| Thu 2 Jun 2005, 17:44 | | Bearing Man/ Invicta - Offer by Invicta to the min |
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Bearing Man/ Invicta - Offer by Invicta to the minority shareholders of Bearing
Man
Bearing Man Limited(Incorporated in the Republic of South Africa)(Registration
number 1955/002109/06)Share code: BRM & ISIN code: ZAE000001137(`Bearing Man`)
Invicta Holdings Limited(Incorporated in the Republic of South
Africa)(Registration number 1966/002182/06)Share code: IVT & ISIN code:
ZAE000029773(`Invicta`)
ANNOUNCEMENT REGARDING THE OFFER BY INVICTA TO THE MINORITY SHAREHOLDERS OF
BEARING MAN
1. Introduction
Shareholders are referred to the announcements published in the press on 14
April 2005 and 19 May 2005 and are advised that Invicta is making an offer to
acquire all of the issued shares of Bearing Man that they do not already own,
being 44 524 857 ordinary shares, with a maximum cash consideration of R333 936
428 and a maximum share consideration of R302 769 031(17 809 943 shares at
R17,00 per share) (`the offer`).
Invicta currently owns 60,65% of Bearing Man.
The offer is subject to:
- The requisite shareholder approvals of Invicta; and
- The requisite regulatory approvals and consents.
2. The offer
2.1 Offer consideration
Invicta has made an offer to the minority shareholders of Bearing Man to acquire
all of the issued shares of Bearing Man that they do not already own, being 44
524 857 ordinary shares, for:
- a cash consideration equal to R7,50 per Bearing Man share (`the cash offer`);
or
- 1 Invicta share (issued at a value of R17,00 per Invicta share) for every 2,5
Bearing Man shares (with the Bearing Man shares valued at R6.80 for this
purpose) (`the share offer`); or
- a combination thereof (in terms whereof a Bearing Man shareholder can receive
the consideration through a combination of the cash offer and the share offer,
in such proportion as the shareholder elects).
Shareholders who hold 100 or less Bearing Man shares and who elect to accept the
offer, will only be able to accept the cash offer.
Shareholders representing 90,3% of the issued share capital of Bearing Man
(exclusive of the Bearing Man shares currently held by Invicta) have irrevocably
undertaken to accept the offer.
2.2 Rationale for the offer
The rationale for the offer is to improve the earnings of both Invicta and
Bearing Man shareholders through the optimisation of synergies and the
elimination of duplicated costs.
2.3 Terms of the offer
Subject to approval by Invicta shareholders in general meeting on 20 June 2005,
the offer will open at 09h00 on Tuesday, 21 June 2005 and close at 12h00 on
Friday, 15 July 2005, both dates inclusive. Bearing Man and Invicta, with the
approval of the Securities Regulation Panel (`SRP`) and the JSE Securities
Exchange South Africa (`JSE`), reserve the right to extend the closing date, in
which event all amended dates and times relating to the offer will be announced
on the Securities Exchange News Service (`SENS`) and published in the press.
All acceptances of the offer received by Invicta will be irrevocable and may not
be withdrawn.
2.4 Terms to invoke the provisions of section 440K of the Companies Act, 1973
(Act 61 of 1973), as amended (`the Act`)
Invicta intends to invoke the provisions of section 440K of the Act in order to
acquire the offer shares in respect of which acceptances have not been received,
compulsorily. These shareholders will, by default, receive the cash offer for
their Bearing Man shares if they have not responded regarding the Section 440K
notice for the election of shares or cash or a combination thereof.
It is also the intention of Invicta to effect the delisting of Bearing Man
shares from the JSE as soon as reasonably practicable after the implementation
of the offer.
2.5 Cash confirmation
The SRP has been furnished with written confirmation that Invicta has sufficient
cash resources and/or facilities to meet its obligations under the offer, with a
maximum exposure of up to R80 000 000, taking into consideration shareholders
who have irrevocably undertaken to accept the share offer.
2.6 Conditions precedent
The making of the offer is subject to the approval by the requisite majority of
Invicta shareholders in general meeting and the requisite regulatory approvals
and consents.
