| Mon 4 Jul 2005, 17:34 | | m Cubed Holdings Limited - Disposal Announcement |
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m Cubed Holdings Limited - Disposal Announcement
m CUBED HOLDINGS LIMITED
Registration number: 1998/014568/06
Share code: MCU
ISIN: ZAE000033353
(`m Cubed` or `the company`)
m CUBED HOLDINGS LIMITED
Registration number: 1998/014568/06
Share code: MCU
ISIN: ZAE000033353
(`m Cubed` or `the company`)
DISPOSAL OF:
* M CUBED LIFE LIMITED AND ASSOCIATED DIVISIONS (`M CUBED LIFE`);
* AUTOMATED OUTSOURCING SERVICES LIMITED (`AOS`);
* M CUBED UNIT TRUST MANAGEMENT COMPANY LIMITED (`M CUBED UTM`);
* M3 CAPITAL MANAGEMENT (GUERNSEY) LIMITED (`M3 GUERNSEY`)
* Policy exchange (PROPRIETARY) LIMITED (`POLEX`); AND
* 74,99% OF ESCHER UK ASSET MANAGEMENT LIMITED (`ESCHER UK`)
1. Introduction
1.1 Further to the cautionary announcements dated 16 May 2005, as renewed on
SENS on 2 June 2005, PSG Capital is authorised to announce that m Cubed has
entered into agreements (`the agreements`) to dispose of the entire issued share
capitals in (and, in certain instances, claims against) m Cubed Life, AOS, m
Cubed UTM, m3 Guernsey and Polex and 74,99% of the issued share capital of, and
all m Cubed`s claims against Escher UK, for, for an aggregate disposal
consideration of R234 million, payable in cash (collectively `the disposals`).
1.2 m Cubed Life provides linked investment products and portfolios.
1.3 AOS provides outsourcing services to offshore clients and unitised
liability outsourced administration services to internal and external clients.
1.4 m Cubed UTM creates and markets retail and institutional unit trusts.
1.5 m3 Guernsey manages mutual funds.
1.6 Polex trades in pre-owned insurance policies.
1.7 Escher UK is based in the United Kingdom and provides multi-manager
solutions to institutional clients.
2. THE DISPOSALS
2.1 In terms of the agreements, subject to the fulfilment of the relevant
conditions precedent set out in paragraph 5 below (`the conditions precedent`),
m Cubed will dispose of all its shares in each of m Cubed Life, AOS, m Cubed
UTM, m3 Guernsey and Polex, and its holding of 74,99% of the shares in and all
its claims against Escher UK, as follows:
2.1.1 in terms of an agreement dated 14 June 2005, 100% of the shares in m
Cubed Life, to Fidentia Holdings (Proprietary) Limited (`Fidentia`), for a
consideration of R139 million (`the m Cubed Life disposal`);
2.1.2 in terms of agreements dated 9 June 2005, 100% of the shares in and
claims against AOS, m Cubed UTM and m3 Guernsey to Fidentia, for an
aggregaterespective considerations of, respectively, R18,5 million, R16,5
million and R10 million.
2.1.3 in terms of an agreement dated 14 June 2005, 100% of the shares in
Polex, to Fidentia, for a consideration of R10 million; and
2.1.4 in terms of an agreement dated 17 June 2005, 74,99% of the shares in
and claims against Escher UK, to the management of Escher UK, for a
consideration of R40 million (`the Escher UK disposal`).
2.2 Each of the disposals is a separate and divisible transaction and the
effective date of each of such disposals will be the first business day
following the date on which the conditions precedent in respect of that disposal
have been fulfilled, which date is expected to be no later than 1 October 2005.
2.3 The disposal consideration in respect of each disposal (with the exception
of Escher UK where a letter of undertaking has been received) has been paid and
will be held in trust by a firm of attorneys pending the effective date of each
relevant disposal.
2.4 The respective disposals are made ex dividends, amounting in aggregate to
approximately R63 million, payable to m Cubed by some of the companies being
disposed of
2.5 .
M Cubed Life Realised A Loss Of R6,783 Million For The Year Ended 28 February
2005. M Cubed Life`s Shareholders` Funds, At 28 February 2005, Was R108,5
Million.
2.6 Escher UK realised profit after tax of R4,662 million for the year ended 28
February 2005. Escher UK had negative shareholders` funds, at 28 February 2005,
of R3,4 million.
2.7 AOS, M Cubed Utm, M3 Guernsey And Polex Realised, In Aggregate, Profit
After Tax Of R3,206 Million For The Year Ended 28 February 2005 And Had
Negative Aggregate Shareholders` Funds, At 28 February 2005, Of R20,85 Million.
3. RATIONALE
While the disposals represent a continuation of the process of unlocking and
realising value for m Cubed shareholders, which began with the merger of the
asset management operations of m Cubed with those of Momentum, the disposals
now also include m Cubed Life. An unsolicited, irrevocable offer at a price and
on terms which the board of m Cubed believes are attractive to m Cubed and in
the best interests of shareholders, had been received for m Cubed Life.
