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Seardel - Specific Repurchase Of Seardel Shares And `N` Shares
Seardel Investment Corporation Limited
Registration no. 1968/011249/06
Share Code: SER ISIN Code: ZAE000029815
Share Code: SRN ISIN Code ZAE000030144
(`Seardel`)
SPECIFIC REPURCHASE OF SEARDEL SHARES AND `N` SHARES
INTRODUCTION
Seardel concluded an agreement on 12 April 2005 in terms of which, subject to
the conditions set out below, Seardel will repurchase 1 134 900 Seardel ordinary
shares (`ordinary shares`) at a price of R3.60 per share and 3 898 288 Seardel
`N` ordinary shares (``N` shares`) at a price of R3.45 per share (collectively
`the Seardel shares`) from Coronation Fund Managers Limited, which holds the
Seardel shares in its capacity as a fund manager (`the repurchase`).
The price at which the Seardel shares are being repurchased represents a 4.52%
premium to the weighted average traded price at which the ordinary shares traded
and a 1.47% premium to the weighted average traded price at which the `N` shares
traded for the five trading days immediately preceding the date on which the
agreement to effect the repurchase was concluded.
Subject to the approval of the JSE Securities Exchange South Africa, the
repurchased shares will be cancelled and their listing will be terminated
following the repurchase.
RATIONALE FOR THE REPURCHASE
The Seardel board has resolved to utilise excess cash to repurchase Seardel
shares as and when opportunities arise. The repurchase is in line with this
resolution.
CONDITIONS
The repurchase is a specific repurchase and as such is subject to approval being
given at the general meeting referred to below in terms of a special resolution
by Seardel shareholders. Coronation and its associates are, in terms of section
5.69(b) of the JSE Listings Requirements, excluded from voting.
FINANCIAL EFFECTS ON SEARDEL
Set out in the table below are the pro forma financial effects of the repurchase
on Seardel`s ordinary and `N` shares, based on Seardel`s published interim
results for the six months ended 31 December 2004. The pro forma financial
effects have been prepared for illustrative purposes only to provide information
on how the repurchase may have impacted on the results and financial position of
Seardel. Because of their nature, the pro forma financial effects may not give a
fair reflection of Seardel`s financial position after the repurchase, or the
effect on future earnings. The pro forma financial effects are the
responsibility of Seardel`s directors.
Historical Pro forma Change
before the after the after the
repurchase repurchase repurchase
(cents) (cents) (%)
Earnings per share 22.3 22.9 3
Headline earnings per share 22.3 22.9 3
Net asset value per share 980* 1008 3
(`NAV`)
Net tangible asset value 980* 1008 3
per share (`NTAV`)
* Restated - NAV and NTAV have been recalculated, based on the actual number of
issued shares at 31 December 2004. NAV and NTAV in the reported interim results
were calculated utilising the weighted average number of issued shares.
Notes
1. The financial effects set out above are based on Seardel`s published
unaudited interim results for the six months ended 31 December 2004.
2. Earnings and headline earnings per share are based on the following
assumptions:
* The repurchase was effective 1 July 2004;
* Cash resources were utilised to fund the repurchase. The resultant
loss of interest income was calculated at the pre-tax call rate of
8.5% p.a.;
* A corporate tax rate of 30% was utilised;
* The saving in Secondary Tax on Companies (at the rate of 12.5%), is
based on a dividend per share of 14 cents;
* Headline earnings per share has been calculated utilising the weighted
average number of shares in issue.
The number of shares in issue have been calculated as follows:
Total Ordinary `N` shares
Issued shares 122 430 312 27 097 743 95 332 569
Treasury shares (5 043 822) (1 056 740) (3 987 082)
Issued shares per published 117 386 490 26 041 003 91 345 487
results for the six months ended
31 December 2004
Adjustment for repurchase of (5 033 188) (1 134 900) (3 898 288)
shares
Pro forma after the repurchase 112 353 302 24 906 103 87 447 199
3. NAV and NTAV are based on the following assumptions:
* The repurchase was effective 31 December 2004;
* 24 906 103 ordinary shares and 87 447 199 `N` shares are in issue
after the repurchase; and
* cash resources were utilised to fund the repurchase.
CIRCULAR AND GENERAL MEETING
On or about 30 May 2005 Seardel will issue a circular to shareholders including
a notice convening a general meeting (to be held at the offices of Seardel at
11h00 on Wednesday, 22 June 2005) for the purpose of considering and if deemed
fit approving all resolutions necessary to implement the repurchase.
Cape Town
16 May 2005
Corporate advisor and sponsor to Seardel
Java Capital (Proprietary) Limited
Reporting Accountants and Auditors
KPMG Inc
Date: 16/05/2005 04:13:03 PM
Produced by the JSE SENS Department
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