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CCN HOLDINGS LIMITED - ANNOUNCEMENT
CCN HOLDINGS LIMITED
(Incorporated In the Republic of South Africa)
(Registration number 1998/006000/06)
Share code: CCN ISIN: ZAE000046819
("CCN" or "the Company"))
* PROPOSED VOLUNTARY TERMINATION OF CCN"S LISTING ON THE JSE SECURITIES EXCHANGE
SOUTH AFRICA ("JSE")
* OFFER TO REPURCHASE ALL OF THE CCN ORDINARY SHARES IN ISSUE OTHER THAN THOSE
HELD BY THE CONTROLLING SHAREHOLDERS OF CCN
1 INTRODUCTION
LPC Manhattan Sponsors (Pty) Limited is authorised to announce that the board of
directors of CCN ("the directors") have resolved, subject to the fulfilment of
the conditions precedent set out in paragraph 5 below, to offer to repurchase
all of CCN"s shares in issue, other than the ordinary shares currently held or
controlled by the executive directors and the pool consortium ("the controlling
shareholders") ("the offer shares"), for a cash consideration of 115 cents per
share ("the offer") and to subsequently terminate the listing of the company on
the JSE.
The controlling shareholders, who currently control approximately 87% of the
issued share capital, have agreed to waive their rights to participate in the
offer.
2. RATIONALE FOR THE OFFER
CCN does not comply with the spread requirements of a JSE main board listing,
which requires that there be 500 public shareholders and a minimum of 20% of the
issued share capital to be held in public hands. The board feels that it is
unlikely that it will meet this JSE requirement in the foreseeable future.
Furthermore, the board is of the opinion that management time related to the
continued listing of CCN on the JSE is not justifiable. The offer will:
allow the shareholders to dispose of their offer shares at a premium to the
respective market prices (as set out in paragraph 4 below)
result in the suspension and subsequent termination of the listing of CCN on the
JSE.
3. SALIENT FEATURES OF THE OFFER
3.1 Mechanics of the offer
CCN will make an offer to the offer shareholders to acquire the offer shares for
a cash consideration of 115 cents per share. The offer will be implemented by
way of a repurchase by CCN of the offer shares.
3.2 Pro forma financial effects of the offer on an offer shareholder who accepts
the offer
Before After Percentag
acceptanc acceptanc e change
e of the e of the if the
offer offer offer is
accepted
(%)
Note (cents) (cents)
s
Market value per 1 88 115 30.7
share (cents)
Market value per 2 99 115 16.2
share (cents)
Net tangible asset 3 112 115 2.7
value per share
(cents)
Net tangible asset 4 125.1 115 (8.4)
value per share
(cents)
Earnings per share 5 6.02 4.3 (27.3)
(cents)
Notes:
1. Based on the weighted average price of CCN shares for the 60 trading days
up to and including 16 March 2004, being the last full trading day before the
cautionary announcement was published in the press.
2. Based on the closing price of CCN shares on 15 March 2004, being the
trading day prior to the publication of the cautionary announcement on SENS.
3. Based on the net asset value and net tangible asset value of a CCN share as
at 31 October 2003.
4. Based on the net asset value and net tangible asset value of a CCN share as
at 31 October 2003 after the specific repurchase and the voluntary offer
contemplated in the circular dated 17 November 2003 ("the November circular").
5. Based on earnings and headline earnings per share after giving effect to
the repurchases contemplated in the November circular , assuming interest
foregone at 13.7% before and after taxation for the 6 months ended 31 October
2003 and comparing it with an after tax return of 7.5% for 6 months ended 31
October 2003 on the proceeds of 115 cents per share.
3.3 Pro forma financial effects of the share repurchase on CCN
Before After Effect % Effect %
Column Repurch on CCN change on CCN change
1 ases Assumi (Colum Assumi (Colum
(Note contemp ng 50% ns ng ns
1) lated accept 3 and 100% 4 and
in the ance 2) accept 2)
Novembe of the ance
r delist of the
circula ing delist
r offer ing
Column offer
2 Column
(Note, 3 Column
2) (Note 4
3) (Note
4)
Earnings per share 5.96 6.02 5.93 (1.5) 5.84 (3.1)
and headline
earnings per share
(cents)
Net asset and net 112.0 125.1 125.6 0.4 126.1 0.8
tangible asset
value per share
(cents)
Weighted average
number of shares in 69 737 46 612 44 489 42 365
issue (`000)
Closing number of
shares in issue 69 712 46 586 44 464 42 340
(`000)
Notes:
1. The earnings per share, headline earnings per share, net asset value per
share and net tangible asset value per share are based on the CCN interim
results for the six months ending 31 October 2003.
2. Column 2 has been calculated on the basis that the repurchases contemplated
in the November circular have been implemented and interest of 13.7% before and
after taxation was foregone for a period of 6 months from 1 May 2003 to 31
October 2003 and net asset and net tangible value per share was computed on the
basis that the repurchases were effected at 31 October 2003.
3. Assumes that 50% of minority shareholders (equating to a total of 2 123
073 shares) accept the delisting offer and that the effect on earnings is based
on interest of 13.7% before and after taxation foregone for a period of 6 months
assuming the repurchase in terms of the delisting offer took place on 1 May
2003. The effect on net asset and net tangible asset value assumes that the
repurchase in terms of the delisting offer took place on 31 October 2003.
4. Assumes that 100% of minority shareholders (equating to a total of 4 246
146 shares) accept the delisting offer. The other assumptions for Note 3 are
also applicable to this note.
4. IRREVOCABLE UNDERTAKING
Offer shareholders holding approximately 48% of the offer shares have furnished
the following irrevocable undertakings:
to vote in favour of the special and ordinary resolutions to be proposed at the
general meeting for the purpose of the offer and the termination of the listing
of CCN on the JSE; and
to accept the offer.
5. CONFIRMATION TO THE SECURITIES REGULATION PANEL ("the SRP")
The Securities Regulation Panel has received written confirmation from CCN"s
bankers that CCN has sufficient resources to satisfy the offer consideration of
R4 883 068 should the offer be accepted in its entirety.
6. CONDITIONS PRECEDENT
The offer is conditional, inter alia, on the following conditions precedent:
* shareholder approval in general meeting of the requisite resolutions required
to effect the share repurchase and the termination of the listing of CCN on the
JSE; and
* the requisite approvals of the JSE, the SRP and the South African Reserve
Bank.
7. OPINIONS AND RECOMMENDATIONS
The board is of the opinion that the offer is fair and reasonable to
shareholders. They recommend that shareholders vote in favour of the requisite
resolutions to be proposed at the general meeting.
Fisher Hoffman PKF (Jhb) Inc has been appointed by the board as independent
advisors to consider the terms and conditions of the offer and to advise offer
shareholders as to whether the offer is fair and reasonable, and their opinion
will be included in the circular to shareholders to be posted on or around 19
April 2004.
8. DOCUMENTATION
A salient dates announcement will be published in the press and a circular which
is subject to the approval of the JSE and SRP, will be mailed to the offer
shareholders on or about 19 April 2004.
Sandton
2 April 2004
Sponsor Reporting Accountants and Independent Advisor
LPC MANHATTAN Fisher Hoffman PKF (Jhb) Inc.
Date: 02/04/2004 08:13:16 AM Produced by the JSE SENS Department
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