These disposals will leave m Cubed with a substantial amount of cash and
provide the company with several future options which will be considered and
evaluated.
4. FINANCIAL EFFECTS
4.1 Set out below are the pro forma financial effects of, respectively, the m
Cubed Life disposal, the Escher UK disposal and the disposals, in aggregate, on
the earnings, headline earnings, net asset value and net tangible asset value
per m Cubed share, based on the assumptions that:
4.1.1 for purposes of the earnings and headline earnings per share
calculations:
- the relevant disposals were effective for the full financial year ended 28
February 2005; and
- the proceeds of the relevant disposals have been invested at an after-tax
interest rate of 5,5%;
4.1.2 for purposes of the net asset value and tangible net asset value per
share calculations, the relevant disposals were effected on 28 February 2005.
Audited Pro Change Pro Change Pro forma Change
Before forma forma After
After the After the After the
(cents) After the m After Escher disposals disposals
(1) the m Cubed the (UK) (%)
Cubed Life Escher disposal (cents)
Life disposal UK
disposal disposal (%)
(%)
(cents) (cents)
Earnings 10,4(2) 11,6 11,5 10,1 (2,9) 12,1 16,3
per share
Headline 5,6(3) 6,2 10,7 5,2 (7,1) 6,3 12,5
earnings
per share
Net asset 46,2 54,3 17,5 52,1 12,8 57,3(4) 24,0
value per
share
Tangible 33,8 45,4 34,3 39,8 17,8 54,4(4) 61,0
net asset
value per
share
1.Extracted from the audited consolidated results of m Cubed for the financial
year ended 28 February 2005.
1.Extracted from the audited consolidated results of m Cubed for the financial
year ended 28 February 2005.
2.Based on a weighted average number of 726,774 million m Cubed shares in issue
during the financial year ended 28 February 2005 and on an attributable profit
of R75,862 million for the year then ended.
2.Based on a weighted average number of 726,774 million m Cubed shares in issue
during the financial year ended 28 February 2005 and on an attributable profit
of R75,862 million for the year then ended.
3.Based on a weighted average number of 726,774 million m Cubed shares in issue
during the financial year ended 28 February 2005 and on headline earnings of
R40,342 million for the year then ended.
3.Based on a weighted average number of 726,774 million m Cubed shares in issue
during the financial year ended 28 February 2005 and on headline earnings of
R40,342 million for the year then ended.
4.Includesing the carrying value of m Cubed`s 50% interest in Advantage Asset
Managers Proprietary Limited at original carrying value of R51,8 million.
4.Including the carrying value of m Cubed`s 50% interest in Advantage Asset
Managers Limited of R51,8 million.
4.2 The financial effects contained in the table in 4.1 above:
4.2.1 have been prepared for the purposes of illustrating how each of the m
Cubed Life disposal and the Escher UK disposal, as well as all of the disposals
in aggregate, would have affected the relevant financial ratios of m Cubed for
the historic financial period indicated and are pro forma only. Accordingly,
such effects do not necessarily represent a true reflection of the financial
effects of the respective or aggregate disposals on m Cubed`s current and
future earnings and net asset value; and
4.2.2 take into account the estimated costs associated with the disposals,
the dividends declared to m Cubed prior to the disposals as set out in 2.4
above and estimated Capital Gains Tax implications.
5. CONDITIONS PRECEDENT
The disposals are subject to:
5.1 in the case of m Cubed Life, a limited due diligence investigation into
the business and affairs of m Cubed Life, the approval of m Cubed shareholders
in general meeting and the approval of the applicable statutory authorities in
South Africa;
5.2 in the case of AOS, the approval of the applicable statutory authorities in
South Africa;
5.3 in the case of m Cubed UTM, the approval of the Financial Services Board
and any other applicable statutory authority that may be required;
5.4 in the case of m3 Guernsey, the approval of the applicable statutory
authorities in South Africa, Guernsey or elsewhere;
5.5 in the case of Polex, a limited due diligence investigation into the
business and affairs of Polex and the approval of the applicable statutory
authorities in South Africa; and
5.6 in the case of Escher UK, the approval of the Financial Services Authority
in the UK and applicable statutory authorities in South Africa.
6. CIRCULAR TO m CUBED SHAREHOLDERS
A circular to m Cubed shareholders, containing details of the disposals and
notice of a general meeting to be convened for purposes of shareholder approval
of the m Cubed Life disposal as a category 1 disposal in terms of the Listings
Requirements of the JSE Securities Exchange South Africa (`the JSE`) and the
disposals as a disposal in terms of section 228 of the Companies Act, No. 69 of
1973, as amended, will, subject to approval of the JSE and the Securities
Regulation Panel (`the SRP`) be mailed to shareholders within 28 days of this
announcement or within such longer period as the JSE and/or the SRP may allow in
the circumstances.
7. INDEPENDENT EXPERT ADVICE
As required by the Securities Regulation Code on Takeovers and Mergers of the
SRP, the board of m Cubed will appoint an independent expert adviser to advise
it on the fairness and reasonableness of the terms of the disposals. Such
advice will be included in the circular to m Cubed shareholders referred to in
6 above.
