| Thu 14 Jul 2005, 13:24 | | THE TIGER BRANDS STAFF EMPOWERMENT TRANSACTION |
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Tiger Brands Limited - The Tiger Brands Staff Empowerment Transaction
Tiger Brands Limited
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS ISIN: ZAE000023560
(`Tiger Brands` or `the Company`)
THE TIGER BRANDS STAFF EMPOWERMENT TRANSACTION
1. INTRODUCTION
Tiger Brands is pleased to announce the first phase of the introduction of
direct black ownership to the Company. In furthering its commitment to Broad-
Based Black Economic Empowerment (`BEE`), Tiger Brands is proposing, subject
to the fulfilment of the conditions precedent set out in paragraph 5 below, to
facilitate the acquisition of a 4% direct ownership interest in its ordinary
share capital by a broad base of staff employed by Tiger Brands and its
subsidiaries (`the Tiger Brands Group`), namely Tiger Food Brands Limited
(`Tiger Food Brands`), Adcock Ingram Limited, Adcock Ingram Healthcare
(Proprietary) Limited, Adcock Ingram Critical Care (Proprietary) Limited and
Enterprise Foods (Proprietary) Limited (`the Tiger operating subsidiaries`)
(`the staff empowerment transaction`). The total value of the staff
empowerment transaction is R729 million, based on the closing price of Tiger
Brands ordinary shares (`Tiger Brands shares`) on JSE Limited (`the JSE`) on
13 July 2005 of R112 (`the scheme consideration`). It is intended that the
transaction will be implemented through the following trusts and special
purpose vehicle:
the Tiger Brands Black Managers Trust, a trust formed for the benefit of
current, as well as future, black managers of the Tiger operating subsidiaries
(`the Black Managers Trust`), which will acquire 4.4 million Tiger Brands
shares; and
the Tiger Brands Thusani Trust, a trust formed solely for the purpose of
providing benefits on a social and compassionate needs basis to the black South
African employees of the Tiger Brands Group and their immediate families (`the
Thusani Trust`), which will indirectly acquire 1.5 million Tiger Brands shares
through the acquisition of a special purpose vehicle, Thusani Empowerment
Investment Holdings(Proprietary) Limited (`Thusani`), a wholly-owned subsidiary
of Tiger Brands.
In addition, Tiger Brands is proposing that every employee, both black and
white, employed by the Tiger operating subsidiaries who does not qualify to
receive Tiger Brands shares through the Black Managers Trust or has not been
allocated Tiger Brands share options within the last three years in the Tiger
Brands Share Option Scheme (`general staff`) will acquire 50 Tiger Brands
shares for no consideration (`the General Staff Scheme`), which will, in
aggregate, amount to 549 800 shares, which have a value of R61 million based
on the closing share price of Tiger Brands shares on 13 July 2005. These Tiger
Brands shares will be held in a nominee (bewind) trust (`the General Staff
Trust`) for the benefit of qualifying employees. Approximately 80% of the
general staff are black.
In total, black people will be entitled to a participation in 3.94% of Tiger
Brands` issued ordinary share capital subsequent to the implementation of the
staff empowerment transaction.
The staff empowerment transaction will require, pursuant to a scheme of
arrangement, each Tiger Brands shareholder to dispose of 4 shares for every
100 shares held in the Company in exchange for the scheme consideration. The
implementation date of the staff empowerment transaction is expected to be
during October 2005 (`the implementation date`).
The staff empowerment transaction will be funded through a combination of cash
resources available to Tiger Brands and third party funding.
2. TIGER BRANDS` BEE STRATEGY
Tiger Brands is firmly committed to BEE in South Africa. The Company accepts
that meaningful participation by black people in the mainstream economy is
essential to sustaining South Africa`s economic and democratic structures.
Tiger Brands follows a BEE strategy aimed at achieving:
a meaningful number of black senior management in the Tiger Brands Group;
a staff complement that reflects South Africa`s diverse demographic profile;
the transfer of skills to black staff;
procurement policies that recognise the principles of BEE;
a growing and economically active customer base drawn from previously
disadvantaged groupings in South Africa; and
social development programmes that are primarily directed at developing and
empowering previously disadvantaged groupings.
The Tiger Brands board of directors (`the board`) is of the view that the most
appropriate BEE ownership strategy for the Company is to introduce direct
ownership in a phased manner. Tiger Brands has set a target for black
ownership of 25% by no later than 2010, with a minimum of 10% to be direct
ownership and the balance to be indirect ownership.
