| Thu 8 Apr 2004, 10:02 | | Announcement To Comparex Shareholder |
|
Announcement To Comparex Shareholders
COMPAREX HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1994/002506/06)
Share code: CPX ISIN: ZAE000016812
("Comparex")
ANNOUNCEMENT TO COMPAREX SHAREHOLDERS
1. Introduction
Comparex shareholders are referred to the interim results announcement
dated 23 February 2004 relating to, inter alia:
- the declaration of a dividend in anticipation of liquidation of 550 cents
per Comparex share ("the dividend in anticipation of liquidation");
- the recommendation of the board of directors of Comparex ("the Comparex
board") with respect to the restructuring of Comparex to eliminate
unnecessary consolidation layers, retaining only those entities required for
the future growth of the operations of Comparex; and
- the return to Comparex shareholders of any additional surplus cash.
Accordingly the Comparex board proposes that, subject to the conditions
precedent set out in paragraph 7 below:
- the 31 908 116 Comparex shares held by Comparex International (Pty)
Limited ("Comparex International") as treasury shares ("the Comparex
treasury shares") be repurchased and cancelled ("the specific repurchase");
- a final cash distribution of 100 cents per Comparex share be made to
Comparex shareholders by way of a capital reduction in terms of section 90
of the Companies Act (Act 61 of 1973) ("the Act") ("the final cash
distribution");
- a proposed members" voluntary winding-up of Comparex take place in terms
of sections 349 and 350 of the Act;
- a distribution of Comparex"s entire shareholding in Comparex Africa Group
Limited (which will be renamed Business Connexion Group Limited) ("CAG") be
made to Comparex shareholders by the liquidator of Comparex ("the
distribution in specie");
- the ordinary shares of Comparex be delisted from the JSE Securities
Exchange South Africa ("JSE");
- the ordinary shares of CAG be listed on the JSE;
- the Comparex Holdings Share Purchase Trust ("Comparex share trust") be
amended;
- the shareholders agreement entered into between CAG, Comparex Africa and
Business Connexion Investments (Pty) Limited ("BCI") be amended; and
- a new share trust be formed,
(collectively, "the proposed transactions").
2. The specific repurchase
Prior to the record date of the final cash distribution and the
distribution in specie set out in paragraph 8 below Comparex will repurchase
and cancel the Comparex treasury shares for a purchase consideration equal
to the market value of the Comparex treasury shares on the JSE at the close
on business on the day immediately preceding the specific repurchase.
The specific repurchase will reduce the number of Comparex shares in issue
from 294 545 028 shares to 262 636 912 shares.
No funding is required by Comparex for the specific repurchase as the
shares are currently held by Comparex International, a wholly-owned
subsidiary of Comparex. The specific repurchase will have no effect on the
earnings, headline earnings or net asset value per Comparex share, as these
shares were treated as treasury shares.
3. The final cash distribution
Comparex will distribute to Comparex shareholders 100 cents per Comparex
share by way of a reduction of the share premium account of Comparex by an
amount of R262 million.
4. The distribution in specie
The liquidator of Comparex has provided Comparex with an irrevocable
undertaking to distribute in specie the 262 636 912 ordinary shares which
Comparex holds in the share capital of CAG to Comparex shareholders, in the
ratio of one CAG share for each Comparex share held.
5. The amendment to the Comparex share trust and the formation of a new
share trust
Due to the dividend in anticipation of liquidation, the final cash
distribution and the distribution in specie it is necessary to amend the
current terms of the Comparex share trust to ensure that participants are
not prejudiced.
The Comparex share trust deed does not allow for the repricing of the
options granted in the event of capital and/or extraordinary distributions
("special distributions"). The effect of this is that in the event of a
special distribution, option holders will be required to pay the original
option price without taking into account the decrease in the underlying
value of the Comparex share as a result of the special distributions. In
addition, no allowance is made for a distribution in specie of any of the
assets of Comparex.
No further options will be issued by the Comparex share trust. The staff of
CAG and its subsidiaries will be incentivised by the formation of a new CAG
share trust.
6. The amendment to the shareholders" agreement
In terms of the shareholders" agreement entered into between CAG BCI on
7 November 2003, relating to their shareholding in Comparex Africa, BCI was
given certain minority protections resulting in BCI having the ability to
veto certain extraordinary transactions involving Comparex Africa,
("the Veto Right"). The JSE has requested, in terms of its General
Principles, that the Veto Right be amended in order to enable the JSE to
approve the listing of CAG.
