| Wed 22 Sep 2004, 16:52 | | COMPANY ANNOUNCEMENT |
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SABMILLER PLC/AMALGAMATED BEVERAGE INDUSTRIES LIMITED - COMPANY ANNOUNCEMENT
SABMILLER PLC
(Incorporated in England and Wales)
(Registration number 3528416)
Share code: SAB
ISIN: GB0004835483
(`SABMiller`)
AMALGAMATED BEVERAGE INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1970/006820/06)
Share code: ABI
ISIN: ZAE000000048
(`ABI`)
Not for release, publication or distribution, in whole or in part, in, into
or from the United States, Canada, Australia or Japan
Firm intention by SABMiller to make an offer to acquire the entire issued
share capital of ABI that it does not already own.
1. Introduction
Further to the announcements dated 21 July 2004 and 2 September 2004,
shareholders of SABMiller and ABI are advised that SABMiller, through its
wholly owned subsidiary, Other Beverage Interests (Proprietary) Limited
(`OBI`), has submitted a firm intention letter to the board of directors of
ABI (`ABI Board`) to make an offer (`the Offer`) to acquire the entire
issued share capital of ABI, other than those held by ABI Holding Company
(Proprietary) Limited (`ABI Holdco`) for a cash consideration of 9100 cents
per ABI share (`proposed acquisition`).
The proposed acquisition will be implemented by way of a scheme of
arrangement (`the scheme`) in terms of section 311 of the Companies Act,
1973 (Act 61 of 1973), as amended (`the Act`), to be proposed by OBI between
ABI and its shareholders, other than ABI Holdco (`scheme members`).
2. Rationale for the proposed acquisition
SABMiller currently indirectly (through ABI Holdco) owns 73.5% of ABI and
wishes to acquire the remaining 26.5% ABI minority shares.
SABMiller has, in recent years, focused on its core brewing and beverage
businesses, both locally and abroad, having disposed of the majority of its
non-core businesses. The recent disposal of SABMiller`s entire remaining
interest in Edgars Consolidated Stores Limited is consistent with this
strategy.
SABMiller has also, in recent years, expanded its Coca-Cola bottling
franchises elsewhere in the world and now has bottling facilities in Central
America and in Africa (other than South Africa). The proposed acquisition is
consistent with SABMiller`s strategy of focusing on its core brewing and
beverage business, and affords SABMiller the opportunity to simplify and
consolidate the holding structure of its South African interests. Subject to
legislative and contractual restrictions, the proposed acquisition will
furthermore afford SABMiller the opportunity to investigate possible areas
of synergy.
The implementation of the proposed acquisition will have the additional
benefit of removing two areas of potential conflict of interest that arise
from ABI`s current shareholding structure. Firstly, ABI, as a subsidiary of
SABMiller, is constrained from investing in opportunities outside of South
Africa. Secondly, ABI, as a subsidiary of SABMiller, is subject to certain
SABMiller group borrowing restrictions, which, though a normal feature of
international borrowing agreements and credit ratings, constrain ABI in
optimising its capital structure.
The cash consideration to be received by ABI shareholders represents a
premium of:
- 32.1% to the closing price of R68.90 of ABI shares on the JSE Securities
Exchange South Africa (`JSE`), on Tuesday, 20 July 2004, the last trading
date before the publication of the cautionary announcement referred to in 1
above; and
- 33.9% to the closing price of R67.98 of ABI shares based on a 30-day
volume weighted average trading price for the period preceding Wednesday, 21
July 2004.
The scheme therefore offers the scheme participants an opportunity to
realise the value of their ABI shareholdings at a substantial premium.
3. Opinions and recommendations
An independent committee appointed by the ABI board (`the Independent
Committee`) has reviewed the terms and conditions of the scheme. The
Standard Bank of South Africa Limited, which was appointed by ABI as its
investment bank and independent adviser, has advised the Independent
Committee and the directors of ABI that it is of the opinion that the terms
and conditions of the scheme are fair and reasonable. The Independent
Committee is of the opinion that the terms and conditions of the scheme are
fair and reasonable to shareholders. Based on the Independent Committee`s
recommendation, the board of directors of ABI (excluding Messrs EAG Mackay
and MI Wyman who are also directors of SABMiller and OBI and Mr MJ Bowman
who is an employee of SABMiller, who have accordingly recused themselves
from voting) is of the opinion that the terms and conditions of the scheme
are fair and reasonable to the shareholders and unanimously recommends that
shareholders vote in favour of the scheme.
4. Pro forma financial effects
The table below sets out the illustrative pro forma financial effects of the
scheme on ABI shareholders assuming that the scheme had been concluded for
income statement purposes from 1 April 2003 and for balance sheet purposes
at 31 March 2004.
The pro forma financial effects have been prepared for illustrative purposes
only to provide information about how the scheme might have affected the
financial information presented and, because of their nature, may not give a
true reflection of the financial effects of the scheme:
Before After the % change
the scheme(ce
scheme(ce nts per
nts per share)
share)
Market value per share and cash 6890 9100 32.08
received 1
30-day volume weighted average 6798 9100 33.86
market value per share and cash
received 2
Earnings per share 3 450 614 36.44
Headline earnings per share 3 507 614 21.10
Dividend per share 4 280 614 119.29
Net asset value per share and cash 2364 9100 284.94
received 5
Net tangible asset value per share 1639 9100 455.22
and cash received 5
Notes:
1 The `Before the scheme` column reflects the closing JSE market value per
ABI share on Tuesday, 20 July 2004, being the day immediately preceding
publication of ABI`s first cautionary announcement. The `After the scheme`
column shows the consideration to be received per ABI share.