3. Pro forma financial information of Bearing Man
3.1 Pro forma financial effects of the share offer
The unaudited pro forma financial effects of the share offer on the earnings,
headline earnings, net asset value and net tangible asset value on a holder of
one Bearing Man share, before and after the share offer, are set out below.
These effects are based on the audited financial results of Invicta and Bearing
Man for the 12 months ended 31 March 2005. The unaudited pro forma financial
information has been prepared for illustrative purposes only and because of its
nature, may not fairly reflect the financial position of the holder of one
Bearing Man share or results of its operations after the share offer.
Notes Before After Change
(cents) (cents) (%)
Earnings per share 1 82,7 79,3 (4,1)
Headline earnings per share 1 81,9 75,9 (7,3)
Net asset value per share 2 337 347 3,0
Net tangible asset value per 2 332 253 (23,8)
share
Notes:
1. The amounts in the `Before` column are based on the earnings and headline
earnings per Bearing Man share as reported in the audited financial results of
Bearing Man for the 12 months ended 31 March 2005. The amounts in the `After`
column represent the earnings and headline earnings that would have accrued to a
holder of one Bearing Man share for the 12 months ended 31 March 2005 based on
the following principal assumptions:
- the share offer was effective 1 April 2004;
- all Bearing Man shareholders elect to take up the share offer; and
- the excess of the purchase consideration for the minority shareholders`
interests over the proportionate asset value of Bearing Man at 31 March 2005
resulting from the acquisition is assumed to represent goodwill which has not
been amortised for the purposes of the earnings and headline earnings per share
calculations. The excess purchase price over the fair value of the underlying
tangible and intangible assets of Bearing Man still needs to be allocated.
2. The amounts in the `Before` column are based on the net asset value per share
and the net tangible asset value per share as reported in the audited financial
results of Bearing Man for the 12 months ended 31 March 2005. The amounts in
the `After` column represent the net asset value per share and net tangible
asset value on a holder of one Bearing Man share based on the following
principal assumptions:
- the share offer was effective 31 March 2005;
- all Bearing Man shareholders elect to take up the share offer; and
- the excess of the purchase consideration for the minority shareholder`s
interests over the proportionate asset value of Bearing Man at 31 March 2005
resulting from the acquisition is assumed to represent goodwill which has not
been amortised for the purposes of the net asset value and net tangible asset
value per share calculations. The excess purchase price over the fair value of
the underlying tangible and intangible assets of Bearing Man still needs to be
allocated.
3.2 Pro forma financial effects of the cash offer
The unaudited pro forma financial effects of the cash offer on the earnings,
headline earnings, net asset value and net tangible asset value on a holder of
one Bearing Man share, before and after the cash offer, are set out below.
These effects are based on the audited financial results of Bearing Man for the
12 months ended 31 March 2005. The unaudited pro forma financial information
has been prepared for illustrative purposes only and because of its nature, may
not fairly reflect the financial position of Bearing Man or results of its
operations after the cash offer.
Notes Before After Change
(cents) (cents) (%)
Earnings per share 1 82,7 39,4 (52,4)
Headline earnings per share 1 81,9 39,4 (51,9)
Net asset value per share 2 337 750 122,6
Net tangible asset value per 2 332 750 125,9
share
Notes:
1.The amounts in the `Before` column are based on the earnings and headline
earnings per Bearing Man share as reported in the audited financial results of
Bearing Man for the 12 months ended 31 March 2005. The amounts in the `After`
column represent the earnings and headline earnings that would have accrued to
the holder of one Bearing Man share for the 12 months ended 31 March 2005 based
on the following principal assumptions:
- the cash offer was effective 1 April 2004;
- the cash offer earned an after tax return of 5,25% assuming a taxation rate of
30%; and
- all Bearing Man shareholders elect to take up the cash offer.
2. The amounts in the `Before` column are based on the net asset value per share
and the net tangible asset value per share as reported in the audited financial
results of Bearing Man for the 12 months ended 31 March 2005. The amounts in
the `After` column represent the net asset value per share and net tangible
asset value per share of a holder of one Bearing Man share based on the
assumption that the cash offer was effective 31 March 2005.
4. Pro forma financial information of Invicta
4.1 Pro forma financial effects of the share offer
The unaudited pro forma financial effects of the share offer on the earnings,
headline earnings, net asset value and net tangible asset value per Invicta
share, before and after the share offer, are set out below. The unaudited pro
forma financial information has been prepared for illustrative purposes only and
because of its nature, may not fairly reflect the financial position of Invicta
or results of its operations after the share offer.
