| Wed 27 Jul 2005, 17:39 | | Bridgestone Firestone Maxiprest Limited - Scheme o |
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Bridgestone Firestone Maxiprest Limited - Scheme of arrangement in terms of
Section 311 of the Companies Act, 1973 (Act 61 of 1973), as amended (`the Act`),
to be proposed by Maxiprest between Maxiprest and its members other than
Bridgestone South Africa Holdings
BRIDGESTONE FIRESTONE MAXIPREST BRIDGESTONE SOUTH AFRICA HOLDINGS
LIMITED (PROPRIETARY) LIMITED
(Incorporated in the Republic of (Incorporated in the Republic of South
South Africa) Africa)
(Registration number 1988/006456/06) (Registration number 1981/002994/07)
Share code BDS ISIN ZAE000027447 (`Bridgestone South Africa Holdings`)
(`Maxiprest` or `the company`)
Scheme of arrangement in terms of Section 311 of the Companies Act, 1973 (Act 61
of 1973), as amended (`the Act`), to be proposed by Maxiprest between Maxiprest
and its members other than Bridgestone South Africa Holdings
1. Introduction
1.1 Further to the cautionary announcement published on SENS on Friday, 8 July
2005 and in the press on Monday, 11 July 2005 (`cautionary announcement`),
Deloitte & Touche Corporate Finance is authorised to announce that
Maxiprest intends to propose a scheme of arrangement between Maxiprest and
its members other than Bridgestone South Africa Holdings (`the scheme
members`) in terms of section 311 of the Act (`the scheme`). The scheme
will be subject to the fulfillment of the conditions precedent as set out
in paragraph 5 below.
1.2 The scheme will be effected by means of a specific repurchase of Maxiprest
shares (`specific share repurchase`) in accordance with section 85 of the
Act in terms of which Maxiprest will, for a cash consideration of 115 cents
per Maxiprest share, repurchase 47 438 680 Maxiprest shares held by
Maxiprest members other than Bridgestone South Africa Holdings (`scheme
shares`) (such repurchase being referred to herein as the `specific share
repurchase`). The specific share repurchase will require the consent of
Maxiprest members in general meeting (`general meeting`).
1.3 Bridgestone South Africa Holdings currently owns 110 761 320 of the
158 200 000 issued Maxiprest shares, representing approximately 70% of
Maxiprest`s entire issued share capital.
1.4 Pursuant to the implementation of the scheme, Bridgestone South Africa
Holdings will own all the issued Maxiprest shares and the listing of
Maxiprest shares on the JSE Limited (`the JSE`) will be terminated.
2. Rationale For The Scheme
2.1 The board of directors of Maxiprest (`the board`) believes that the future
of Maxiprest would be best served if the company was delisted to allow for
a comprehensive operational and financial restructure. This may also
include an appropriate Black Economic Empowerment transaction.
2.2 In addition, there is limited tradeability of Maxiprest shares on the JSE.
2.3 The maintenance of a listing on the JSE has also been evaluated in light of
the escalating cost thereof.
2.4 The board believes that the scheme, if implemented, will benefit minority
members by providing them with a mechanism to realise their investment in
Maxiprest at a premium to the closing price of their Maxiprest shares on
the JSE on 7 July 2005.
3. The Scheme
3.1 The scheme will be effected by way of the specific share repurchase.
3.2 Maxiprest members other than Bridgestone South Africa Holdings
registered as such on the consideration record date of the scheme
(`scheme participants`) will be entitled to receive a cash payment of
115 cents for every Maxiprest share held.
4. Financial effects
The pro forma financial information below is to provide shareholders with
information about the impact of the specific share repurchase and the
scheme by illustrating how a Maxiprest shareholder might have been
affected, had the specific share repurchase been undertaken at the
commencement of the period being reported on being 1 January 2004, or in
the case of the pro forma balance sheet, at the date reported on, being 31
December 2004.
The unaudited pro forma financial effects of the specific share repurchase
and the scheme, are set out below. The unaudited pro forma financial
information provided is the responsibility of the directors. 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 a Maxiprest shareholder after the specific share repurchase and
the scheme.
4.1 Financial effects of the specific share repurchase
The financial effects on Maxiprest of the specific share repurchase,
on a per share basis, are set out in the table below:
Before After Change
(cents) (cents) (%)
Market price on 94,0 115,0 22,3
Thursday, 7 July
2005(1)
Loss(2) (33,5) (49,3) (47,2)
Headline loss(2) (28,9) (43,0) (48,8)
Net asset value(3) 119,3 122,7 2,8
Tangible net asset 109,0 108,0 (0,9)
value(3)
The table has been prepared on the following bases:
1. The closing price of the Maxiprest shares on the last trading day prior to
the publication of the first cautionary announcement on SENS on Friday, 8
July 2005.
2. The amounts in the `Before` column are based on the loss and headline loss
per Maxiprest share as reported in the audited financial results of
Maxiprest for the year ended 31 December 2004. The amounts in the `After`
column represent the loss and headline loss that would have accrued per
Maxiprest share for the year ended 31 December 2004 based on the following
principal assumptions:
- the specific share repurchase was effective 1 January 2004; and
- taking into account transaction costs of R 3,067 million.
3. The amounts in the `Before` column are based on the net asset value per
share and net tangible asset value per share for the year ended 31 December
2004. The amounts in the `After` column represent the net asset value per
share and tangible net asset value per share based on the following
principal assumptions:
- the specific share repurchase was effective 31 December 2004; and
- taking into account transaction costs of R 3,067 million .