The rationale for this first phase in the introduction of direct black
ownership includes:
demonstrating Tiger Brands` commitment to BEE;
assisting in retaining existing black staff;
attracting top black professionals to the Company;
preserving and enhancing Tiger Brands` current business;
making progress towards the proposed ownership requirements of the
Department of Trade and Industry`s draft amended Codes of Good Practice on
BEE and Government`s overall drive to empower the South African economy; and
ensuring Tiger Brands is competitive in South Africa in the context of BEE.
To further improve its black ownership credentials, Tiger Brands will continue
to consider BEE ownership transactions at the appropriate level of the Tiger
Brands Group.
3. MECHANICS OF THE STAFF EMPOWERMENT TRANSACTION
Four entities will be set up to facilitate the staff empowerment transaction,
namely, the Black Managers Trust, Thusani, the Thusani Trust and the General
Staff Trust.
3.1 The scheme of arrangement
The sole purpose of the Black Managers Trust, Thusani and the General Staff
Trust will be to acquire Tiger Brands shares for the purpose of the staff
empowerment transaction. The trustees of the Black Managers Trust, the
trustees of the General Staff Trust and Thusani, will together propose a
scheme of arrangement in terms of section 311 of the Companies Act, 1973 (Act
61 of 1973), as amended (`the Companies Act`), between Tiger Brands and its
shareholders (`the scheme`) for the acquisition by these empowerment entities
of 6.5 million Tiger Brands shares on a pro rata basis from Tiger Brands
shareholders for the scheme consideration of R112 per share.
Each Tiger Brands shareholder will be required to dispose of 4 shares for
every 100 shares held on the record date of the transaction. The aggregate
value of the staff empowerment transaction will be R729 million, based on
the closing price of Tiger Brands shares on 13 July 2005.
After the implementation of the scheme:
the Black Managers Trust will have acquired 4.4 million Tiger Brands shares,
valued at R496 million;
Thusani will have acquired 1.5 million Tiger Brands shares, valued at R172
million; and
the General Staff Trust will have acquired 549 800 Tiger Brands shares,
valued at R61 million.
The ordinary share capital of Thusani will have a nominal value, as the value
of the preference share funding into Thusani will match the value of the Tiger
Brands shares acquired by Thusani in terms of the scheme. The Thusani Trust
will acquire the entire issued ordinary share capital of Thusani for a nominal
amount.
3.2 The resultant structure
See press release for details of the shareholding structure of Tiger Brands
subsequent to the staff empowerment transaction.
4. IMPORTANT TERMS OF THE STAFF EMPOWERMENT TRANSACTION
4.1 The Black Managers Trust
It is proposed that the Black Managers Trust will operate for the benefit of
current and future black managers, who are South African citizens employed on
a full-time basis within the Tiger operating subsidiaries, graded in the Tiger
Brands C Upper Paterson band and above (`the black managers`).
The Black Managers Trust will be funded by capital contributions made by the
Tiger operating subsidiaries (`the capital contributions`) and will acquire
4.4 million Tiger Brands shares.
An internal Tiger Brands sub-committee of the board (`the Allocation
Committee`) will be established to formulate the criteria to determine the
level of participation of the black managers in the Black Managers Trust. The
level of participation will be based on each black manager`s job grade and a
fixed level of remuneration per Paterson band, calculated on a total `Cost to
Company` basis at the 75th percentile of remuneration in that band.
Each black manager will receive the economic and voting rights embodied in the
Tiger Brands shares by becoming a vested beneficiary of the Black Managers
Trust. Allocation of the Tiger Brands shares in terms of these vesting rights
will occur as follows:
approximately 40% will be allocated to current black managers who are
employed by the Tiger operating subsidiaries on the implementation date; and
the remaining Tiger Brands shares will be allocated to current and future
black managers by the Allocation Committee, as and when it deems fit.
Important terms of the Black Managers Trust include the following:
Tiger Brands will never control the Black Managers Trust. It will be
controlled by a majority of black trustees, who will be elected as
trustees by the black managers themselves.
The trustees will vote the Tiger Brands shares in the best interests of the
black managers.
The Tiger operating subsidiaries will, upon making the capital contributions
to the Black Managers Trust, have a vested right to any dividend income
received by the Black Managers Trust.
The dividend income received by the Black Managers Trust will be used to
make distributions to the Tiger operating subsidiaries up to a maximum amount
in accordance with a formula that results in a notional return of
approximately 63% of the prevailing prime interest rate.
