADE BY VRYSTAAT KOoPERASIE BEPERK ("VKB") TO
NATALAGRI MEMBERS
The offer made by VKB, dated Monday 15 December 2003 and published in the press
on Wednesday, 17 December 2003 ("the VKB Offer") was made in response to the
Afgri Offer. The Afgri Offer was preferred by the Natalagri Board and its
independent advisors, Quaestor Capital over two competing bids, including the
third VKB offer.
Afgri intends to circulate to all Natalagri members a comparative analysis of
the two offers by mid January 2004. At this stage, Afgri points out to Natalagri
members that the VKB Offer is conditional on the completion of a due diligence
investigation to the satisfaction of VKB. VKB has reserved its right to withdraw
the offer if this condition is not met. Since the High Court has granted leave
to convene the Scheme Meetings and the Natalagri Board is contractually bound to
implement the Afgri Offer, such a due diligence investigation is unlikely to
occur until the Natalagri Scheme Meetings have been concluded. Due to the
uncertainty surrounding the VKB Offer, Natalagri members are requested to
exercise extreme caution in dealing with any formal offer that may be made to
them in the interim by VKB.
6. FURTHER DETAILS OF THE AFGRI OFFER
Afgri intends to acquire all of the shares in and members" funds of Natalagri,
other than the shares and funds held by Afgri and its subsidiary Laeveld.
Following implementation of the offer, all the shares in and members" funds of
Natalagri will be held by Afgri and Laeveld.
On implementation of the scheme, Natalagri members will receive payment of all
their members" funds in cash and Afgri, through Natalagri, will assume full
responsibility for all remaining liabilities of Natalagri. Once the Scheme has
been approved by the two-thirds majority prescribed by the Act, sanctioned by
the High Court and approved by the Competition Commission and Tribunal , the
scheme consideration will be paid in cash without delay. The operative date for
payment is expected to be Monday, 5 April 2004.
7. COMMUNICATION WITH NATALAGRI SHAREHOLDERS
Should Natalagri members require further information, they are invited to
contact Anton Visagie at (012) 460 3000 or 083 642 7316. The members of
Natalagri will be advised of any further developments and any change in any of
the indicative dates.
AFGRI OPERATIONS LTD 19 December 2003
Date: 19/12/2003 05:08:03 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
