| Wed 19 Jan 2005, 18:16 | | PUTCO LIMITED - FIRM INTENTION BY PUTCO TO MAKE AN |
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PUTCO LIMITED - FIRM INTENTION BY PUTCO TO MAKE AN OFFER TO ACQUIRE ALL THE
SHARES IN ITS ISSUED SHARE CAPITAL OF PUTCO OTHER THAN PUTCO SHARES HELD BY
CARLEO ENTERPRISES (PROPRIETARY) LIMITED (BY WAY OF A PROPOSED SCHEME OF
ARRANGEMENT) AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Putco Limited
(Incorporated in the Republic of South Africa)
(Registration number 1945/018672/06)
Share code: PTC ISIN: ZAE000005716
(`Putco` or `the company`)
FIRM INTENTION BY PUTCO TO MAKE AN OFFER TO ACQUIRE ALL THE SHARES IN ITS ISSUED
SHARE CAPITAL OF PUTCO OTHER THAN PUTCO SHARES HELD BY CARLEO ENTERPRISES
(PROPRIETARY) LIMITED (BY WAY OF A PROPOSED SCHEME OF ARRANGEMENT) AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcements dated 21 October 2004, 1 December 2004
and 11 January 2005, shareholders of Putco are advised that Putco will propose a
scheme of arrangement (`the Scheme`) in terms of Section 311 of the Companies
Act, 1973 (Act 61 of 1973), as amended (`the Companies Act`), between Putco and
its shareholders, other than Carleo Enterprises (Proprietary) Limited (`Carleo`)
pursuant to which Putco will acquire in terms of Section 85 of the Companies
Act, as a specific repurchase of shares, all of the shares held by Putco
shareholders, other than those held by Carleo (`the scheme participants`) for a
cash consideration of 850 cents per Putco share.
If the scheme becomes operative Putco`s listing on the JSE Securities Exchange
South Africa (`JSE`) will be terminated.
2. THE CONSIDERATION
The cash consideration of 850 cents per Putco share to be received by Putco
shareholders represents a premium of:
* 27% to the closing price of 670 cents per Putco share on the JSE on Wednesday,
20 October 2004, the last trading date before the publication of the cautionary
announcement referred to in 1 above; and
* 41% to the closing price of 604 cents per Putco share based on a 30-day volume
weighted average trading price for the period preceding 21 October 2004.
The Scheme offers Putco shareholders an opportunity to realise the value of
their Putco shareholdings at a substantial premium to the market price prior to
the publication of the abovementioned cautionary announcements.
3. RATIONALE
The board of directors of Putco (`the board`) is of the opinion that given the
illiquidity of Putco shares on the JSE, the size and market capitalisation of
Putco and the administrative costs associated with maintaining a listing on the
JSE, there is little justification for the continued listing of Putco shares on
the JSE.
In addition to the above, the board believes that it would be easier to
facilitate an empowerment transaction in an unlisted environment.
4. FUTURE PLANS
It is imperative for the future of the company that Putco becomes a black owned
and controlled company. Subsequent to the implementation of the Scheme, it is
the intention of Putco to facilitate a transaction whereby 51% of the entire
issued share capital of Putco will be disposed of to a black economic
empowerment (`BEE`) partner(s) in order to achieve the required BEE
shareholding. It is not contemplated that the subsequent empowerment transaction
would result in more favourable conditions being offered for Carleo`s
shareholding which are not being extended to the scheme participants.
5. OPINIONS AND RECOMMENDATIONS
An independent committee appointed by the Putco board will review the terms and
conditions of the Scheme (`the Independent Committee`). Putco has appointed
Deloitte & Touche as its independent advisor to advise the Independent Committee
and the scheme participants of Putco on the terms and conditions of the Scheme.
6. SHAREHOLDER SUPPORT
Shareholders holding approximately 55% of the Putco shares to be acquired by
Putco in terms of the Scheme have either irrevocably undertaken to vote in
favour of or, where applicable, to recommend to their non-discretionary clients
to vote in favour of the special and ordinary resolutions required to give
effect to the share repurchase and to accept the cash consideration of 850 cents
per Putco share.
