| Wed 28 Sep 2005, 15:21 | | WB Holdings Limited - Disposal of all assets; With |
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WB Holdings Limited - Disposal of all assets; Withdrawal of cautionary
WB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1988/000570/06)
JSE code: WBH
ISIN: ZAE000007902
("WB Holdings" or "the company")
* THE DISPOSAL OF ALL ASSETS
* WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that WB Holdings has, on 27 September 2005, entered
into agreements, subject to certain conditions precedent, to dispose of all of
its assets, being its shareholding in Theewaterskloof Holdings (Proprietary)
Limited ("Theewaterskloof") for R19 million to its controlling shareholder, SGM
Investments (Proprietary) Limited ("SGM"), in terms of section 228 of the
Companies Act, Act 61 of 1973, as amended ("the Act") ("the disposal"). The
directors of WB Holdings propose that the proceeds of the disposal, after
taxation and transaction costs, be distributed to shareholders by means of a
special dividend of R1.92 per share ("the distribution").
The disposal and distribution constitute an affected transaction in terms of the
Securities Regulation Panel ("SRP") Code on Take-overs and Mergers ("the Code")
and a category 1 and related party transaction in terms of the JSE Limited
("JSE") Listings Requirements. Accordingly 50% of WB Holdings shareholders other
than SGM, which holds 80% of the issued share capital of WB Holdings, must
approve the disposal and distribution at a general meeting of the company
convened for the purpose of approving the disposal and the distribution ("the
general meeting").
It is the intention of SGM, subsequent to the disposal and distribution to
endeavour to dispose of its 80% shareholding in WB Holdings to a third party,
interested in the company as a listed vehicle. The minority shareholders will
continue to hold their investments in WB Holdings. In this regard shareholders
are reminded that should WB Holdings fail to comply with the JSE Listings
Requirements for cash shells or fail to enter into an agreement to acquire
viable assets and comply with the JSE Listings Requirements for bringing a new
company to listing its listing on the JSE will be suspended and may be
terminated.
2. RATIONALE
The WB Holdings group owns 3 farms that produce deciduous fruit, mainly for the
export market. As a direct result of the strengthening of the South African Rand
against the currencies of its main overseas trading partners, the business of WB
Holdings is performing increasingly poorly and will be requiring ongoing funding
support from its major shareholder for the foreseeable future.
Having regard to these circumstances and considerations the board of directors
of WB Holdings is of the opinion that it is no longer appropriate for WB
Holdings to conduct its business in a listed entity; that it is in the interest
of its shareholders that the operations and assets of WB Holdings should be
disposed of at fair value; and that the proceeds of the disposal should be
distributed to shareholders.
The disposal and distribution presents shareholders with an opportunity to
realise their investment in the business of WB Holdings at an attractive premium
of over 66% to the weighted average price at which the shares of the company
have traded on the JSE prior to the cautionary announcement relating to the
disposal. Minority shareholders will retain their interest in the WB Holdings
shell and may share in any benefit resulting from the sale of its shareholding
by SGM and the possible injection of new assets by its new controlling
shareholder.
3. PARTICULARS OF THE DISPOSAL
3.1 Terms of the disposal
3.1.1 Subject matter, disposal consideration and payment
WB Holdings shall, subject to the fulfilment of the conditions precedent set out
in 3.1.3 below, dispose of all its assets, being the shares in Theewaterskloof
to SGM for a net aggregate amount of R19 000 000.
The disposal consideration will be paid in cash to WB Holdings and will
thereafter be distributed to WB Holdings" shareholders net of taxation and costs
by means of a special dividend payment of R1.92 per share as set out in 3.1.8
below.
3.1.2 Effective date
The effective date of the disposal will be Thursday, 1 December 2005.
3.1.3 Suspensive Conditions
The disposal and distribution are subject to and conditional upon the following
conditions precedent:
3.1.3.1 approval of the disposal and distribution by the JSE, the SRP and the
South African Reserve Bank and other regulatory authorities that may be
required; and
3.1.3.2 approval of the disposal and distribution by WB Holdings shareholders,
other than SGM, at the general meeting as required by section 228 of the Act and
the JSE Listings Requirements.
3.1.4 Warranties
The disposal agreement contains no warranties other than that the assets
concerned are owned and can be sold by WB Holdings.
3.1.5 Related party
SGM is a related party to WB Holdings. Consequently the disposal and
distribution constitutes a related party transaction in terms of the Listings
Requirements of the JSE and requires written confirmation from an independent
professional expert acceptable to the JSE as to whether the terms and conditions
thereof are fair and reasonable to the WB Holdings minority shareholders. The
disposal and distribution further constitute an affected transaction in terms of
the Code and requires an independent opinion thereon by an appropriate external
advisor in terms of Rule 3.1 of the Code.