2 The `Before the scheme` column reflects the 30-day volume weighted average
JSE market value per ABI share calculated for the 30 days preceding
Wednesday, 21 July 2004, being the day of publication of ABI`s first
cautionary announcement. The `After the scheme` column shows the
consideration to be received per ABI share.
3 The `Before the scheme` column reflects the audited earnings and headline
earnings per share for the year ended 31 March 2004. The `After the scheme`
column shows the after tax interest income that an ABI shareholder would
have earned had the consideration to be received per ABI share been invested
at an after-tax 12 month fixed deposit compounded interest rate of 6.75% per
annum on 1 April 2003 for a period of 12 months.
4 The `Before the scheme` column reflects the dividend distributed per share
for the year ended 31 March 2004. The `After the scheme` column shows the
after tax interest income that an ABI shareholder would have earned had the
consideration to be received per ABI share been invested at an after-tax 12-
month fixed deposit compounded interest rate of 6.75% per annum on 1 April
2003 for a period of 12 months.
5 The `Before the scheme` column reflects the audited net asset value and
net tangible asset value per share at 31 March 2004. The `After the scheme`
column shows the consideration to be received per ABI share.
6 The possible application of Capital Gains Tax has not been taken into
account in the calculations above.
5. Conditions precedent to the Offer
The Offer is subject to the fulfilment of the following conditions
precedent:
- the approval of the scheme by all regulatory authorities if and to the
extent necessary, including the South African Reserve Bank, the Securities
Regulation Panel (`SRP`) and the JSE;
- the approval of the scheme by a majority representing not less than three
fourths of the votes exercisable by scheme members present and voting either
in person or by proxy at a meeting of scheme members;
- the High Court of South Africa sanctioning the scheme in terms of the Act;
and
- a certified copy of the Order of Court sanctioning the scheme being
registered by the Registrar of Companies in terms of the Act.
SABMiller reserves the right to implement the Offer by other appropriate
means should any of the conditions precedent not be met.
6. SRP confirmation
The SRP has been given appropriate confirmation (in terms of its
requirements) that OBI will have sufficient cash resources available to meet
its obligations in terms of the Offer.
7. Further announcement and documentation
It is currently anticipated that on or about 14 October 2004:
- a further announcement setting out the detailed terms, salient dates and
times of the scheme will be made to ABI shareholders; and
- a circular containing the final terms of the proposed acquisition will be
posted to the shareholders of ABI.
The proposed acquisition is anticipated to be completed by mid December
2004.
Johannesburg
22 September 2004
Investment bank to OBI and SABMiller
Nedbank Capital, a division of Nedbank Limited
Sponsor to ABI and SABMiller
Cazenove South Africa (Proprietary) Limited
Attorneys to OBI and SABMiller
Werksmans Incorporated Barkers Attorneys
Tax advisers to the transaction
Webber Wentzel Bowens
Investment bank and independent adviser to ABI
The Standard Bank of South Africa Limited
Legal advisers to ABI
Routledge-Modise
Reporting accountants to ABI
Ernst and Young
This announcement does not constitute an offer to sell or issue, or the
solicitation of an offer to purchase or subscribe for, any shares or other
securities or a solicitation of any vote or approval in any jurisdiction in
which such offer or solicitation would be unlawful.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in any such
jurisdictions into which this announcement is released, published or
distributed should inform themselves about, and observe, such restrictions.
Any failure to comply with the applicable restrictions may constitute a
violation of the securities laws of any such jurisdiction.
This announcement contains statements about Amalgamated Beverages Industries
Limited (`ABI`), SABMiller plc (`SABMiller`) and members of the SABMiller
group (together with SABMiller, the `SABMiller Group`) that are or may be
forward looking statements. All statements other than statements of
historical facts included in this announcement may be forward looking
statements. Any statements preceded or followed by or that include the
words `targets`, `plans`, `believes`, `expects`, `aims`, `intends`, `will`,
`may`, `anticipates` or similar expressions or the negative thereof are
forward looking statements. Forward looking statements include statements
relating to the following: (i) future capital expenditures, expenses,
revenues, economic performance, financial condition, dividend policy, losses
and future prospects; (ii) business and management strategies and the
expansion and growth of ABI`s or the SABMiller Group`s operations; and (iii)
the effects of government regulation on ABI`s or the SABMiller Group`s
business.
These forward looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of any such person, or industry results, to be
materially different from any results, performance or achievements expressed
or implied by such forward looking statements. These forward looking
statements are based on numerous assumptions regarding the present and
future business strategies of such persons and the environment in which each
will operate in the future. All subsequent oral or written forward looking
statements attributable to ABI or any member of the SABMiller Group or any
persons acting on their behalf are expressly qualified in their entirety by
the cautionary statement above. ABI and the SABMiller Group expressly
disclaim any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained herein to reflect any
change in their expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Date: 22/09/2004 04:30:14 PM Produced by the JSE SENS Department
