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ACH
ACH
Arch Equity Limited - Rch Equity Limited - Acquisition Of
Capitec Bank Holdings Limited"s Shares
Arch Equity Limited
Incorporated in the Republic of South Africa
Registration number 2004/004019/06
JSE share code: ACH ISIN: ZAE000061073
("Arch Equity" or "the company")
TERMS ANNOUNCEMENT IN RESPECT OF THE ACQUISITION BY ARCH
EQUITY OF 2 312 238 CAPITEC BANK HOLDINGS LIMITED
("Capitec") ORDINARY SHARES ("the Capitec acquisition")
1. IntroductionAs stated in Arch Equity"s Annual Report of
2005, Arch Equity is committed to increasing its stake in
Capitec. The Capitec acquisition therefore forms part of
this stated intention. Arch Equity has acquired 2 312 238
ordinary shares (or 3.2% of the issued ordinary share
capital) in Capitec ("the Capitec shares") with effect from
18 January 2006 ("the effective date") from the seller on
the terms and conditions as set out below.
2. The seller
Mayfair Speculators (Proprietary) Limited (Registration
Number 1987/003549/07) a private investment holding
company incorporated in the Republic of South Africa.
3. Rationale for the transactionThe acquisition is in line
with Arch Equity"s strategic investment objectives of
acquiring stakes in companies that are capable of
delivering strong organic growth and annuity cash flows.
The Capitec acquisition represents such an opportunity.
4. Terms of the transaction
4.1 Purchase consideration and mechanism
Arch Equity has acquired the Capitec shares for a
total purchase consideration of R72 824 500, which
will be paid by Arch Equity as follows:
4.1.1 Arch Equity will issue and allot 13 800 000
ordinary shares with a par value of 1 cent each in
the share capital of the company at 514 cents per
share ("the new Arch Equity shares") to the seller
on or about 15 February 2006, and will
simultaneously cause such shares to be listed on
AltX as soon as is reasonably possible thereafter.
The issue price of such shares represents a premium
of 5.9% to the volume weighted average price of Arch
Equity ordinary shares on the JSE Limited ("the
JSE") over the 30-day trading period up to and
including the effective date; and
4.1.2 Arch Equity shall pay the seller an amount in
cash equal to R1 892 500 ("the cash consideration")
on or about 15 February 2006.
4.2 Effective and implementation dates
The effective date of the Capitec acquisition is 18
January 2006, and all benefits and risks in respect
of the Capitec shares shall be deemed to have passed
to Arch Equity on such effective date. The
implementation date of the acquisition is 15
February 2006, being the anticipated listing date of
the new Arch Equity shares on AltX, and the transfer
date of the Capitec shares.
5. Description of CapitecCapitec is the listed holding
company of Capitec Bank Limited, which has established
itself as a retail bank providing accessible and low-cost
banking services to a client base in excess of 350 000
people. It has successfully made banking services
accessible to the majority of South Africans, at a
fraction of the banking costs usually associated
therewith. Capitec has demonstrated remarkable growth
since its listing and continues to benefit from South
Africa"s current economic climate.
6.Pro forma financial effects on Arch EquityThe pro forma
financial effects are presented for illustrative purposes
only and because of their nature may not give a fair
reflection of Arch Equity"s financial position nor of the
effect on future earnings after the Capitec acquisition.
Set out below are the unaudited pro forma financial
effects of the Capitec acquisition, based on the
unaudited consolidated financial results of Arch Equity
for the six months ended 31 August 2005. The directors
are responsible for these pro forma financial effects.
Unaudited Pro forma
Before After the
the
Capitec Capitec Percenta
acquisiti acquisiti ge
on on Change
(cents) (cents) (%)
Earnings per share 17.1 16.4 (3.9)
Headline earnings per share 19.9 19.0 (4.7)
Net asset value per share 186.0 214.8 15.5
Net tangible asset value per 186.0 214.8 15.5
share
Number of shares in issue 143,534 157,334 9.6
("000)
Weighted average number of 143,573 157,373 9.6
shares in issue ("000)
Notes to financial effects:
(1)The earnings and headline earnings per share figures
in the "Pro forma After the Capitec acquisition"
column have been calculated on the basis that the
transaction was effective on 1 March 2005 and based
on the following assumptions:
- A larger percentage of Capitec"s earnings and
headline earnings for the 6 month period was
equity accounted;
- The cash consideration would have earned
interest at an average after tax interest rate
of 5.8%; and
- The weighted average number of shares in issue
increased by the new Arch Equity shares.
(2)The net asset value and net tangible asset value per
share figures in the "Pro forma After the Capitec
acquisition" column have been calculated on the
basis that the transaction was effected on 31 August
2005 and based on the following assumptions:
- Arch
Equity"s net assets increased by the cost of the
Capitec shares less the cash consideration; and
- The
number of shares in issue increased by the new
Arch Equity shares.
Stellenbosch
13 February 2006
PSG Capital Limited (Designated Adviser)
Warning: The listing of ordinary shares in the company is on
ALTx. Investors are advised of the risks of investing in a
company listed on ALTx. Investors are advised that the JSE
does not guarantee the viability or the success of a company
listed on ALTx. In terms of the Listings Requirements, the
company is obliged to appoint and retain a Designated
Adviser, which is required to, inter alia, attend all board
meetings held by the company to ensure that all the Listings
Requirements and applicable regulations are complied with,
approve the
Financial Director of the company and guide the company in a
competent, professional and impartial manner. If the
company fails to retain a Designated Adviser, it must make
arrangements to appoint a new Designated Adviser within 10
business days, failing which the company faces suspension of
trading of its securities. If a Designated Adviser is not
appointed within 30 days of its suspension, the company
faces the termination of its listing without the prospect of
an appropriate offer to minority shareholders.
Date: 13/02/2006 05:25:10 PM Produced by the JSE SENS Department
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