| Tue 21 Sep 2004, 17:39 | | JIGSAW HOLDINGS LIMITED - ANNOUNCEMENT |
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JIGSAW HOLDINGS LIMITED - ANNOUNCEMENT
JIGSAW HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Share code: JGS ISIN: ZAE000018370)
(Registration number 1987/000111/06)
(`Jigsaw` or the `company`)
REVESCO HOLDINGS (PROPRIETARY) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/013860/07)
(`Revesco`)
Announcement relating to:
* a proposed offer by Revesco to the shareholders of Jigsaw; and
* the subsequent delisting of Jigsaw.
1. INTRODUCTION
Further to the cautionary announcement dated 31 August 2004, it is hereby
announced that Revesco will make an offer to acquire all of the issued ordinary
shares in Jigsaw (`Jigsaw shares`) not already held by it or by Absa Bank
Limited (`Absa`), the Jigsaw Employee Share Incentive Scheme and the Jigsaw
Franchise Network Share Option Scheme (`excluded shareholders`). Revesco and
Absa currently own 37.3% and 25.1%, respectively, of the issued Jigsaw shares,
and the Jigsaw Employee Share Incentive Scheme and the Jigsaw Franchise Network
Share Option Scheme currently own 5.8% and 2.8%, respectively, of the issued
Jigsaw shares (`excluded shares`). No offer shall be made in respect of the
excluded shares.
2. RATIONALE FOR THE PROPOSAL
The board of directors of Jigsaw (`board`) is of the opinion that the
significant levels of debt of the company, the negative sentiment towards
companies with a small market capitalisation and the limited liquidity of the
Jigsaw shares, will preclude any rapid recovery of the price at which the Jigsaw
shares trade on the JSE Securities Exchange South Africa (`JSE`).
As a result of the above, Jigsaw is negatively affected in the following
manner:
* a lack of significant institutional and analyst interest;
* an inability to raise capital through the issue of further Jigsaw shares at
what is considered a fair value and, accordingly, to fund future expansion and
repay debt; and
* management time and expenses related to being listed on the JSE.
3. SALIENT FEATURES OF THE PROPOSAL
3.1 Mechanics of the proposal
Revesco will propose a scheme of arrangement (`scheme`) in terms of section
311 of the Companies Act, 1973 (Act 61 of 1973), as amended (`Act`), between
Jigsaw and its shareholders (`Jigsaw shareholders`), other than the excluded
shareholders (`minority shareholders`), to acquire all of their Jigsaw shares
(`proposal shares`). Should the scheme for any reason not become operative, an
offer in terms of section 440 of the Act will be deemed to be made to the
minority shareholders to acquire their proposal shares at the same consideration
as specified in terms of the scheme (`offer` and together with the scheme,
`proposal`). The offer will not be conditional on acceptance thereof by minority
shareholders holding a specified percentage of the proposal shares.
3.2 The delisting of Jigsaw
Should the scheme not become operative, Jigsaw will request that Jigsaw
shareholders nevertheless vote in favour of the delisting of Jigsaw shares from
the JSE in terms of paragraphs 1.13 to 1.15 of the Listings Requirements of the
JSE. Voting on the resolution for the delisting will take place at the annual
general meeting (`AGM`) which will be held immediately preceeding the meeting at
which minority shareholders will be asked to consider and vote on the scheme
(`scheme meeting`) (see notes on the AGM in paragraph 10 below).
3.3 The proposal consideration
Revesco will offer minority shareholders 40 cents per proposal share payable
in cash (`proposal consideration`). The total proposal consideration to be
received by minority shareholders will approximate R4.7 million.
