| Wed 30 Mar 2005, 18:07 | | Ellerines / Relyant - Offer By Ellerines To Acquir |
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Release Date: 30/03/2005 17:22:41 Code(s): RLY ELH
Ellerines / Relyant - Offer by Ellerines to Acquire the Entire Issued Shares
Capital of Relyant
(ELLERINE HOLDINGS LIMITED LOGO) (RELYANT RETAIL LIMITED LOGO)
Ellerine Holdings Limited Relyant Retail Limited
(Incorporated in the Republic Incorporated in the Republic
of South Africa) (of South Africa
(Registration number 1968/013402/06) (Registration number 1937/010108/06)
JSE Share Code: ELH JSE Share Code: RLY
NSX Share Code: ELL
ISIN: ZAE000022752 ISIN:ZAE000016457
(`Ellerines`) (`Relyant`)
OFFER BY ELLERINES TO ACQUIRE THE ENTIRE ISSUED SHARE CAPITAL OF RELYANT
1. Introduction
Shareholders of Ellerines and Relyant are advised that the proposed offer by
Ellerines to the shareholders of Relyant to acquire all of their Relyant shares
(the `Offer`) has been approved unconditionally by the Competition Tribunal.
Ellerines will now proceed with the Offer. Upon successful implementation of
the Offer, Ellerines and Relyant will merge, with shareholders of Relyant
becoming shareholders of Ellerines. The Offer is subject to the satisfactory
fulfillment of the condition precedent set out in paragraph 2 below.
2. Terms of the Offer
2.1 Condition Precedent
The Offer is subject to acceptance thereof by Relyant shareholders holding in
aggregate not less than 90% of the Relyant shares.
2.2 The Offer Consideration
The Offer consideration will be in the form of Ellerines shares and will result
in Relyant shareholders receiving a net total of 42 856 875 new Ellerines shares
(the `Consideration Shares`). Each Relyant shareholder will receive 9.97839
Ellerines Shares for every 225 Relyant shares held (the `Offer Consideration`).
No cash alternative will be offered.
On the basis of a 30-day volume weighted average Ellerines share price of R33.85
at the close of business on 14 May 2004, being the last business day prior to
the publishing of the first joint cautionary announcement relating to the Offer,
the Offer Consideration represents a premium of 33% to the 30-day volume
weighted average Relyant share price of R1.13 at the close of business on that
day.
On the basis of a 30-day volume weighted average Ellerines share price of R52.87
at the close of business on 15 March 2005, being the last practicable date prior
to the finalisation of the Offer Circular referred to in paragraph 2.4 below
(the `Offer Circular`), the Offer Consideration represents a premium of 3.1% to
the 30-day weighted average Relyant share price of R2.27 at the close of
business on that day.
Given that the Offer Consideration comprises Ellerines shares, the implied
consideration per Relyant share will fluctuate in accordance with movements in
the Ellerines share price. The table below sets out the implied consideration
per Relyant share at varying Ellerines share price levels.
Ellerines share price Implied consideration per Relyant share
(Rand) (Rand)
48.00 2.13
49.00 2.17
50.00 2.22
51.00 2.26
52.00 2.31
53.00 2.35
54.00 2.39
55.00 2.44
Upon receipt of the Consideration Shares, the Relyant shareholders will, in the
aggregate, hold 36% of the issued share capital of Ellerines (net of the
3 443 577 Ellerines treasury shares).
Based on the Ellerines share price of R53.00 per share at the close of business
on 15 March 2005, being the last practicable date prior to the finalisation of
the Offer Circular, the value of the Consideration Shares is equal to R2 259
million after transaction costs of R12 million.
2.3 Opening and Closing of the Offer
The Offer will open on 8 April 2005 and close on 29 April 2005.
2.4 Offer Circular
A circular containing full details of the Offer and incorporating a form of
acceptance and surrender, will be posted to Relyant shareholders on 8 April
2005.
3. Pro Forma Financial Effects of the Offer on Relyant Shareholders
The table below sets out the pro forma financial effects of the Offer on Relyant
shareholders, and has been based on:
- the 30-day volume weighted average prices of Ellerines shares and Relyant
shares on 14 May 2004 (being the last business day prior to the publishing of
the first joint cautionary announcement relating to the Offer) and 15 March 2005
(being the last practicable date prior to the finalisation of the Offer
Circular);
- the unaudited interim financial results of Relyant for the 6 months ended
31 December 2004 and the unaudited financial results for the 6 months ended 30
June 2004, to provide a 12 month figure; and
- the audited financial results of Ellerines for the year ended 31 August
2004.
These financial effects have been prepared for illustrative purposes only and,
because of their nature, may not fairly present the financial position of the
enlarged Ellerines group after implementation of the Offer.
