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Remgro Limited - Terms announcement in respect of the acquisition
by Remgro of an additional interest in British American Tobacco
Plc (`BAT`) (`the acquisition`)
REMGRO LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1968/006415/06)
SHARE CODE: REM ISIN: ZAE000026480
(`Remgro`)
Terms announcement in respect of the acquisition by Remgro of an
additional interest in British American Tobacco Plc (`BAT`) (`the
acquisition`)
1. Introduction
Shareholders are advised that Remgro has reached agreement with
R&R Holdings S.A. (`R&R`) and Compagnie Financiere Richemont
S.A. (`Richemont`) to effectively acquire an additional 0.6%
interest in the issued share capital of BAT. In terms of the
JSE Securities Exchange South Africa (`JSE`) Listings
Requirements this is a small related party transaction. The
terms of the acquisition are set out below.
2. Rationale for the acquisition
As a result of the conversion and sale during 2004 of BAT
preference shares held by R&R, Remgro`s effective interest in
BAT has diluted to below 10%. It has been Remgro`s intention
to maintain an effective interest in BAT in excess of 10%.
This acquisition achieves that goal by increasing Remgro`s
effective interest in BAT to 10.01%.
3. Terms of the acquisition
3.1 Acquisition consideration and mechanism
Remgro will subscribe for 19 281 686 participation
securities in R&R (`the participation securities`). The
participation securities acquired by Remgro will entitle it
to all the rewards and risks of directly owning ordinary
shares in BAT. The participation securities can be redeemed
by R&R either by delivery of the appropriate number of BAT
ordinary shares on a one-for-one basis, or by the payment by
R&R to the holder of the proceeds from the disposal of the
appropriate number of BAT ordinary shares.
The net effect is that Remgro will increase its effective
stake in BAT by 12 854 457 shares at an effective
acquisition consideration of GBP124.9 million, excluding
transaction costs, which will be settled from existing cash
resources.
This acquisition will not affect the total number of BAT
shares held by R&R.
3.2 Capital structure
The joint holding structure in respect of BAT before and
after the transaction is disclosed in the announcement
published in the Business Day, Business Report, Die Burger
and Beeld today, 4 March 2005.
3.3 Effective date
The effective date of the acquisition is 28 February 2005
and the transaction is expected to be implemented by no
later than 4 March 2005.
4. Description of BAT
BAT is the world`s second largest listed tobacco group. BAT has
more than 300 brands in its portfolio, holds robust market
positions in each of its regions and has leadership in more
than 50 of the 180 markets where they do business. BAT,
including associated companies, employs more than 85 000 people
worldwide.
5. Financial effects on Remgro The pro forma financial effects
on Remgro of the acquisition are not significant (below 3%) and
are therefore not provided.
6. Independent expert`s opinion
Remgro has appointed Rand Merchant Bank, a division of
FirstRand Bank Limited (`RMB`) as the independent professional
expert in accordance with paragraph 10.7(b) of the JSE Listing
Requirements. RMB has provided the independent sub-committee
of the board of Remgro with an opinion that the acquisition is
both fair and reasonable to the shareholders of Remgro. The
fair and reasonable statement will be open to inspection at the
Remgro office for a period of 28 days from the date of this
announcement.
Remgro Limited
Stellenbosch
4 March 2005
Independent advisor and Sponsor to Remgro
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
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