| Wed 13 Apr 2005, 16:28 | | Creation And Implementation |
|
Caxton And CTP Publishers And Printers Limited - Creation And Implementation Of
A New Equity Based Incentive Scheme Incorporating A Specific Issue Of 40 Million
New Cat Ordinary Shares
Withdrawal Of Cautionary Announcement
CAXTON AND CTP PUBLISHERS AND PRINTERS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1947/026616/06)
Share code: CAT ISIN: ZAE000043345
Preference share code: CATP ISIN: ZAE000043352
(`CAT` or `the company`)
CREATION AND IMPLEMENTATION OF A NEW EQUITY BASED INCENTIVE SCHEME INCORPORATING
A SPECIFIC ISSUE OF 40 MILLION NEW CAT ORDINARY SHARES
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction and rationale for the transaction
Shareholders are referred to the cautionary announcement published on 18
February 2005 wherein they were advised that the board of directors of CAT had
on 25 January 2005 resolved to pursue the implementation of a new share
incentive scheme by the company.
The board of directors recognises the need to incentivise the employees of CAT
and its subsidiaries (`the group`) and to align the interests of these employees
with those of shareholders, thereby ensuring the long term sustainability and
growth of the group. The transaction will also strengthen the control of Caxton
Limited (`Caxton`), which currently holds a 40% interest in CAT, so that Caxton
can actively support the company in its strategy of optimising growth
opportunities which may present themselves from time to time.
The transaction will include the following:
- The incorporation of a special purpose vehicle, CAT Share Scheme Limited
(`CSS`) and the specific issue by CAT of 40 000 000 ordinary shares (`the CAT
ordinary shares`) at a price of R10 per ordinary share (`the specific issue of
CAT ordinary shares`) to CSS. CSS will be a subsidiary of Caxton Limited,
through Caxton Limited holding all the high voting `A` ordinary shares in CSS;
- the establishment of a Trust (`the Trust`) to administer the CAT Share
Incentive Scheme (`the Scheme`), which will hold 40 000 000 low voting `B`
ordinary shares in CSS, and thus a 100% economic interest in the CAT ordinary
shares on behalf of the beneficiaries of the Scheme; and
- the provision of R400 million of financial assistance by CAT through the
subscription by CAT for 400 variable rate redeemable preference shares of R1
each in CSS (`the preference shares`) at an issue price of R1 million per
preference share.
2. The transaction
2.1 The specific issue of CAT ordinary shares
CAT will issue 40 000 000 CAT ordinary shares to CSS at a price of R10 per
ordinary share. The CAT ordinary shares to be issued represent approximately
8,1% of the company`s issued share capital after the transaction. The issue
price of R10 per CAT ordinary share represents a premium of 1,4% to the weighted
average traded price of R9,86 over the 30 days prior to the date (25 January
2005) that the price was determined.
2.2 The Scheme
2.2.1 The salient features of the scheme include:
The major part of the `B` ordinary shares in CSS will be allocated to
participants with the remainder being held by the Trust for the benefit of the
general body of CAT staff. The unallocated shares may also be allocated to
attract and retain key people.
2.2.2 No single participant may hold more than 10% of the `B` ordinary
shares in CSS (equivalent to 0,8% of the issued share capital of CAT);
2.2.3 The Scheme will be in place for a fixed period of ten years. From the
end of year three, participants will be entitled to gains on their allocations
in annual increments of 25%;
2.2.4 Caxton will be obliged, during the ten year term of the scheme, to
acquire the `B` ordinary shares that participants may wish to sell. Upon
leaving the company or at the end of the ten year term participants will be
required to sell the `B` ordinary shares to Caxton. In all instances, the price
per `B` ordinary share will be determined at a price of the then market value of
a CAT share less R10 (being the price at which a CAT ordinary share is issued in
terms of the transaction).
2.3 The preference shares
CAT will subscribe for the 400 preference shares in CSS at an issue price of R1
million per preference share in order to fund the subscription by CSS of the CAT
ordinary shares. Dividends accruing to CSS in respect of the CAT ordinary
shares it owns will be declared as preference share dividends to CAT. As a
result, the transaction is neutral from a cash flow point of view.
3. Conditions precedent
The transaction is subject to the following conditions precedent:
3.1 The approval thereof by the JSE Securities Exchange South Africa (`JSE`)
and such other regulatory authorities as may be relevant; and
3.2 the requisite resolutions approving the transaction in accordance with the
provisions of the Companies Act, 1973 (Act 61 of 1973)(`the Companies Act`), as
amended, and the Listings Requirements of the JSE being passed by shareholders
in general meeting.
Other information in terms of the JSE Listings Requirements
4.1 Related party transaction
CSS will be a subsidiary of Caxton. As such, the transaction constitutes a
related party transaction in terms of the Listings Requirements of the JSE and
written confirmation from an independent professional expert acceptable to the
JSE, as to whether the terms and conditions of the transaction are fair and
reasonable to CAT shareholders, is required.
Sasfin Corporate Finance has been appointed as independent professional expert
to express an opinion on whether the terms and conditions of the transaction are
fair and reasonable to CAT minority shareholders. Their opinion will be
included in the circular referred to below.
4.2 Shareholder approval
As the transaction incorporates a specific issue of shares to a related party,
the approval of the transaction by a 75% majority of the votes cast in favour of
the resolutions by all shareholders present or represented by proxy at the
general meeting, excluding any parties and their associates participating in the
transaction, will be required.
5. Pro forma financial effects based on the published interim results for the
six months ended 31 December 2004
The following table and accompanying notes is the responsibility of the
directors of the company and sets out the un-audited pro forma financial effects
of the transaction on the earnings, headline earnings, net tangible asset value
and net asset value per ordinary share of the company. The table has been
prepared for illustrative purposes only to provide information on how the
specific issue of shares might have affected the financial information
presented, and due to its nature, may not give a true reflection of the effect
of the specific issue of shares.
Before After Change
(%)
Earnings per ordinary share 53.2 51.01 (4.1)
(cents) 52.6 50.41 (4.2)
Diluted earnings per ordinary 53.2 50.91 (4.3)
share (cents)
Headline earnings per ordinary 52.6 50.31 (4.4)
share (cents) 542 5802 7
Diluted headline earnings per 541 5782 6.8
ordinary share (cents)
Net asset value (cents) 452 492 8.8
Net tangible asset value 3103 3104 8.7
(cents) 458 001 498
Number and weighted average 0014
number of shares in issue
(`000)
Diluted number and diluted
weighted average number of
shares in issue (`000)
Notes:
1. After taking into account the preference share dividends that CAT will
receive from CSS, assuming that CAT maintained a dividend cover ratio of two in
respect of its ordinary dividend.
2. Includes the R400 000 000 investment in the preference shares issued by
CSS.
3. After taking into account the 1 139 960 treasury shares held by a
subsidiary.
4. After taking into account the 40 000 000 CAT shares to be issued in terms
of the transaction.
6. Withdrawal of cautionary
As all the details relating to the transaction have now been announced caution
is no longer required when dealing in CAT shares on the JSE.
7. Documentation relating to the specific issue
A circular containing the details of the transaction, a fair and reasonable
opinion thereon and convening a general meeting of shareholders of the company
to approve the transaction will be posted to shareholders shortly.
Johannesburg
13 April 2005
Sponsor and Independent Expert
SASFIN CORPORATE FINANCE
A division of Sasfin Bank Limited
Legal advisor
FLUXMANS INC