8. REMAINING BUSINESSES
8.1 After implementation of the disposals, m Cubed`s business interests will
be as follows:
8.1.1 a 50% equity interest in Advantage Asset Managers Limited
(`Advantage`), the joint venture with Momentum created in early 2005, which
provides multi-manager asset management, structured products and other services,
primarily to the institutional sector;
8.1.2 AOS Employee Benefits, which provides individual investment choice
employee benefit administration for umbrella and private benefit schemes;
8.1.3 Specialised Investments, which provides customised investment
solutions for institutions, corporates and high net worth individuals; and
8.1.4 Specialised Lending, which provides bespoke lending solutions to high
net worth individuals and corporates who invest with m Cubed.
8.2 The dispute referred to in the audited group results for the year ended 28
February 2005 has not yet been resolved.
9. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement dated 16 May 2005, as renewed on 2 June 2005, is
hereby withdrawn.
Johannesburg
4 July 2005
Corporate Adviser and Sponsor Attorneys Reporting
Accountants
PSG CAPITAL LIMITED
PRINSLOO, TINDLE & PKF (Jhb)
ANDROPOULOS INC.
File name: EmailDetails.txt
NOTE-
DESCRIPTION-
From: MarleneC@psgcapital.com
To: SensSystem_User;
CC: Beverly Mather;
Subject: mCubed Disposal Announcement: RE-SUBMISSION
Message:
We attach the MARKED-UP mCubed disposal announcement, as previously
approved by Bev, which has been further amended in accordance with Ruben
Govender`s comments today (see 2.1.2 and numbering in 8) - these changes
have been marked-up.
In addition, attached is a News Release which must be released on SENS
together with the announcement, once advised to do so by G Swart.
Also attached is the required SENS cover page.
Many thanks!
Marlene Crighton (797 8608)
FOR: GERHARD SWART (797 8436)
PSG CAPITAL LIMITED
Disclaimer: http://www.psggroup.co.za/disclaimer.html
File name: PressRelease re Disposals.doc
NOTE-
DESCRIPTION-
m Cubed releases more value for shareholders
m Cubed - the JSE Securities Exchange-listed financial services group - will
have a substantial cash pile following the acceptance of an offer to purchase
three non-core businesses and an unsolicited offer to purchase substantially all
the remaining core businesses within the group excluding Advantage Asset
Managers. The buyer is the unlisted Fidentia Group.
The businesses involved are m Cubed Life, Automated Outsourcing Services,
m Cubed Unit Trust Management company, m Cubed Capital Management Guernsey,
74,99% of the issued share capital of, and all m Cubed`s claims against Escher
UK, and Policy Exchange, for a total gross consideration of R234m.
According to m Cubed group MD John Storey, should the transaction be approved,
the 50% holding that m Cubed has in Advantage multi-managers will make up the
bulk of the non-cash assets of the group.
Turning back to the unsolicited offer, Storey said that the offer to purchase
some of the core businesses was unexpected.
`We have entertained several offers to buy our local and Guernsey outsourcing
businesses and the unit trust management company, since making our intentions
public to exit non-core businesses.
`We didn`t expect to receive an offer for our core life and retail investment
operations. The cash offer backed by cash placed in trust was at a price that
we considered attractive. The board has decided to accept the offer, subject to
shareholders` approval and a circular to shareholders will be posted shortly.`
The deals, if approved, are also subject to regulatory approval.
As far as the future of m Cubed Holdings is concerned, Storey said that the sale
was never part of the planning for the business so some time will be needed to
assess the road ahead.
`We will take some time out to decide what to do with the cash, as there are
several options available to the group.`
Ends/
For further information contact John Storey on 083-675-2664.
File name: SENS CoverPage.doc
NOTE-
DESCRIPTION-
SENS Announcement Cover Page
Submitting Company Details
Submit PSG CAPITAL LIMITED Submitter G SWART
ting Contact
Compan Person
y
Story Details
Flash DISPOSAL ANNOUNCEMENT
Headline
Announcem FORMAL
ent Type
Follows Price Listed CFO
Formal Sensit Company Approval
Announcem ive Release Required
ent Approval
Required
LID Name of CFO DOUG DOEL
Instructi
on
Reference
No.
Other Requirements
Associated Cove Confirma
Story r tion of
Reference Page Release
No. Only Required
Release Dual Dual
Date & List Listing
Time ing Exchange
(dd/mm/yyy
y hh:mm)
Other
Regulatory
Approvals
Required
Special
Requests
Announcement Company Details
Listed Company Name Listed Listed Company
Company Authentication
Alpha Contact
Code
MCUBED HOLDINGS LIMITED MCU Gerhard Swart
Sponsorship Details
Does the Listed Company have a
Sponsor?
Sponso PSG CAPITAL LIMITED Sponsor Gerhard Swart
r Name Contact
Person
Phone 7978436 Fax Number 7978435
Number
Area 011 Cell 0828816149
Code Number
E-mail gerhards@psgcapital.com Announcement
Addres Approved by
s Sponsor?