7. PRO FORMA FINANCIAL EFFECTS
The table below sets out the illustrative pro forma financial effects of the
Scheme on scheme participants based on the audited historical financial
information for the year ended 30 June 2004 assuming that the Scheme had been
implemented on 1 July 2003 for income statement purposes and on 30 June 2004 for
balance sheet purposes:
Before After
the the
Scheme Scheme Percentag
(cents (cents e
per per change
share) share)
Market value 670 850 27
30 day volume weighted
average market valueSquared 604 850 41
Dividends3 50 57 14
Net asset value4 588 850 45
Net tangible asset value4 588 850 45
Notes:
1. The `Before the Scheme` column reflects the closing JSE market value per
Putco share on 20 October 2004, being the day immediately preceding publication
of Putco`s first cautionary announcement. The `After the Scheme` column shows
the consideration to be received per Putco share.
2. The `Before the Scheme` column reflects the 30-day volume weighted average
JSE market value per Putco share calculated for the 30 days preceding 21 October
2004, being the day of publication of Putco`s first cautionary announcement. The
`After the Scheme` column shows the consideration to be received per Putco
share.
3. The `Before the Scheme` column reflects the dividend distributed per Putco
share for the year ended 30 June 2004. The `After the Scheme` column shows the
after-tax interest income that a scheme participant would have earned had the
consideration of 850 cents per Putco share been invested at an after-tax
interest rate of 6.75% per annum.
4. The `Before the Scheme` column reflects the audited net asset value and net
tangible asset value per share at 30 June 2004. The `After the Scheme` column
shows the consideration to be received per Putco share.
8. CONDITIONS PRECEDENT
* The Scheme is subject to the fulfilment of the following conditions precedent:
a special resolution being passed by the necessary majority of Putco
shareholders in general meeting (convened to be held on the same date and at the
same venue as the scheme meeting) in terms of which Putco is authorised in terms
of Section 85 of the Companies Act to repurchase all the shares, other than
those held by Carleo, in the issued share capital of Putco and that such special
resolution is registered by the Registrar of Companies in terms of the Companies
Act;
* the approval of the Scheme by all applicable regulatory authorities 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 Putco shareholders present and voting either
in person or by proxy at a meeting of scheme participants (other than Carleo);
* the High Court of South Africa sanctioning the Scheme in terms of the
Companies Act; and
* a certified copy of the Order of the High Court sanctioning the Scheme being
registered by the Registrar of Companies in terms of the Companies Act.
9. SRP RULING AND CONFIRMATION OF SUFFICIENT FUNDS
The SRP has given its consent in terms of Rule 32 of the Securities Regulation
Code on Take-Overs and Mergers that the transaction as detailed above may be
proposed and implemented by Putco, notwithstanding that a period of twelve
months has not elapsed since the previous scheme of arrangement which was
proposed by Putco between Putco and its shareholders.
The SRP has been given appropriate confirmation (in terms of its requirements)
that Putco will have sufficient cash resources available to meet its obligations
in terms of the Scheme.
10. FURTHER ANNOUNCEMENTS AND DOCUMENTATION
Shareholders are advised that:
* a further announcement setting out the detailed terms, salient dates and times
of the Scheme will be made in due course; and
* a circular setting out the full details of the Scheme, which circular will
incorporate notice of the Putco general meeting and the scheme meeting, will be
posted to shareholders in due course.
11. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to the preceding cautionary announcements and this announcement,
shareholders are advised that caution is no longer required to be exercised by
Putco shareholders when dealing in their Putco securities.
Woodmead
20 January 2005
Lead transaction advisor Independent financial
(Investec Corporate advisor
Finance ) (Deloitte & Touche )
Co - advisor and sponsor Attorneys
(Ernst & Young Corporate (Werksmans Inc. )
Finance )