Notes Before After Change
(cents) (cents) (%)
Earnings per share 1 190 198 4,2
Headline earnings per share 1 179 190 6,1
Net asset value per share 2 613 868 41,6
Net tangible asset value per share 2 561 632 12,7
Notes:
1. The amounts in the `Before` column are based on the earnings and headline
earnings per Invicta share as reported in the audited financial results of
Invicta for the twelve months ended 31 March 2005. The amounts in the `After`
column represent the earnings and headline earnings that would have accrued per
Invicta share for the twelve months ended 31 March 2005. This is based on the
assumption that the share offer was effective 1 April 2004 and that the election
by Bearing Man shareholders for the consideration is for the receipt of Invicta
shares only;
2. The amounts in the `Before` column are based on the net asset value per share
and net tangible asset value per share as reported in the audited financial
results of Invicta for the twelve months ended 31 March 2005. The amounts in the
`After` column represent the net asset value per share and net tangible asset
value per Invicta share based on assumption that the share offer was effective
31 March 2005; and
3. Transactional costs of R540 000 have been taken into account in the `After`
column.
4.2 Pro forma financial effects of the cash offer
The unaudited pro forma financial effects of the cash offer on the earnings,
headline earnings, net asset value and net tangible asset value per Invicta
share, before and after the cash offer, are set out below. The unaudited pro
forma financial information has been prepared for illustrative purposes only and
because of its nature, may not fairly reflect the financial position of Invicta
or results of its operations after the cash offer.
Notes Before After Change
(cents) (cents) (%)
Earnings per share 1,4 190 202 6,3
Headline earnings per share 1,4 179 191 6,7
Net asset value per share 2 613 612 (0,2)
Net tangible asset value per 2 561 250 (55,4)
share
Notes:
1. The amounts in the `Before` column are based on the earnings and headline
earnings per Invicta share as reported in the audited financial results of
Invicta for the twelve months ended 31 March 2005. The amounts in the `After`
column represent the earnings and headline earnings that would have accrued per
Invicta share for the twelve months ended 31 March 2005. This is based on the
assumption that the cash offer was effective 1 April 2004 and that the election
by Bearing Man shareholders for the consideration is for the receipt of cash
only;
2. The amounts in the `Before` column are based on the net asset value per share
and net tangible asset value per share as reported in the audited financial
results of Invicta for the twelve months ended 31 March 2005. The amounts in the
`After` column represent the net asset value per share and net tangible asset
value per Invicta share based on assumption that the cash offer was effective 31
March 2005;
3. Transactional costs of R540 000 have been taken into account in the after
column; and
4. Net interest paid based on debt raised to finance the cash offer at an
interest rate of 10% on a before tax basis has been taken into account in the
earnings per share and headline earnings per share, in the `After` column.
5. Opinions and recommendations in terms of Bearing Man
5.1 Independent adviser`s opinion
The board of directors of Bearing Man appointed Moores Rowland to provide them
with advice as to the fairness and reasonableness of the terms and conditions of
the offer. Moores Rowland has considered the terms and conditions of the offer
and has expressed the opinion that based on their assessment of the value of a
Bearing Man share, the offer is fair and reasonable.
5.2 Opinion of the board of directors of Bearing Man
The board of directors of Bearing Man has considered the following:
- The terms and conditions of the offer;
- The opinion of the independent adviser, Moores Rowland; and
- That Bearing Man shareholders holding 40 200 085 Bearing Man shares
representing 90,3% of the issued share capital of Bearing Man (exclusive of
Bearing Man shares currently held by Invicta) have in writing irrevocably
undertaken to accept the offer.
The board of directors of Bearing Man, taking into account the above
considerations, is unanimously of the opinion that the terms and conditions of
the offer are fair and reasonable to Bearing Man shareholders and it recommends
that Bearing Man shareholders accept the offer.
6. Opinions and recommendations in terms of Invicta
6.1 The board of directors of Invicta, having evaluated the rationale for and
the terms and conditions of the offer, is of the opinion that the offer will
enhance shareholder value and recommends that Invicta shareholders vote in
favour of the ordinary resolutions necessary to approve the offer and to issue
the consideration shares, which resolutions will be proposed at the general
meeting.