7. Conditions precedent
Certain of the proposed transactions are subject to, inter alia, the
following conditions precedent:
7.1 the passing, at a general meeting of Comparex shareholders to be
convened for this purpose ("the general meeting"), of all the relevant
resolutions; and
7.2 the registration of the relevant special resolutions by the Registrar of
Companies.
8. Salient dates and times pertaining to the proposed transactions
2004
Circular and notice of the general meeting posted to Comparex
shareholders Thursday, 8 April
Last day to lodge forms of proxy for the general
meeting by 09:30 Wednesday, 28 April
General meeting to be held at 09:30 Friday, 30 April
Results of the general meeting announced
- on SENS Friday, 30 April
- in the press Monday, 3 May
The following are the anticipated dates of the proposed
transactions and are subject to change based on the date
the distribution in specie is finalised by the liquidator of
Comparex. An announcement setting out the finalised
dates and times will be published on SENS and in the press.
Last day to trade on the JSE to be eligible to receive the
final cash distribution and the distribution in
specie Friday, 21 May
CAG shares listed from the commencement of business on the
JSE in the "Information Technology - Software & Computer
Services" sector of the JSE lists Monday, 24 May
Comparex shares suspended on the JSE from the commencement
of business Monday, 24 May
Record date to be eligible to receive the final cash
distribution and the distribution in specie Friday, 28 May
CAG share certificates will be posted by registered post
to certificated Comparex shareholders or credited to
their safe custody accounts at their Central Securities
Depository Participant or broker in the case
of dematerialised Comparex shareholders Monday, 31 May
Final cash distribution paid to Comparex shareholders Monday, 31 May
Comparex shares delisted from the JSE from the commencement
of business Tuesday, 1 June
Subject to the anticipated dates set out above Comparex share certificates
may not be dematerialised or rematerialised after Friday, 21 May 2004.
9. Pro forma financial effects of the proposed transactions
Upon implementation of the proposed transactions Comparex shareholders will
hold a CAG share for each Comparex share that they held prior to
implementation of the distribution in specie, and cash of 650 cents per
Comparex share received by way of the dividend in anticipation of
liquidation and the final cash distribution.
The table below sets out, for illustrative purposes only, the pro forma
financial effects of the proposed transactions, based on the assumptions
detailed herein and the published interim results of Comparex for the six
months ended 30 November 2003:
Interest/
Published CAG Cash Total Increase/
Before After After After (Decrease)
Per Comparex share (cents) (cents) (cents) (cents) (%)
Headline earnings 44.2 19.6 24.6 44.2 -
Earnings 44.6 20.0 24.6 44.6 -
Net asset value 900.8 250.8 650.0 900.8 -
- Dividend in anticipation
of liquidation 550.0
- Final cash distribution 100.0
Number of shares in issue ("000) 294 545 262 637
Weighted average number
of shares in issue ("000)(1) 262 637 262 637
Note:
1. The weighted average number of shares in issue excludes the Comparex
treasury shares.
The "Total After" column assumes that:
- the proposed transactions and the dividend in anticipation of liquidation
had taken place on 1 June 2003;
- an average interest rate of 10.8% per annum before tax (7.6% after tax)
was earned by a Comparex shareholder on the cash received from the dividend
in anticipation of liquidation and the proposed final cash distribution,
which rate was equal to the average interest rate earned by Comparex during
the corresponding period;
- the Comparex treasury shares had been cancelled on 1 June 2003;
- the proposed transactions and the dividend in anticipation of liquidation
had been implemented on 30 November 2003 for the pro forma net asset value
calculations.
Save as set out above, no effect of taxes has been taken into account in
the calculation of the unaudited pro forma financial effects of the proposed
transactions.
10. The rebranding
In order to reflect the new profile of the Comparex Group after the merger
of Comparex Africa with Business Connexion which was announced on 7 November
2003, the operations of Comparex will be rebranded "Business Connexion" and
accordingly the name of Comparex Africa Group Limited will be changed to
Business Connexion Group Limited with effect from 28 April 2004. The
subsidiaries of CAG will be renamed accordingly.
11. Circular to Comparex shareholders
A circular, setting out full details of the proposed transactions, will be
posted to shareholders today, 8 April 2004.
Midrand
8 April 2004
Investment bank and lead transactional sponsor
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Attorneys
CLIFFE DEKKER
Sponsor to Comparex
Rand Merchant Bank
Corporate Finance
A Division of FirstRand Bank Limited
Reporting accountants
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Tax advisors to Comparex
Deloitte & Touche
Corporate Finance Division
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Date: 08/04/2004 09:53:57 AM Produced by the JSE SENS Department