Moores Rowland has been appointed as the independent professional expert and has
concluded that the terms and conditions of the disposal and the resultant
distribution are fair and reasonable to WB Holdings minority shareholders. The
full text of the opinion will be included in the circular referred to in 5
below.
3.1.6 Opinions and recommendations
The independent director of the company has considered the terms and conditions
of the disposal and distribution and is of the opinion that they are beneficial
to the company and fair and reasonable to shareholders and recommended to the
directors that the disposal agreement is entered into. The directors
unanimously recommend that shareholders vote in favour of the resolutions to
implement the disposal and distribution at the general meeting.
3.1.7 The distribution
The directors of WB Holdings have resolved, subject to shareholder approval, to
distribute to shareholders the net cash proceeds of the disposal after taxation
and transaction costs, estimated at R18 048 000 or R1.92 per share, by way of a
special dividend.
3.1.8 Financial effects of the disposal and distribution
The following table and accompanying notes are the responsibility of the
directors of the company and set out the unaudited pro forma financial effects
of the disposal and distribution on a WB Holdings shareholder and certain JSE
comparative information. It has been prepared for illustrative purposes only
and because of its nature, may not give a fair reflection of the effect of the
disposal and distribution on a WB Holdings" shareholder.
Before After Change
%
(Loss)/Earnings per (192.8)(1) 8.1(3)
share (cents)
Headline (66.7)(1) 8.1(3)
(loss)/earnings per
share (cents)
Net asset value per 245.0(1) 192.0(4) (21.6)
share (cents)
Net tangible asset 245.0(1) 192.0(4) (21.6)
value per share (cents)
Weighted average share 115.0(2) 192.0(4)
price (cents)
Weighted number of 9 400 9 400
shares in issue (`000)
Number of shares in 9 400 9 400
issue (`000)
Notes:
1. Based on the published audited results of WB Holdings for the year ended 30
June 2005.
2. Thirty day weighted average trading price of one WB Holdings share up to 15
November 2004, the last date prior to publication of the first cautionary
announcement relating to the transaction.
3. For purposes of calculating the earnings and headline earnings per share it
was assumed that:
- the disposal and distribution were effected on 1 July 2004;
- interest at an after tax rate of 4.2% per annum was earned on the
distribution amount of R1.92 for the 12 months ended 30 June 2005;
- a tax rate of 30% was applied.
4. The special dividend of R1.92 distributed to WB Holdings shareholders.
4. SALIENT DATES
2005
Circular and notice of general meeting posted to
shareholders on Thursday, 27 October
Last day for lodging form of proxy by 10h00 on Thursday, 10 November
General meeting of WB Holdings shareholders at
10h00 on Monday, 14 November
Announcement of fulfilment or waiver of
conditions precedent and results of general
meeting Monday, 14 November
Announcement of fulfilment or waiver of
conditions precedent and results of general
meeting Tuesday, 15 November
Last day to trade in shares to be recorded in
the register of WB Holdings as a shareholder on
the record date in order to participate in the
distribution Friday, 25 November
Shares commence trading ex distribution Monday, 28 November
Record date for purposes of distribution Friday, 2 December
Pay date - distribution cheques posted or CSDP
or broker accounts updated on Monday, 5 December
Notes:
The above dates and times are subject to amendment and are dependent upon the
approval of WB Holdings shareholders of the resolutions set out in the notice of
general meeting being obtained and upon the fulfilment of the conditions
precedent. A further table of salient dates and times will be announced on SENS
and published in the press once the general meeting has taken place and the
actions to be taken by the company has been determined.
5. SHAREHOLDER APPROVAL AND GENERAL MEETING
A general meeting of shareholders will be held at WB Holdings, New Link Centre,
New Link Street, Paarl at 10h00 on Monday, 14 November 2005 for the purpose of
considering and, if deemed fit, passing, with or without modification, the
resolutions required to approve and implement the disposal and distribution, the
unbundling and offer. SGM will not be able to vote on any resolutions relating
to the disposal and distribution at the general meeting.
A circular setting out the details of the transactions and containing a notice
of general meeting will be posted to WB Holdings shareholders on or about
Thursday, 27 October 2005. A further announcement advising shareholders of the
results of the general meeting and confirmation of the salient dates will be
published after the general meeting on or about Monday, 14 November 2005.
6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Having regard to the details provided in this announcement, WB Holdings
shareholders are no longer required to exercise caution when dealing in their
shares on the JSE.
Cape Town
28 September 2005
Corporate Advisor and Sponsor
Sasfin Corporate Finance
A division of Sasfin Bank Limited
Independent Expert
Moores Rowland
Attorneys
Jan S de Villiers.
Reporting Accountants and Auditors
PricewaterhouseCoopers Inc
Date: 28/09/2005 03:00:35 PM
Produced by the JSE SENS Department