6.2 The directors of Invicta, holding directly and indirectly 39 544 970 Invicta
shares (representing approximately 60,59% in the issued share capital of
Invicta), intend to vote in favour of the ordinary resolutions necessary to
approve the offer, to issue the consideration shares, which resolutions will be
proposed at the general meeting.
7. Salient dates and times
7.1 If the conditions precedent have been met, the salient dates and times for
Bearing Man shareholders in terms of the offer will be as follows:
2005
Offer opens at 09h00 on Tuesday, 21 June
Last day for Bearing Man minority shareholders to Friday, 8 July
trade in their shares on the JSE to be eligible to
participate in the offer
Shares trade `ex` the offer Monday, 11 July
Record date for participating in the offer Friday, 15 July
Offer closes at 12h00 on Friday, 15 July
Results of the offer announced on SENS on Monday, 18 July
Results of the offer published in the press on Tuesday, 19 July
Dematerialised Bearing Man minority shareholders See note 3
who have accepted the offer will have their
accounts at their CSDP or broker credited and/or
updated with cash and/or Invicta shares, as the
case may be, within five business days of the
receipt of notification by the CSDP or broker
Cheques and/or share certificates in the name of See note 3
Invicta posted in respect of those certificated
Bearing Man minority shareholders, who have not yet
received payment and/or Invicta shares and who have
accepted the offer, within five business days of
receipt of the form of acceptance, surrender and
transfer together with the relevant documents of
title
Notes
1. The above dates and times are subject to amendment. Any such amendment will
be published on SENS and in the press.
2. Shareholders (dematerialised and certificated) 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
shareholders and their CSDP or broker.
3. In the case of a dematerialised Bearing Man shareholder, payment will be made
by crediting and/or updating their accounts at the CSDP or broker with cash
and/or Invicta shares, as the case may be, as agreed to between the shareholder
and the CSDP, as soon as possible after, but at least within five business days
of the day on which the form of acceptance, surrender and transfer is received.
4. In the case of a certificated Bearing Man shareholder, such payment will be
made by cheque and/or share certificates in the name of Invicta at the risk of
the shareholder concerned, as soon as possible after, but at least within five
business days of the day on which the form of acceptance, surrender and transfer
and relevant documents of title are received.
5. Share certificates may not be dematerialised or rematerialised between
Monday, 11 July 2005 and Friday, 15 July 2005, both days inclusive.
7.2 The salient dates and times for Invicta shareholders in terms of the offer
are as follows:
2005
Last day to submit forms of proxy in respect of the Friday, 17 June
general meeting to approve the offer, by 11h00 on
General meeting at 11h00 on Monday, 20 June
Results of the general meeting released on SENS on Monday, 20 June
Results of the general meeting published in the Tuesday, 21 June
press on
Notes
1. The above dates and times are subject to amendment. Any such amendment will
be published on SENS and in the press.
2. If you are an Invicta shareholder and have dematerialised your shares with a
CSDP or broker, other than with own name registration, you must arrange with
them to provide you with the necessary authorisation to attend the general
meeting or you must instruct them as to how you wish to vote in this regard.
This must be done in terms of the agreement entered into between you and the
CSDP or broker in the manner and cut-off time stipulated by the CSDP or broker.
8. Withdrawal of cautionary
Shareholders of Invicta and Bearing Man are hereby advised that the cautionary
announcements are withdrawn.
9. Circular to shareholders
Circulars, containing details of the offer and including a notice of general
meeting for Invicta shareholders, will be posted to Bearing Man and Invicta
shareholders on Friday, 3 June 2005.
Cape Town
2 June 2005
Independent adviser to Bearing Man
Moores Rowland
Sponsor to Bearing Man and Invicta
Deloitte & Touche Sponsor Services (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1996/000034/07)
Attorneys
Bernadt Vukic Potash & Getz
Reporting accountants to Bearing Man
PricewaterhouseCoopers
Reporting accountants to Invicta
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Corporate adviser
Bravura
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited
Date: 02/06/2005 05:06:15 PM
Produced by the JSE SENS Department