The black managers` vesting rights will vest with the black managers on the
date of allocation (`the allocation date`) and are non-transferable.
In the event that a black manager resigns, he/she will be obliged to sell:
-all the vesting rights back to the Black Managers Trust for one cent if
their employment is terminated within a period of three years from the
allocation date;
-two-thirds of the vesting rights back to the Black Managers Trust for one
cent if their employment is terminated in the fourth year from the allocation
date; and
-one-third of the vesting rights back to the Black Managers Trust for one
cent if their employment is terminated in the fifth year from the allocation
date.
A disposal of the black managers` vesting rights will not be triggered in
the event of permanent disablement, retrenchment or retirement of a black
manager nor on the disposal of a Tiger Brands business.
The Black Managers Trust will not be entitled to dispose of, pledge, cede in
security, mortgage or hypothecate or encumber any Tiger Brands shares held
until 31 December 2014 (`the lock-in period`).
After the lock-in period, the black managers may elect to take delivery of
the full benefit of the Tiger Brands shares in accordance with their vesting
rights. In the event of such an election, the black manager will be required
to make a capital contribution to the Black Managers Trust in accordance with
a set formula. At this stage, an income tax liability will also be triggered
in the hands of the black manager.
In order to provide cash flows to the black managers, 10% of the excess of
dividends received by the Black Managers Trust, as a result of the holding of
the Tiger Brands shares, over any distributions of income made to the Tiger
operating subsidiaries in accordance with their vesting rights, will be
distributed to the black managers.
Subsequent to the Tiger operating subsidiaries having ceased to be
beneficiaries of the Black Managers Trust,all dividends received by the Black
Managers Trust will be distributed to the black managers.
4.2 Thusani and the Thusani Trust
The purpose of Thusani and the Thusani Trust is to assist in providing for the
social and compassionate needs of Tiger Brands` black staff, who are South
African citizens, and their immediate families (`the Thusani beneficiaries`).
Thusani will be capitalised by a combination of preference share funding from
Tiger Food Brands (`the Tiger Brands preference shares`) and from Rand Merchant
Bank, a division of FirstRand Bank Limited(`RMB`)(`the bank preference shares`)
and will acquire 1.5 million Tiger Brands shares pursuant to the scheme.
Important terms of the Thusani Trust and Thusani include the following:
The majority of the trustees will be black persons employed by the Tiger
Brands Group. The black employees will elect these trustees.
The trustees will vote the applicable Tiger Brands shares in the best
interests of the Thusani beneficiaries.
Dividend income received by Thusani as a result of holding Tiger Brands
shares will be used to:
-initially, declare dividends to the Thusani Trust, amounting to 10% of any
dividend income received while the bank preference shares or the Tiger Brands
preference shares are outstanding;
-service the dividend payments due in respect of the bank preference shares
and the Tiger Brands preference shares;
-redeem the capital of the bank preference shares and the Tiger Brands
preference shares; and
-declare 100% of the dividends to the Thusani Trust after both the bank
preference shares and the Tiger Brands preference shares have been fully
redeemed.
Black staff will be able to make applications to the trustees for benefits
on a social and compassionate needs basis.
It is the intention that this trust will be a 100-year trust and the
trustees will not be entitled to dispose of, pledge, cede in security,
mortgage,hypothecate or encumber any of the ordinary shares in Thusani or the
Tiger Brands shares held by Thusani, other than in the circumstances below.
The Thusani Trust may, however, be wound-up at the later of the full
repayment of both the bank preference shares and the Tiger Brands preference
shares and 31 December 2014, at the discretion of the trustees,in which event
any capital in the Thusani Trust will be transferred to an approved public
benefit organisation with BEE credentials.
4.3 The General Staff Scheme
In proposing the General Staff Scheme, Tiger Brands is promoting an inclusive,
equitable and diversity-friendly working environment where share ownership by
its employees is encouraged at all levels. Accordingly, the board believes it
is important for Tiger Brands employees to receive Tiger Brands shares in the
context of the staff empowerment transaction.
The General Staff Trust will be a nominee (bewind) trust and has been formed
solely for the purpose of administering the General Staff Scheme. To qualify,
one will need to be permanently employed by the Tiger operating subsidiaries
on the implementation date.
The General Staff Trust will be funded by the grant of R61 million made by
the Tiger operating subsidiaries.
Important terms of the General Staff Trust include the following:
Each general staff member will acquire 50 Tiger Brands shares, worth R5 600,
for no consideration.