Before After
the the Change
Offer1 Offer
Market value per share (cents)
- 30-day volume weighted average 113.0 150.0 32.7%
price to 14 May 2004 227 234 3.1%
- 30-day volume weighted average
price to 15 March 2005
Earnings per share - fully diluted
(cents) 24.5 21.02,3 (14.3)%
- basic 25.7 21.82,3 (15.2)%
- headline
Net asset value per share (cents)
- including intangible assets 157.6 157.24,5 (0.3)%
- excluding intangible assets 154.8 ,6 (24.0)%
117.64,5
,6
Notes:
1. The `Before the Offer` financial information includes a rolling 12 months
to 31 December 2004. This has been extracted from the unaudited interim
financial results of Relyant for the 6 months ended 31 December 2004 and the
unaudited financial results for the 6 months ended 30 June 2004, to provide a 12
month figure.
2. The headline and basic earnings per share calculations have been based on
the assumption that the Offer was implemented on 1 January 2004 and that it was
effective for the 12 months ended 31 December 2004. Headline and basic earnings
per share have been adjusted to include 100% of the attributable profit of
Ellerines for the year ended 31 August 2004 (as extracted from the audited
results for the year ended 31 August 2004).
3. The `After the Offer` headline and basic earnings per share are based on
the combined headline and basic earnings per share of Ellerines and Relyant,
divided by the total fully diluted weighted average number of Ellerines shares,
net of treasury shares, including the Consideration Shares, adjusted for the
Offer Consideration.
4. The net asset values per share calculations have been based on the
assumption that the Offer was implemented on 31 December 2004.
5. Net asset values per share have been adjusted to include 100% of Ellerines`
net asset value and tangible net asset value, as the case may be, as at 31
August 2004, extracted from the audited results of Ellerines for the year ended
31 August 2004 and dividing by the total number of Ellerines shares in issue net
of treasury shares. Net asset values per share includes the goodwill arising
from the Offer of approximately R759.4 million and costs relating to the Offer
of R12 million.
6. The `After the Offer` net asset value per share is based on the combined
net asset value per share of Ellerines and Relyant, divided by the total number
of Ellerines shares in issue, net of treasury shares, including the
Consideration Shares, adjusted for the Offer Consideration.
4. Irrevocable Undertakings
Ellerines has received irrevocable undertakings from shareholders of Relyant,
holding between them 90.2% of the issued share capital of Relyant, to accept the
Offer.
5. Intention to Invoke Section 440K of the Companies Act
Should Relyant shareholders holding in aggregate not less than 90% of the issued
share capital of Relyant accept the Offer, Ellerines will invoke the provisions
of section 440K of the Companies Act, No. 61 of 1973, and compulsorily acquire
those Relyant shares not tendered in terms of the Offer.
6. Appointment of Independent Adviser
The board of directors of Relyant has appointed Java Capital to advise the board
on the Offer and as to how the Offer affects all shareholders of Relyant.
Pursuant to the requirements of the Securities Regulation Code on Takeovers and
Mergers, the substance of the advice furnished to the board will be made known
to the shareholders of Relyant in a form and manner approved by the Securities
Regulation Panel.
7. Important Dates and Times
2005
Offer opens (9:00) Friday, 8 April
Last day for Relyant shareholders to
trade in Relyant shares on
the JSE to be eligible to participate
in the offer Thursday, 21 April
Relyant shares trade `ex` the offer Friday, 22 April
Record date for participating in the offer Friday, 29 April
Closing date of the offer (12:00) Friday, 29 April
Results of the offer announced on SENS Tuesday, 3 May
Results of the offer announced in the press Wednesday, 4 May
Expected listing of the 42 856 875
Ellerines shares to be issued
in terms of the offer Monday, 18 April
Expected delisting of Relyant shares
from the JSE Monday, 20 June
Notes:
1. All times given in this document are local times in South Africa.
2. These dates and times may be changed by mutual agreement between Relyant
and Ellerines. Any change will be published in the press and on SENS.
3. The SRP requires that the offer remain open for at least 21 days. When the
offer condition precedent is fulfilled the offer will become unconditional and
Relyant shareholders will be advised on SENS and in the press.
4. Dematerialised shareholders are required to notify their CSDP or broker, as
the case may be, of their intention to accept the offer in the manner and time
stipulated in the agreement entered into between such dematerialised
shareholders and their CSDP or broker.
5. Certificated shareholders wishing to accept the offer are required to
complete and return the form of acceptance and surrender in accordance with the
instructions therein, to be received by 12:00 on the closing date.
6. The consideration shares will be posted or transferred at the risk of the
Relyant shareholder concerned by no later than five business days of the later
of:
6.1 the announcement that the offer has become unconditional; and
6.2 receipt of the documents of title and the form of acceptance and
surrender, or advice of acceptance of the offer being received from
the CSDP or broker, as the case may be.
Johannesburg
30 March 2005
Financial advisor to Ellerines Legal advisor to Ellerines Sponsor to Ellerines
Andisa Capital Cliffe Dekker Nedbank Capital
Independent advisor to Relyant Legal advisor to Relyant Sponsor to Relyant
Java Capital Sonnenberg Hoffman Galombik Investec Bank
Limited
Independent transaction advisor
Morgan Stanley