4. The figures in the after column are based on 110 761 320 number of shares
in issue.
4.2 Financial effects of the scheme
The financial effects of the transaction on a member who accepts the
transaction, on a per share basis, are set out in the table below:
Before After Change
(cents (cents) (%)
)
Market price on 94,0 115,0 22,3
Thursday, 7 July 2005
(1)
(Loss)/earnings(2) (33,5) 4,9 114,6
Headline (28,9) 4,9 117,0
(loss)/earnings(2)
Net asset value(3) 119,3 115,0 (3,6)
Tangible net asset 109,0 115,0 5,5
value(3)
The table has been prepared on the following bases:
1. The closing price of the Maxiprest shares on the last trading day prior to
the publication of the first cautionary announcement on SENS on Friday, 8
July 2005.
2. The amounts in the `Before` column are based on the (loss)/earnings and
headline (loss)/earnings per Maxiprest share as reported in the audited
financial results of Maxiprest for the year ended 31 December 2004. The
amounts in the `After` column represent the interest that a Maxiprest
shareholder would have earned had the scheme consideration been invested on
an after tax return of 4,3% for the 12 months ended 31 December 2004.
3. The amounts in the `Before` column are based on the net asset value per
share and net tangible asset value per share for the year ended 31 December
2004. The amounts in the `After` column represent the scheme consideration
of 115 cents per share based on the assumption that the scheme was
effective 31 December 2004.
5. Conditions Precedent
The scheme is expected to become operative on Monday, 26 September 2005, after
the fulfillment of the following conditions precedent:
5.1 the specific share repurchase being approved at the general meeting in
the form of a special resolution passed in terms of the Act and
approved by a majority representing not less than 75% (seventy five
percent) of the votes exercised by Maxiprest members (other than
Bridgestone South Africa Holdings and its associates and any parties
acting in concert) present, entitled to vote and voting either in
person, by representative or by proxy and the special resolution being
registered by the Registrar of Companies (`Registrar`);
5.2 the scheme being approved at a meeting convened to consider the scheme
(`scheme meeting`) by a majority representing not less than 75%
(seventy five percent) of the votes exercised by the members present,
entitled to vote and voting either in person or by proxy at the scheme
meeting;
5.3 the High Court of South Africa (`the Court`) sanctioning the scheme;
5.4 a certified copy of the Order of Court sanctioning the scheme being
lodged with, and registered by the Registrar in terms of the Act; and
5.5 any other regulatory approvals or consents necessary to implement the
scheme, including but not limited to, approvals and consents from the
JSE, the Securities Regulation Panel (`SRP`) and the Exchange Control
Department of the South African Reserve Bank, being obtained.
6. Irrevocable undertakings
As at the date of this announcement, members holding 35,5% of the scheme shares
have given irrevocable undertakings to vote in favour of the scheme.
7. Opinions And Recommendations
7.1 The board instructed PricewaterhouseCoopers Corporate Finance
(Proprietary) Limited (`PricewaterhouseCoopers`) to review and
consider the terms and conditions of the scheme and the specific share
repurchase. PricewaterhouseCoopers has advised the board that it has
considered the terms and conditions of the scheme and the specific
share repurchase, and is of the opinion that the scheme consideration
of 115 cents payable, in cash, for every Maxiprest share is fair and
reasonable to scheme members.
7.2 The board appointed a sub-committee comprising two non-executive
directors (`the sub-committee`) to consider, assess, negotiate and
carry out any obligations that may be required of them on behalf of
Maxiprest in regard to implementing the scheme and the specific share
repurchase.
7.3 The sub-committee has considered the terms and conditions of the
scheme and the specific share repurchase and, taking into account the
opinion of PricewaterhouseCoopers, is of the unanimous opinion that
the terms of the scheme and the specific share repurchase are fair and
reasonable to Maxiprest members.
7.4 The board has considered the terms and conditions of the scheme and
the specific share repurchase and, taking into account the opinions of
the sub-committee and of PricewaterhouseCoopers, is of the unanimous
opinion that the terms of the scheme and the specific share repurchase
are fair and reasonable to Maxiprest members. Accordingly, the board
recommends that Maxiprest members vote in favour of the resolutions
necessary to authorise the scheme and the specific share repurchase.
8. Confirmation to The Securities Regulation Panel
First National Bank, a division of FirstRand Bank Limited, has satisfied the SRP
that Maxiprest has
sufficient cash resources available to meet its obligations in terms of the
scheme.
9. Further Announcement and Documentation
9.1 Subject to the necessary approvals from the JSE, the SRP and the South
African Reserve Bank, and subject to the Court granting leave to
convene the scheme meeting, a circular containing full details of the
scheme and notices convening the general meeting and the scheme
meeting will be posted to Maxiprest members in due course.
9.2 A further announcement setting out the salient dates of the scheme
will be published in the press in due course.
10. Withdrawal of cautionary announcement
Members are advised that the cautionary announcement is hereby withdrawn and
that they no longer need to exercise caution when dealing in their Maxiprest
shares.
Wynberg
27 July 2005
Corporate advisor and Sponsor Attorneys
Deloitte & Touche Corporate Finance Werksmans Incorporated
Reporting accountants Independent advisor to minority
shareholders of Maxiprest
Deloitte & Touche
PricewaterhouseCoopers Corporate
Finance (Proprietary) Limited
Date: 27/07/2005 05:30:08 PM
Produced by the JSE SENS Department