General staff will not be entitled to dispose of the Tiger Brands shares for
a period of five years from the implementation date.
The voting rights associated with the Tiger Brands shares will vest
immediately with the general staff.
General staff will receive the dividends on their 50 Tiger Brands shares in
respect of all dividends declared by Tiger Brands after the implementation
date, commencing with the final dividend in respect of the financial year
ending 30 September 2005.
5. CONDITIONS PRECEDENT TO THE STAFF EMPOWERMENT TRANSACTION
The staff empowerment transaction will become operative and be implemented
once the following conditions precedent have been fulfilled, inter alia:
the special resolution approving the acquisition by the empowerment entities
of the Tiger Brands shares from Tiger Brands shareholders being duly passed
by Tiger Brands shareholders in general meeting;
the ordinary resolution approving the sale of the ordinary shares in Thusani
to the Thusani Trust being duly passed by Tiger Brands shareholders in
general meeting;
the scheme being approved by the requisite majority of scheme members;
the High Court of South Africa sanctioning the scheme in terms of the
Companies Act; and
a certified copy of the Order of Court sanctioning the scheme being
registered by the Registrar of Companies in terms of the Companies Act.
6. FUNDING
In the context of the staff empowerment transaction, RMB will subscribe for
preference shares to the value of R227 million in Tiger Food Brands and to the
value of R68 million in Thusani. The bank preference shares will be redeemable
with a 10-year term and will carry a cumulative preference cash dividend at a
fixed rate of 7.7%, nominal annual compounded monthly (`nacm`). The fixed rate
is based on market rates as at 12 July 2005 and is subject to changes in
market rates.
The Tiger operating subsidiaries will use the funds received from RMB and
their own available cash resources to make:
a R496 million capital contribution to the Black Managers Trust; and
a R61 million grant to the General Staff Trust.
In addition, Tiger Food Brands will subscribe for preference shares to the
value of R104 million in Thusani. The Tiger Brands preference shares will be
redeemable with a 20-year term and will carry a cumulative preference cash
dividend at a floating rate of 60% of the prime interest rate, nacm.
The funding will be split in the following proportions:
Summary of funding Amount Type of
(R`m) funding
Funding by the Tiger operating subsidiaries
and Tiger Food Brands
Tiger operating subsidiaries to Black Managers
Trust 496 Capital contribution
Tiger Food Brands to Thusani 104 Preference shares
Tiger operating subsidiaries to General Staff
Trust 61 Grant
Funding by RMB
RMB to Thusani 68 Preference shares
Funding directly to the empowerment entities 729
RMB to Tiger Food Brands 227 Preference shares
7. COST
Tiger Brands has estimated the cost of the staff empowerment transaction to be
R191 million. This translates to 1.05% of the market capitalisation of
Tiger Brands calculated with reference to the Tiger Brands share price of
R112 per share. The estimate ignores any costs or taxes that may be directly
attributable to Tiger Brands shareholders. The Standard Bank of South Africa
Limited has reviewed this calculation.
8. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects set out below have been prepared to assist
Tiger Brands shareholders to assess the impact of the staff empowerment
transaction on the earnings per share (`EPS`), headline EPS (`HEPS`), net
asset value (`NAV`) per share and tangible NAV (`TNAV`) per share of Tiger
Brands. The pro forma financial effects have been prepared for two reporting
periods, namely the six months ended 31 March 2005 and the 12 months ended 30
September 2004 (pro forma excluding The Spar Group Limited). The material
assumptions are set out in the notes following the respective tables.
These pro forma financial effects have been disclosed in terms of the JSE
Listings Requirements and do not constitute a representation of the future
financial position of Tiger Brands on implementation of the staff empowerment
transaction. The pro forma financial effects are the responsibility of the
board and are provided for illustrative purposes only.
For the six months ended Before the staff After the staff Net
31 March 2005 empowerment empowerment change
transaction(1) transaction(2) (%)
EPS (cents) 425.6 396.33 (6.9)
HEPS (cents) 422.6 393.23 (7.0)
NAV per Tiger Brands
share (cents) 2 192.8 1 820.94 (17.0)
TNAV per Tiger Brands
share (cents) 1 910.2 1 527.74 (20.0)
Notes:
1. The EPS, HEPS, NAV per Tiger Brands share and TNAV per Tiger Brands share
`Before the staff empowerment transaction` are based on the published
unaudited interim financial results of Tiger Brands for the six months ended
31 March 2005. For purposes of the calculations, the consolidated weighted
average number and the actual number of Tiger Brands shares in issue (net of
treasury shares) at 31 March 2005 are 165 466 647 and 164 181 385,
respectively.
