| Tue 27 Sep 2005, 17:38 | | Metropolitan Holdings Limited - Changes to the ter |
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Metropolitan Holdings Limited - Changes to the terms of the proposed second
phase of Metropolitan`s Black Economic Empowerment transaction (`the
transaction`) with Kagiso Trust Investments (Pty) Ltd (`KTI`)
Metropolitan Holdings Limited
Registration number 2000/031756/06
JSE code: MET
NSX code: MTD
ISIN code: ZAE000050456
(`Metropolitan`)
Changes to the terms of the proposed second phase of Metropolitan`s Black
Economic Empowerment transaction (`the transaction`) with Kagiso Trust
Investments (Pty) Ltd (`KTI`)
1. Introduction
Shareholders are referred to the announcement released on SENS on 18 August 2005
and the circular and notice of general meeting issued to shareholders on 5
September 2005 relating to the proposed transaction. The transaction entails
the subscription by a special purpose company which will be owned by KTI and the
Metropolitan Empowerment Trust (`the SPV`) of:
1.1 12 700 000 variable rate cumulative convertible redeemable `A2` preference
shares in the share capital of Metropolitan with a par value of 0.0001 cent each
(`the `A2` Met prefs`); and
1.2 35 000 000 variable rate cumulative convertible redeemable `A3` preference
shares in the share capital of Metropolitan with a par value of 0.0001 cent each
(`the `A3` Met prefs`).
Subsequent to the posting of the circular certain changes have been proposed to
the transaction, in particular relating to the issue price of the `A3` Met
prefs, and this announcement serves to advise shareholders of the changes to the
circular and the transaction.
2. Changes to the terms of the transaction
2.1 The issue price of the `A3` Met prefs
The proposed issue price of R10.00 per `A3` Met pref was based on a volume
weighted average trading price of Metropolitan ordinary shares (`Met ords`) on
the date of agreement relating thereto, being 22 June 2005. Due to the fact
that share prices on the JSE generally and the share price of Met ords in
particular have increased significantly since the date of such agreement and, as
it was never intended to issue the `A3` Met prefs at a discount to market price,
the board has considered it appropriate to review the issue price of the `A3`
Met prefs as follows:
* the total subscription price for the `A3` Met prefs will remain R350 000 000;
* the issue price per `A3` Met pref will be changed from R10.00 to the volume
weighted average trading price per Met ord on the JSE over the five trading days
commencing on 12 October 2005 and ending on 18 October 2005 (`the `A3` Met pref
issue price`);
* the number of `A3` Met prefs to be issued will be determined by dividing the
amount of R350 000 000 by the `A3` Met pref issue price.
2.2 The issue price of the `A2` Met prefs
In terms of the circular and notice to shareholders, the issue price per `A2`
Met pref was based on a volume weighted average trading price over the period 21
to 27 September 2005. As a result of the proposed change to the `A3` Met pref
issue price, the shareholder meeting of 5 October 2005 will have to be
reconvened at a later date and accordingly the period over which the issue price
of the `A2` Met prefs is to be determined will also be moved forward.
Shareholders are advised that the issue price per `A2` Met pref will now be
equal to the volume weighted average trading price per Met ord on the JSE over
the five trading days commencing on 12 October 2005 and ending on 18 October
2005.
2.3 Vesting periods in respect of Metropolitan Empowerment Trust
The board has decided to review the vesting periods for the participants of the
Metropolitan Empowerment Trust. It is proposed that vesting of participation
units in the Metropolitan Empowerment Trust will take place as follows:
* one third of the participation units will vest after three years from the
inception of the Metropolitan Empowerment Trust, one third will vest after four
years from inception and one third after five years from inception;
* participation units which have not vested in a participant will be forfeited
in the event that such a participant terminates his or her employment with
Metropolitan; and
* participants will not be entitled to the release of vested participation
units prior to five years from the date that the `A2` and `A3` Met prefs are
issued.
2.4 Dividend declaration
In order to avoid any perceived or actual conflict of interest arising after
implementation of the transaction no KTI directors or executive directors of
Metropolitan will participate in decisions of the Metropolitan board relating to
the declaration of dividends on Met ords or Metropolitan preference shares while
the SPV holds any preference shares in Metropolitan.
3. Financial effects of changes, opinions and directors` recommendations
The amendments to the terms of the proposed transaction will have a negligible
impact on the pro forma financial effects of the transaction on Metropolitan
disclosed in the circular. In fact, as the `A3` Met prefs are likely to be
issued at a higher price, dilution to existing shareholders will be reduced.
Merrill Lynch South Africa (Proprietary) Limited, who has been appointed by the
board of Metropolitan as the independent professional expert to advise the board
on whether the terms and conditions of the transaction are fair and reasonable
to shareholders, has issued an opinion on 1 September 2005 and is of the opinion
that, as at the date of this announcement the terms and conditions of the
transaction, as amended in accordance with this announcement and subject to the
terms and conditions of the initial opinion, are fair and reasonable to
shareholders. This updated opinion should be read in conjunction with the
amendments contained in this announcement and the letter issued by Merrill Lynch
South Africa (Proprietary) Limited to the board on 1 September 2005, the
contents of which were set out in the circular issued to shareholders on 5
September 2005. A copy of this updated opinion will be available for inspection
at the registered office of Metropolitan from the date of posting of the new
notice of general meeting.
