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L.A. GROUP LIMITED - SPECIFIC REPURCHASE OF L.A. GROUP SHARES
L.A. GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1936/008786/06)
Share Code: LAR ISIN: ZAE000028676
Share Code: LAN ISIN: ZAE000028684
(`L.A. Group` or `the company`)
SPECIFIC REPURCHASE OF L.A. GROUP SHARES
1. INTRODUCTION
Shareholders are advised that the company has entered into an agreement
with George Cocolas (`the seller`) in terms of which it will, subject to the
conditions precedent set out below, acquire 641 296 L.A. Group ordinary shares
and 5 618 615 L.A. Group `N` ordinary shares (`the repurchase shares`), at a
price of 450 cents per share (`the specific repurchase`).
2. THE SPECIFIC REPURCHASE
2.1 Terms of the specific repurchase
In terms of the specific repurchase, the company will, subject to the fulfilment
of the conditions precedent set out in 2.3 below, repurchase the repurchase
shares from the seller for a repurchase price of R28 169 600 (`the repurchase
price`) with effect from 4 March 2005.
2.2 Rationale
The board of directors are of the opinion that the specific repurchase offers
the company an opportunity to enhance its earnings and net asset value per share
in the medium to long term by acquiring its own shares at an attractive price.
In addition, the specific repurchase affords the company a further opportunity
to continue to work towards eliminating its dual-voting N-ordinary share
structure.
2.3 Conditions Precedent
The specific repurchase is conditional upon, inter alia, the following
conditions precedent:
2.3.1 the requisite approvals being received from the JSE Securities
Exchange South Africa (`the JSE`);
2.3.2 the approval of the special and ordinary resolutions required to
authorise the specific repurchase by L.A. Group shareholders at the general
meeting; and
2.3.3 registration of the special resolution by the Registrar of Companies.
2.4 Funding for the specific repurchase
R15 million of the repurchase price will be financed by means of a loan obtained
by L.A. Group from a financial institution and the balance will be funded
from internal cash resources. The loan will carry an interest rate of prime
less 0.5%, and will be repaid as follows:
2.4.1 R2.5 million on 31 August 2005;
2.4.2 R5 million on 31 December 2005; and
2.4.3 R7.5 million on 31 March 2006.
2.5 Treatment of the repurchased shares
The company will, pursuant to the specific repurchase, terminate the
listing of the repurchased shares on the JSE and cancel such shares upon payment
being effected.
2.6 Financial effects
The following table sets out the unaudited pro forma financial effects of the
specific repurchase on the company based on the published unaudited interim
results for the period ended 31 August 2004. These financial effects are the
responsibility of the board of directors, have been prepared for illustrative
purposes only to provide information on how the specific repurchase might have
effected the financial information presented and, because of its nature, may not
give a true reflection of the effect of the specific repurchase.
(A) (B) (C)
Before1 After Change
(cents) (cents) %
Earnings per ordinary
and `N` ordinary share
30.64 25.483 & -17.2
4
Headline earnings per
ordinary and `N`
ordinary share 31.63 26.143 & -16.6
4
Net asset value per 458.79 451.645 -1.4
ordinary and `N`
ordinary share
Net tangible asset value 449.45 441.115 -1.7
per ordinary and `N`
ordinary share
Weighted number of
ordinary and `N` 54 841 48 582
ordinary shares in issue 9142 003
(`000)
Number of ordinary and
`N` ordinary shares in 54 841 48 582
issue (`000) 9142 003
Notes:
1. Based on the published unaudited interim results for the period ended 31
August 2004.
2. After taking into account shares held in treasury of 7 269 922.
2. Based on the published unaudited interim results for the six months ended
31 August 2004 as adjusted for the specific repurchase of 641 296 ordinary
shares and 5 618 615 `N` ordinary shares and the assumption that the repurchased
was concluded and the repurchase shares cancelled on 1 March 2004. Interest at
an after-tax interest rate of 7.35% on R15 000 000 and an after tax-interest
rate of 4.9% on R13 169 600 were applicable throughout the period under review.
4. The figures have further been adjusted for Secondary Tax on Companies
(`STC`) on the assumption that the repurchase was made from revenue reserves,
using a tax rate of 12.5%.
5. Based on the assumption that the specific repurchase was concluded and the
repurchased shares were cancelled on 31 August 2004.
6. The specific repurchase proposed is anticipated to have a positive effect
on the results for the 2005/6 financial year, despite the negative variance on
the historical figures as reflected above.
3. DOCUMENTATION AND GENERAL MEETING
A general meeting of shareholders will be held on Monday, 28 February 2005 to
approve the specific repurchase. A circular containing full details of the
specific repurchase and convening the general meeting will be posted to
shareholders in due course.
Cape Town
20 January 2005
Corporate Advisor and Sponsor
Sasfin Corporate Finance
A division of Sasfin Bank Limited
Date: 20/01/2005 11:57:13 AM
Produced by the JSE SENS Department
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