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CDZ
CDZ
Cadiz Holdings Limited - Acquisition And Withdrawal Of Cautionary Announcement
Cadiz Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1997/007258/06
JSE share code: CDZ & ISIN: ZAE000017661
("Cadiz" or "the Company")
ACQUISITION BY CADIZ HOLDINGS LIMITED OR ITS NOMINEE OF 100% OF
AFRICAN HARVEST FUND MANAGERS (PROPRIETARY) LIMITED ("AHFM")
AND AFRICAN HARVEST COLLECTIVE INVESTMENTS LIMITED ("AHCI")
("THE TRANSACTION") AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the Company"s announcement on Monday, 4 September 2006 ("the
earlier announcement"), Investec Bank Limited is authorised to announce the
unaudited pro forma financial effects of the transaction on the Company.
Shareholders are advised to consider the contents of this announcement
together with the earlier announcement.
2. UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The table below sets out the unaudited pro forma financial effects of
the transaction on Cadiz based on the assumptions set out below. The pro forma
"After" column has been provided for illustrative purposes only and, because
of its nature, may not give a true picture of Cadiz"s financial position or
results of its operations post the transaction. The pro forma financial
information is the responsibility of the Cadiz board.
Unaudited Unaudited
Actual Pro forma Change
Notes "Before"(1) "After" %
Earnings per
share (cents) ("EPS")
- basic (2) 29.5 27.3 (7.5)
- diluted (2) 27.1 25.1 (7.4)
Headline earnings
per share (cents) ("HEPS")
- basic (2) 30.2 28.0 (7.3)
- diluted (2) 27.8 25.8 (7.2)
Core earnings
per share (cents) ("CEPS")
- basic (2), (3) 30.2 29.6 (2.0)
- diluted (2), (3) 27.8 27.2 (2.2)
Net asset value
per share (cents) ("NAV") (4) 178.7 178.7 -
Net tangible asset value
per share (cents) ("TNAV") (4) 161.8 26.8 (83.4)
Notes:
1. As per the published unaudited interim results of Cadiz for the six
months ended 30 June 2006.
2. The EPS, HEPS and CEPS as set out in the Pro forma "After" column of the
table are based on the combined unaudited published income statement of Cadiz
and the unaudited management accounts of AHFM and AHCI for the six months
ended 30 June 2006, after adjusting for the following:
2.1 investment income for the 6 months has been reduced by an after tax
amount of R15,699,000 calculated as follows:
2.1.1 the interest rate on the deferred portion of the purchase price is 7.39%
per annum based on the agreement entered into with the parties concerned;
2.1.2 the interest rate of the facility used to finance the additional working
capital requirements of the group is 6.72% based on the agreement with the
funder, together with a facility fee of R500 000;
2.1.3 it is assumed that the purchase price payable within the first six
months, including estimated transaction costs of R1 500 000, will be settled
proportionately out of the cash and cash equivalents and financial assets in
existence as at 1 January 2006 and the interest income, net income from
investments and foreign exchange gains have been adjusted accordingly;
2.1.4 the assumed investments realised in order to settle the purchase price
as at 1 January 2006 may have been different at the time and it should be
noted that the above adjustment of R15 699 000 would have been R7 319 000 had
foreign exchange gains not been included and the resultant impact would have
been as follows:
2.1.4.1 Basic EPS "After" 31.3 cents, up 6.1%
2.1.4.2 Basic HEPS "After" 32.0 cents, up 6.0%
2.1.4.3 Core EPS "After" 33.6 cents, up 11.3%
2.2 includes a R3 235 000 after tax cost in respect of amortisation of the
identified intangible assets acquired as part of the transaction;
2.3 excludes a R2 519 000 after tax cost of the phantom "B" share scheme as
this scheme will be terminated in terms of the transaction;
2.4 excludes the R1 633 000 after tax salary cost of specific staff
identified to be excluded from the transaction;
2.5 includes a R177 000 after tax loss transferred from Non-Distributable
Reserves to the income statement to bring the accounting policy for the
treatment of gains and losses on Investments in line with that of Cadiz.
3. CEPS are based on EPS adjusted for the amortisation of intangibles and
goodwill impairment and has been introduced to enable the shareholders to
better understand the impact of the transaction.
4. The NAV and NTAV as set out in the Pro forma "After" column of the table
are based on the combined unaudited balance sheets of Cadiz, AHFM and AHCI as
at 30 June 2006, after adjusting for the following:
4.1 the net asset value has been increased by R2 519 000 in respect of the
phantom "B" share scheme referred to in 2.3 above;
4.2 actual NAV as at 30 June 2006 has been increased by R4 632 000 to R17
million as the transaction agreement allows for a purchase price adjustment
should the NTAV be lower than R17 million at the effective date. The purchase
price has not been adjusted as it is probable that the NTAV will exceed R17
million at the effective date.
3. WITHDRAWAL OF CAUTIONARY
Further to the earlier announcement, shareholders are advised that, as a
result of the publication of the pro forma financial effects of the
transaction, caution is no longer required to be exercised by shareholders
when dealing in their Cadiz shares.
Cape Town
11 September 2006
Sponsor
Investec Bank Limited
(Registration number 1969/00473/06)
Attorneys
Cliffe Dekker
Advisor
Cadiz
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Date: 11/09/2006 09:44:05 AM Produced by the JSE SENS Department
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