| Thu 23 Sep 2004, 9:32 | | The Proposed Unbundling And Separate Listing |
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Tiger Brands - The Proposed Unbundling And Separate Listing Of The Spar Group
Limited
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS ISIN: ZAE000023560
(`Tiger Brands` or `the company`)
THE PROPOSED UNBUNDLING AND SEPARATE LISTING OF THE SPAR GROUP LIMITED (`Spar`)
1. Introduction
On 13 May 2004 Tiger Brands announced on SENS that, as part of its ongoing
focus on its core activities, and in order to maximise shareholder value, it
intended to unbundle its entire shareholding in Spar (the `unbundling`). The
board of directors of Tiger Brands (the `Tiger Brands directors`) has therefore
resolved, subject to the fulfilment of certain conditions precedent and in terms
of the unbundling agreement entered into between Tiger Brands and Spar on 15
September 2004, to distribute 168 763 670 Spar shares (the `Spar distribution
shares`) to Tiger Brands shareholders and to make an application for the
separate listing of the Spar shares on the JSE Securities Exchange South Africa
(the `JSE`).
The Spar distribution shares will be distributed in the ratio of one Spar share
for every one Tiger Brands share held by a shareholder recorded in the register
at the close of business on 22 October 2004 (the `record date`).
2. Background to and rationale for the unbundling
Over the past six years Tiger Brands, from a strategic point of view, has been
refocusing on its core activities, being the production, marketing and
distribution of branded food and healthcare products. This refocus has been
underpinned by the disposal of non-core assets and the implementation of various
acquisitions, including the acquisition of minority shareholdings in certain of
its subsidiaries.
The unbundling, and the subsequent listing of Spar on the JSE, will create a
newly listed entity focusing on the distribution and supply of goods and
services to independently owned SPAR, TOPS and Build it stores. As an
independent and separately listed company, Spar will be better positioned to
capitalise on its core competencies.
The unbundling will allow investors to attribute appropriate individual share
price ratings to Tiger Brands and Spar, aligned to the industry specific
dynamics of the respective companies. It is anticipated that this should unlock
shareholder value by reducing the discount at which Tiger Brands shares trade
relative to the value of its underlying businesses.
3. The unbundling
Subject to the fulfilment of the conditions precedent set out in 4 below, Tiger
Brands will distribute the Spar distribution shares to its shareholders by way
of the unbundling.
Tiger Brands shareholders will receive one Spar share for every one Tiger
Brands share held on the record date.
The unbundling will be effected in terms of section 46 of the Income Tax Act,
1962 (Act 58 of 1962), as amended and by way of a dividend in specie and a
reduction in the share premium account of Tiger Brands in terms of section 90 of
the Companies Act, 1973 (Act 61 of 1973) as amended.
4. Conditions precedent
The unbundling is subject to the fulfilment of the following conditions
precedent:
4.1 the passing, at a general meeting of Tiger Brands shareholders to be held at
10:00 on Friday, 8 October 2004 (the `general meeting`), of the ordinary
resolution required to implement the unbundling; and
4.2 the passing, at the general meeting, of the ordinary resolution required to
effect certain amendments to the Tiger Brands (1985) Share Purchase Scheme and
the Tiger Brands (1985) Share Option Scheme (collectively the `share incentive
scheme`) as a result of the unbundling.
5. Salient dates and times
The salient dates and times of the unbundling and listing of the Spar shares
are as follows:
2004
Last day for lodging of forms of proxy for the general
meeting by 10:00 on Thursday, 7 October
General meeting of Tiger Brands shareholders at 10:00 on Friday, 8 October
Results of the general meeting published on SENS on Friday, 8 October
Results of the general meeting published in the press on Monday, 11 October
Last day to trade in Tiger Brands shares on the JSE to
participate in the unbundling on Friday, 15 October
Tiger Brands shares trade ex the entitlement to the Spar
distribution shares on Monday, 18 October
Listing of Spar from the commencement of business on Monday, 18 October
Record date to participate in the unbundling on Friday, 22 October
Spar share certificates will be posted by registered post,
at the risk of the certificated shareholder concerned, to
certificated shareholders and dematerialised shareholders
will have their safe custody accounts at their CSDP or
broker updated on Monday, 25 October
Notes:
1. Any changes to the above dates and times will be announced on SENS and
published in the press.
2. Tiger Brands share certificates may not be dematerialised or rematerialised
between Monday, 18 October 2004 and Friday, 22 October 2004, both days
inclusive.
6 Pro forma financial effects of the unbundling
Pursuant to the unbundling, Tiger Brands shareholders will hold the Spar
distribution shares directly and, accordingly, there will be no material effect
on the aggregate dividends, earnings and underlying net asset value (`NAV`)
attributable to each Tiger Brands shareholder.