2. For purposes of the calculations relating to the EPS and HEPS, NAV per
Tiger Brands share and TNAV per Tiger Brands share `After the staff
empowerment transaction`, the consolidated weighted average number and the
actual number of Tiger Brands shares in issue (net of treasury shares) at 31
March 2005 are 159 507 502 and 158 222 240, respectively.
3. The EPS and HEPS `After the staff empowerment transaction`:
are based on the assumption that the staff empowerment transaction was
implemented on 1 October 2004;
assume an interest rate of 7.0% nacm on any foregone cash balances;
assume a coupon rate of 7.7% nacm on the bank preference share
funding;
assume a tax rate of 29% on all taxable income; and
include transaction fees and other administration fees of R6.2 million.
4. NAV per Tiger Brands share and TNAV per Tiger Brands share `After the staff
empowerment transaction` are based on the assumption that the staff
empowerment transaction was implemented on 31 March 2005. NAV per Tiger Brands
share has been determined with reference to the interests of Tiger Brands
shareholders adjusted for the excess of the directors` valuation of unlisted
investments and associates over their carrying values. TNAV per Tiger Brands
share has been determined with reference to the interests of Tiger Brands
shareholders adjusted for the excess of the directors` valuation of unlisted
investments and associates over their carrying values, less intangible assets
and goodwill.
For the 12 months ended
30 September 2004 (excluding Before the staff After the staff Net
the financial results of empowerment empowerment change
The Spar Group Limited) transaction(1) transaction(2) (%)
EPS (cents) 646.4 611.43 (5.4)
HEPS (cents) 745.2 713.93 (4.2)
NAV per Tiger Brands
share (cents) 2 158.3 1 781.64 (17.5)
TNAV per Tiger Brands
share (cents) 1 875.9 1 488.84 (20.6)
Notes:
1. The EPS, HEPS, NAV per Tiger Brands share and TNAV per Tiger Brands share
`Before the staff empowerment transaction` are based on the published pro
forma financial results of Tiger Brands for the year ended 30 September 2004,
which exclude the financial results of The Spar Group Limited. For purposes of
the calculations, the consolidated weighted average number and the actual
number of Tiger Brands shares in issue (net of treasury shares) at 30
September 2004 are 167 567 031 and 166 147 552, respectively.
2. For purposes of the calculations relating to the EPS, HEPS, NAV per Tiger
Brands share and TNAV per Tiger Brands share `After the staff empowerment
transaction`, the consolidated weighted average number and the actual number
of Tiger Brands shares in issue (net of treasury shares) at 30 September 2004
are 161 607 886 and 160 188 407, respectively.
3. The EPS and HEPS `After the staff empowerment transaction`:
are based on the assumption that the staff empowerment transaction was
implemented on 1 October 2003;
assume an interest rate of 7.5% nacm on any foregone cash balances;
assume a coupon rate of 7.7% nacm on the bank preference share
funding;
assume a tax rate of 30% on all taxable income; and
include transaction fees and other administration fees of R6.2 million.
4. NAV per Tiger Brands share and TNAV per Tiger Brands share `After the staff
empowerment transaction` are based on the assumption that the staff
empowerment transaction was implemented on 30 September 2004. NAV per Tiger
Brands share has been determined with reference to the interests of Tiger Brands
shareholders adjusted for the excess of the directors` valuation of unlisted
investments and associates over their carrying values. TNAV per Tiger Brands
share has been determined with reference to the interests of Tiger Brands
shareholders adjusted for the excess of the directors` valuation of unlisted
investments and associates over their carrying values, less intangible assets
and goodwill.