The board of directors of Metropolitan has considered the amendments to the
terms of the transaction and is of the opinion that such changes are not
material and are fair and reasonable to shareholders. Accordingly the board
still recommends that shareholders vote in favour of the amended resolutions
required to implement the proposed transaction.
4. Withdrawal of notice to shareholders and reconvening of meeting
In order to allow shareholders sufficient time to consider the proposed changes
to the transaction, the general meeting of shareholders convened at 11:00 on
Wednesday, 5 October 2005 will be cancelled and a new general meeting of
shareholders will be convened to be held in the Auditorium, 7 Parc du Cap,
Mispel Road, Bellville, Cape Town, on Wednesday, 2 November 2005 at 11:00 for
the purpose of considering and, if deemed fit, passing with or without
modification, the resolutions required to implement the transaction.
Shareholders are advised that the notice to shareholders contained in the
circular of 5 September 2005 is hereby withdrawn and that a new notice of
meeting and proxy containing the changes outlined herein together with a copy of
this announcement will be posted to shareholders as soon as possible after the
publication of this announcement.
Shareholders who have not dematerialised their Metropolitan shares and
shareholders who have dematerialised shares in their own name and who are unable
to attend the general meeting, but wish to be represented thereat, will have to
complete the new form of proxy and return it to Metropolitan`s transfer
secretaries to be received by no later than 11:00 on Monday, 31 October 2005 in
accordance with the instructions contained therein. If shareholders have
dematerialised their Metropolitan shares with a CSDP (other than those
shareholders whose shareholding is recorded in their own name in the sub-
register maintained by their CSDP), they must arrange with the CSDP to provide
them with the necessary authorisation to attend the general meeting or they must
instruct their CSDP as to how they wish to vote at the meeting. This must be
done in terms of the custody agreement entered into between the shareholder and
the CSDP.
The transaction will be subject to the passing of all necessary resolutions by
the requisite majority of shareholders at the newly convened general meeting on
2 November 2005 and the registration thereof by the Registrar of Companies where
applicable by 11 November 2005.
5. Documents available for inspection
This announcement must be read together with the circular posted to shareholders
on 5 September 2005, which circular will be available for inspection by
shareholders at the registered office of Metropolitan, being 7 Parc du Cap,
Mispel Road, Bellville, Cape Town, as well as at the offices of Metropolitan`s
transfer secretaries in South Africa and Namibia at the addresses set out in the
table below:
In South Africa In Namibia
Ultra Registrars Transfer Secretaries
(Proprietary) Limited (Proprietary) Limited
11 Diagonal Street Shop 8, Kaiserkrone Centre
Johannesburg Post Street Mall
2001 Windhoek
(PO Box 4844, Johannesburg, (PO Box 2401, Windhoek)
2000) Telephone number: 09264 61
Telephone number: 011 834 227647
2266
In addition, the circular is available on Metropolitan`s website at
www.metropolitan.co.za or can be requested from the company secretary at the
registered office of Metropolitan.
The documents relating to the transaction that have been made available for
inspection by shareholders will continue to lie open for inspection until the
general meeting of shareholders on 2 November 2005.
6. Important dates and times
Posting of new notice of general meeting Friday, 30 September
of shareholders and proxy 2005
Announcement of the volume weighted
average trading price for the issue of the Wednesday, 19
`A2` and the `A3` Met prefs published on October 2005
SENS on
Announcement of the aforesaid volume
weighted average trading price published Thursday, 20 October
in the South African and Namibian press on 2005
Forms of proxy for the general meeting of
shareholders to be received by the Monday, 31 October
transfer secretaries by 11:00 on 2005
General meeting of shareholders to be held Wednesday, 2
at 11:00 on November 2005
Results of the general meeting Wednesday, 2
announcement published on SENS on November 2005
Results of the general meeting
announcement published in the South Thursday, 3 November
African and Namibian press on 2005
Expected date of issue of the `A2` and Friday, 11 November
`A3` Met prefs 2005
These dates and times are subject to change. Any such change will be released
on SENS and published in the press.
7. Material changes and litigation statement
Following the issue of the circular on 5 September 2005, Metropolitan published
its unaudited interim results for the six months ended 30 June 2005. As at the
date of this announcement, there have been no material changes in the financial
or trading position of Metropolitan and its subsidiaries since publication of
the latest unaudited interim results.
The board is not aware of any legal or arbitration proceedings that are pending
or are threatened which may have a material effect on the financial position of
the Metropolitan Group since the issue of the circular.
Cape Town
27 September 2005
Sponsor to Metropolitan in South Africa
Merrill Lynch South Africa (Pty) Limited
Sponsor to Metropolitan in Namibia
Simonis Storm Securities
Date: 27/09/2005 05:30:09 PM
Produced by the JSE SENS Department