The table below sets out the pro forma financial effects of the unbundling on a
Tiger Brands shareholder in respect of his Tiger Brands shares only for the six
months ended 31 March 2004.
The pro forma financial information has been prepared to illustrate the impact
of the unbundling on the reported financial information of Tiger Brands for the
six months ended 31 March 2004, had the unbundling occurred on 30 September 2003
for income statement purposes and on 31 March 2004 for balance sheet purposes.
The pro forma financial information has been prepared for illustrative purposes
only and because of its nature may not give a true picture of the future impact
of the unbundling on Tiger Brands` financial position, NAV or results of its
operations.
Before the After the Percentage
Per Tiger Brands share (cents) unbundling(1) unbundling(3) change
Basic earnings(2) 332,4 245,8 (26,1)
Headline earnings(2) 419,7 330,4 (21,3)
NAV 2 115,7 1 715,0 (18,9)
Tangible NAV 1 692,3 1 443,8 (14,7)
Notes:
1. Based on the published unaudited interim results for the six months ended 31
March 2004.
2. Basic earnings per share and headline earnings per share are based on 167 860
562 shares, being the weighted average number of shares in issue during the six
months ended 31 March 2004.
3. Information included in the `After the unbundling` column excludes Spar`s
contribution to basic and headline earnings per share for the six months ended
31 March 2004, and to NAV and tangible NAV at 31 March 2004.
7. Directors` opinion and recommendation
The Tiger Brands directors have considered the terms and conditions of the
unbundling and are of the opinion that, having had discussions with various
advisers and stakeholders and considering the Tiger Brands share trades at a
discount relative to the value of its underlying businesses, the unbundling will
be advantageous to Tiger Brands shareholders.
Accordingly, the Tiger Brands directors are in favour of the unbundling and
intend to vote, in respect of the Tiger Brands shares held by them, in favour of
the resolutions necessary to implement the unbundling and effect the changes to
the share incentive scheme, and recommend that Tiger Brands shareholders also
vote in favour of such resolutions.
8. Long term vision
One of Tiger Brands` major strengths is its wide basket of quality food and
healthcare brands which offers opportunities for growth in substantial market
segments. In the competitive environment within which the company operates,
Tiger Brands` strong array of brands, assisted by a focus on low cost
production, will be a key success factor in its ability to deliver sustainable
growth for its shareholders.
The company`s long term vision is to be the world`s most admired branded food
and healthcare company in emerging markets. Over the past six years significant
progress has been made towards positioning the group as a synergized, branded
food and healthcare company. This has entailed the systematic disposal of non-
core assets and the conclusion of various strategic acquisitions in both food
and healthcare. The unbundling of Astral Foods in 2001 was also an important
step in the process, enabling the group to focus on its core activities.
The strategy thus far employed, of aligning the company with its long term
vision, has culminated in the proposed unbundling of Spar. With the unbundling
of Spar, Tiger Brands is now ideally positioned to move into the next phase of
its growth strategy.
9. General meeting
A general meeting of Tiger Brands shareholders has been convened to be held at
10:00 on Friday, 8 October 2004 at the registered office of Tiger Brands, 85
Bute Lane, Sandown, Sandton, 2196, in order to consider and, if deemed fit,
pass, with or without modification, the ordinary resolutions required to
implement the unbundling and amend the share incentive scheme.
10. Circular to shareholders
A circular, including the notice convening the general meeting, together with
the Spar pre-listing statement, which documents contain full details of the
unbundling, is being posted to Tiger Brands shareholders today, 23 September
2004.
Copies of the circular and the Spar pre-listing statement will be available on
the Tiger Brands web site www.tigerbrands.com. Additional copies of the circular
and Spar pre-listing statement may be obtained during normal business hours from
Thursday, 23 September 2004 until Friday, 22 October 2004, both days inclusive,
at the following addresses:
* Tiger Brands, 85 Bute Lane, Sandown, Sandton;
* Nedbank Capital, 3rd Floor, Corporate Place, 135 Rivonia Road, Sandown,
Sandton;
* Edward Nathan & Friedland, 4th Floor, The Forum, 2 Maude Street, Sandown,
Sandton;
* Computershare Investor Services 2004 (Pty) Limited, Ground Floor, 70 Marshall
Street, Johannesburg; and
* Cazenove South Africa, 1st Floor, Moorgate, Dunkeld Park, 6 North Road,
Dunkeld West.
Johannesburg
23 September 2004
Investment bank and transactional sponsor
Nedbank Capital
Corporate law advisers
Edward Nathan & Friedland (Pty) Ltd
Corporate Law advisers & Consultants
(Registration number 1999/026464/07)
Lead sponsor
Cazenove
Reporting accountants and auditors
Ernst & Young
Chartered Accountants (SA)
(Registered Accountants and Auditors)
Date: 23/09/2004 08:55:09 AM Produced by the JSE SENS Department
