| Wed 30 Nov 2005, 17:40 | | m Cubed - Disposal Of M Cubeds Intrest In Advantag |
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m Cubed - Disposal Of M Cubed"s Intrest In Advantage Asset Managers (Pty) Ltd
m Cubed Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1998/014568/06)
Share code: MCU & ISIN: ZAE000033353
("m Cubed" or "the company")
Disposal of m Cubed"s interest in advantage asset managers (Proprietary) Limited
("advantage")
1. Introduction
1.1 Shareholders are referred to the announcement of 17 November 2005
regarding the disposal by the company of its entire interest in
Advantage to Momentum International Multi-Managers (Proprietary)
Limited ("Momentum") for a cash consideration of R140 million ("the
disposal").
1.2 Advantage is a joint venture between m Cubed and Momentum and provides
multi-manager asset management, structured products and other
services, primarily to the institutional sector.
2. Rationale for disposal and future direction
2.1 The disposal represents a continuation of the process of unlocking and
realising value for m Cubed shareholders.
2.2 After implementation of the disposal, m Cubed will substantially be a
cash shell. Its remaining business interests will comprise mainly
Specialised Investments, which provides customised investment
solutions for institutions, corporates and high net worth individuals,
and Specialised Lending, which provides bespoke lending solutions to
high net worth individuals and corporates who invest with m Cubed,
which businesses the company is in the process of exiting.
2.3 mCubed"s focus remains on unlocking value for shareholders by
disposing of the remaining businesses. Pending resolution and/or
finalisation of the dispute referred to in paragraph 4.3, which may be
protracted, available cash resources will be distributed to
shareholders from time to time.
3. Conditions Precedent
The disposal is subject to the approval of m Cubed shareholders at a
general meeting and applicable regulatory authorities.
4. Financial Effects
4.1 Set out below are the pro forma financial effects of the disposal 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 disposal was effective for the 6 months ended 31 August
2005; and
- the proceeds of the disposal has 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 disposal was effected on 31 August
2005.
Unaudited Pro forma Pro Cumulative
Before After the forma Change
(cents) (1) prior After After the
disposals the disposal
(2) disposal (%)
(cents) (cents)
(6)
Earnings per share 3,4(3) 5,5 15,9 367,6
Headline earnings 2,5(4) 1,1 0,5 (80,0)
per share
Net asset value per 49,7 49,5(5)(7) 59,3 19,3
share
Tangible net asset 38,3 49,5(5)(7) 59,3 54,8
value per share
Notes
(1). Extracted from the unaudited interim financial results of m
Cubed for the 6 months ended 31 August 2005.
(2). The prior disposals are the disposals by the company of the
entire issued share capitals in (and in certain circumstances,
claims against) m Cubed Life Limited and associated divisions,
Automated Outsourcing Services Limited, m Cubed Unit Trust
Management Company Limited, m3 Capital Management (Guernsey)
Limited and Policy Exchange (Proprietary) Limited, as further
set out in the circular to shareholders dated 17 November 2005.
(3). Based on a weighted average number of 735,985 million m Cubed
shares in issue during the 6 months ended 31 August 2005 and on
an attributable profit of R25,092 million for the period then
ended.
(4). Based on a weighted average number of 735,985 million m Cubed
shares in issue during the 6 months ended 31 August 2005 and on
headline earnings of R18,581 million for the period then ended.
(5). Includes m Cubed"s interest in Advantage at a carrying value of
R62,253 million.
(6). Any potential liability arising in respect of 4.3 below and all
closure costs cannot presently be determined and have not been
included in the above calculations.
4.2 The financial effects contained in table 4.1 above are the responsibility
of the directors and:
4.2.1 have been prepared for the purposes of illustrating how the
disposal 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
disposal 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
disposal and estimated Capital Gains Tax implications.
4.3 Shareholders are specifically cautioned that the company is still in
negotiations regarding the dispute referred to in the cautionary
announcement of 28 October 2005 and the Interim Results announcement of 29
November 2005. The potential claims and/or demands of the regulator, which
are disputed by the company, have not been taken into account in the
financial effects calculation contained in table 0 above. The process is
currently one of settlement and the directors are not in a position to
determine if, when and upon what basis matters will be settled, or the
actual amount, if any, of any potential liability that may arise.
The company accordingly advises shareholders to continue to exercise
caution when trading in its shares.
5. CIRCULAR TO SHAREHOLDERS
A circular to m Cubed shareholders containing details of the disposal and
notice of a general meeting to be convened for purposes of shareholder
approval of the disposal as a category 1 disposal in terms of the Listings
Requirements of the JSE Limited ("JSE") will, subject to the approval of
the JSE, be mailed to shareholders within 28 days of this announcement or
within such longer period as the JSE may allow in the circumstances.
Johannesburg
28 November 2005
Corporate adviser and sponsor
PSG CAPITAL
Reporting accountants and auditors
- PKF -
Legal adviser
- JAN S. DE VILLIERS ATTORNEYS -
Date: 30/11/2005 05:40:21 PM Produced by the JSE SENS Department