3.4 Pro forma financial effects
* The table below provides the pro forma financial effects of the proposal on
the earnings and tangible net asset value per Jigsaw share and is based on the
assumptions set out below:
Before the After the Percentage
proposal proposal change
Earnings per share (cents) 1.9(1) 2.1(3) 7.7
Headline earnings
per share (cents) 6.1(1) 2.1(3) (65.6)
Tangible net asset
value per share (cents) (64.6)(1) 40.0(4)
Market value per share (cents) 24.0(2) 40.0(4) 66.67
Notes:
(1) based on Jigsaw`s audited financial statements for the 12 months ended 29
February 2004 and the weighted average number of shares in issue as at 29
February 2004 of 37 175 316;
(2) the closing price of Jigsaw shares on the JSE on 30 August 2004, the day
before the cautionary announcement was published;
(3) the earnings attributable to a minority shareholder on the cash received in
terms of the proposal consideration, assuming that the cash had been invested
for the full 12-month period ended 29 February 2004 and earned an after-tax
monthly compounded return of 5%; and
(4) the proposal consideration of 40,0 cents per proposal share to be paid to
minority shareholders in terms of the proposal.
* The table below sets out the comparative effects on Jigsaw shareholders who
accept the offer:
Comparison
Comparative value Offer price Percentage
of Jigsaw per Jigsaw of offer in
shares share each premium
(cents) (cents) scenario
1. 19 40 111
2. 20 40 100
1. The weighted average trading price of Jigsaw shares for the last 90 trading
days up to 15 September 2004.
2. The closing price of Jigsaw shares on the JSE on 15 September 2004.
4. CONDITIONS PRECEDENT
The proposal will be subject to the fulfilment of various conditions
precedent, including:
4.1 receipt of the requisite approvals from the JSE, the South African Reserve
Bank and the Securities Regulation Panel (`SRP`);
4.2 in respect of the scheme, the approval of the scheme by a majority
representing not less than 75% of the votes exercisable by the minority
shareholders present and voting, either in person or by proxy, at the scheme
meeting; and
4.3 in the event of the scheme being approved in accordance with the
aforegoing, the High Court of South Africa sanctioning the scheme and a
certified copy of the Order of Court sanctioning the scheme being registered by
the Registrar of Companies.
5. IRREVOCABLE UNDERTAKINGS
Minority shareholders holding 61.7% of the proposal shares have given
irrevocable undertakings to vote in favour of the scheme or to accept the offer,
as the case may be.
6. OPINIONS
The board has considered the terms and conditions of the proposal and is of
the opinion that they are fair and reasonable to the minority shareholders.
In accordance with the rules of the SRP, the board has appointed BDO QuestCo
(Proprietary) Limited as the independent advisor to advise minority shareholders
on the fairness and reasonableness of the terms and conditions of the proposal
and delisting of Jigsaw. The opinion of the independent advisor will be included
in the circular to be posted to Jigsaw shareholders in due course and referred
to in paragraph 9 below.
7. CONFIRMATION TO THE SRP
The SRP has received confirmation from ABSA that Revesco has sufficient
resources to satisfy the proposal consideration.
8. LISTING ON THE JSE
In the event that the scheme or the offer, as the case may be, is successful,
application will be made to the JSE for the immediate suspension and subsequent
termination of the listing of Jigsaw shares on the JSE.
9. DOCUMENTATION AND FURTHER ANNOUNCEMENT
A circular, containing full details of the proposal, which is subject to the
approvals of the JSE and the SRP, is currently in the process of being prepared
and will be posted to Jigsaw shareholders as soon as possible (`circular`). A
further announcement setting out, inter alia, the salient dates of the proposal
will be published in due course.
10. NOTICE OF ANNUAL GENERAL MEETING
Jigsaw shareholders had previously been advised that the AGM had been
scheduled for 18 October 2004. Jigsaw shareholders are hereby advised that the
AGM will be rescheduled to take place on the same day as the scheme meeting and
will accordingly be notified of this date in the circular.
Johannesburg
22 September 2004
Sponsor to Jigsaw
Exchange sponsors
Independent advisor
to the minority shareholders
BDO Questco (Pty) Ltd
Attorneys to the scheme
Cliffe Dekker
Transaction advisors
Base Capital
Date: 21/09/2004 05:27:20 PM
Produced by the JSE SENS Department