9. IMPORTANT DATES AND TIMES
2005
Court Order issued to convene the
scheme meeting on Tuesday, 23 August
Anticipated date of posting of the circular
to shareholders on Friday, 26 August
Last day to trade in Tiger Brands shares
on the JSE in order to be recorded in the
register of members of Tiger Brands
to vote at the scheme meeting on Thursday, 8 September
Record date to vote at the scheme
meeting at 17:00 on Thursday, 15 September
Last day for receipt of forms of proxy for
the general meeting by 08:30 on Friday, 16 September
Last day for receipt of forms of proxy for
the scheme meeting by 09:00 on Friday, 16 September
General meeting to be held at 08:30 on Monday, 19 September
Scheme meeting to be held at 09:00,
or 10 minutes after the conclusion or
adjournment of the general meeting,
whichever is the later on Monday, 19 September
Announcement of results of the general
meeting and the scheme meeting on
SENS on Monday, 19 September
Announcement of results of the general
meeting and the scheme meeting in the
press on Tuesday, 20 September
Court hearing to sanction the
scheme on Tuesday, 27 September
If the scheme is sanctioned and implemented:
Announcement on SENS regarding the
sanctioning of the scheme on Tuesday, 27 September
Announcement in the press regarding
the sanctioning of the scheme on Wednesday, 28 September
Expected last day to trade in
Tiger Brands shares on the JSE
in order for Tiger Brands shareholders
to be eligible to receive
the scheme consideration on Friday, 7 October
Expected first day to trade in Tiger Brands
shares on the JSE ex-entitlement to the
scheme consideration on Monday, 10 October
Expected record date, being the date
on which Tiger Brands shareholders must
be recorded on the register of members of
Tiger Brands in order to be scheme
participants and so become entitled to
receive the scheme consideration, at 17:00 on Friday, 14 October
Expected operative date of the scheme,
at the commencement of trading on the
JSE on Monday, 17 October
The scheme consideration is expected to
be transferred or posted (as the case
may be), and new share certificates
expected to be posted, to certificated
scheme participants whose documents
of title are received by the transfer
secretaries before 12:00 on
Friday, 7 October on Monday, 17 October
Or
failing receipt of documents of title before
12:00 on Friday, 7 October, within five
business days of receipt thereof by the
transfer secretaries
The scheme consideration is expected to be
credited to the dematerialised scheme
participants` accounts held at their CSDP
or broker and share balances updated from Monday, 17 October
Notes:
1. The abovementioned times and dates are South African times and dates, and
are subject to change. Any such change will be released on SENS and published
in the press.
2. Shareholders are advised that, as trading in shares on the JSE is settled
within the STRATE environment five business days following the trade,
shareholders acquiring dematerialised shares after Thursday, 8 September 2005
will not be eligible to vote at the scheme meeting.
3. If the general meeting is adjourned or postponed, forms of proxy must be
received by no later than 24 hours prior to the time of the adjourned or
postponed general meeting, provided that, for the purpose of calculating the
latest time by which forms of proxy must be received, Saturdays, Sundays and
South African public holidays will be excluded.
4. If a form of proxy for the scheme meeting is not received by the time and
date shown above, it may be handed to the chairperson of the scheme meeting by
not later than 10 minutes before the scheme meeting is due to commence.
5. If the scheme meeting is adjourned or postponed, forms of proxy must be
received by no later than 24 hours prior to the time of the adjourned or
postponed scheme meeting, provided that, for the purpose of calculating the
latest time by which forms of proxy must be received, Saturdays, Sundays and
South African public holidays will be excluded.
6. Shareholders may not dematerialise or rematerialise their existing Tiger
Brands shares after Friday, 7 October 2005. Dematerialisation and
rematerialisation of Tiger Brands shares will re-commence under the new ISIN
after Monday, 17 October 2005.
10. OPINIONS AND RECOMMENDATIONS
Tiger Brands has structured the staff empowerment transaction in order to ensure
that it is in line with its BEE strategy. The board is mindful of the fact that
a failure by Tiger Brands to implement its BEE strategy will have negative
consequences for the business of Tiger Brands.
Taking the above factors into account, the board is of the unanimous opinion
that the terms and conditions of the staff empowerment transaction will be to
the long-term benefit of Tiger Brands` shareholders. Accordingly, the board
recommends that Tiger Brands shareholders vote in favour of the scheme and the
resolutions to be proposed at the general meeting. In respect of their personal
holdings in the share capital of Tiger Brands, the board members intend to vote
in favour of the scheme and the resolutions to be proposed at the general
meeting.
11. CIRCULAR
A circular setting out the full details of the staff empowerment transaction
will be posted to Tiger Brands shareholders by the end of August 2005.
Bryanston
14 July 2005
Investment bank and transaction sponsor
Standard Bank
Corporate law advisers
EDWARD NATHAN (Proprietary) Limited
Registration No. 2004/005665/07
Independent reporting accountants and auditors
ERNST & YOUNG
Chartered Accountants(SA)
(Registered Accountants and Auditors)
Sponsor
JPMorgan
Funder to Tiger Brands and Thusani
RAND MERCHANT BANK
A division of FirstRand Bank Limited
Date: 14/07/2005 01:13:01 PM
Produced by the JSE SENS Department
