| Tue 26 Sep 2006, 12:01 | | Beige - Acquisition of 10% minus one share in Qual |
|
BEG
BEG
Beige - Acquisition of 10% minus one share in Quality Products Mothebe
BEIGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/006871/06)
("Beige" or "the company")
ISIN Code: ZAE000034161 & Share code: BEG
Acquisition of 10% minus one share in quality products (Proprietary)
Limited ("Quality Products") from Mothebe Investments (Proprietary) Limited
("Mothebe")
1. Introduction
Further to the announcement dated 02 August 2006, regarding the
acquisition by Beige of Thebe Healthcare (Proprietary) Limited"s
("Thebe") 50% plus one share shareholding in Quality Products ("the
Thebe Swap-Up"), the directors of Beige are pleased to announce the
signing of an agreement with Mothebe in terms of which Beige will
acquire Mothebe"s 10% minus one share shareholding in Quality Products
("the Mothebe Swap-Up"). The agreement, dated 21 September 2006, but
effective from 01 April 2006, results in Beige increasing its
shareholding in Quality Products from 40% to 50% minus one share, with
immediate effect. This shareholding will increase to 100% should all
the remaining conditions precedent in respect of the Thebe Swap-Up be
fulfilled.
The consideration for the Mothebe Swap-Up is R2 969 975.15 and will be
settled through the issue of 17 908 865 shares in Beige at an issue
price of 11 cents per share and the immediate settlement of a R1 000
000 loan made by Beige to Mothebe, which loan was previously to be
settled from dividends received from Quality Products.
2. Rationale for the transaction
Quality Products is a leading soap, household products and toiletries
manufacturer that provides an exclusive contract manufacturing and
packing service to branded pharmaceutical, cosmetics, toiletries and
home-care markets. During July 2005, Beige announced the acquisition
of Quality Products in conjunction with its partners, Thebe and
Mothebe, which acquisition resulted in Beige holding an initial 40%
interest in Quality Products ("the Acquisition Announcement") and
Quality Products becoming the most significant black-empowered
contract manufacturing company in the household bath and body care
market.
As was stated in the Acquisition Announcement, it was the intention of
Beige, Thebe and Mothebe to extend this empowerment transaction to
Beige after a 5-year period. However, as a result of the pleasing
performance of Quality Products, the day-to-day management of which
has been under the direction of Beige, both Thebe and Mothebe have
elected to swap-up their shareholding in Quality Products into Beige
immediately.
3 Financial Effects of the acquisition
The table below summarises the pro forma financial effects of the
acquisition of an additional 10% minus one share in Quality Products
on the audited, published results of Beige for the 13-month period
ended 31 March 2006, as though the acquisition had been in effect from
01 April 2005, and is the responsibility of the directors. The pro
forma financial effects have been prepared for illustrative purposes
only and due to their nature, may not fairly present Beige"s financial
position, changes in equity, results of operations or cash flows.
Fully diluted Published Pro Forma Change
information Audited Results for (%)
Results for the 13-month
the 13-month period ended
period ended 31 March 2006
31 March 2006 after the
Acquisition of
10% minus 1
share in
Quality
Products
Attributable earnings 0.09 0.30(2) 254.8%
per share (cents)
Headline earnings per 0.08 0.30(2) 254.8%
share (cents)
Net asset value (cents) 6.11 6.50(3) 5.6%
Tangible net asset value 5.63 6.02(3) 6.0%
per share (cents)
Weighted average no. of 386 390 000 404 298 865(4) 4.6%
shares in issue (`000)
Shares in issue at year 575 604 583 593 513 448(4) 3.1%
end (`000)
Notes:
1 The "before" column is extracted from the audited financial
information published by Beige for the 13-month period ended 31
March 2006.
2 The "after" column reflects adjustments to the Beige results to
include 10% of Quality Products for the 7 months ended 31 March
2006, after increasing the income from associate relating to
Quality Products for the period commencing 01 September 2005,
being the date of acquisition of Quality Products. In addition,
the actual interest earned on the Mothebe loan has been reversed,
net of adjustment for notional taxation at 29%.
3 The "after" column reflects adjustments to the Beige balance
sheet as at 31 March 2006 for Quality Products balance sheet at
31 March 2006, adjusting for the acquisition of the Mothebe
interest in Quality Products, which is settled by the issue of
new shares in Beige and the extinguishing of the liability of R1
000 000 owed to Beige by Mothebe.
4 The weighted average shares and shares in issue at period end
have been increased by the number of shares to be issued to
Mothebe pursuant to this transaction.
4. Conditions Precedent
The company has now received formal confirmation that Competition
Commission approval for the Thebe and Mothebe swap-up transactions is
not required. All the conditions precedent relating to the Mothebe
Swap-Up have accordingly been fulfilled and the swap-up will be
implemented immediately.
The Thebe Swap-Up remains subject to shareholder approval and a
circular incorporating a notice of general meeting at which the
resolutions required to implement the Thebe Swap-Up will be proposed
is in the process of being prepared and will be posted to shareholders
within 28 days of this announcement.
Should all the conditions precedent relating to the Thebe Swap-Up be
fulfilled, Quality Products will become a 100% held subsidiary of
Beige. The articles of association of Quality Products will
accordingly be amended so as to conform to the current articles of
association of Beige and the JSE Listings Requirements.
5. Reminder of Cautionary Announcement
Shareholders are reminded that, notwithstanding this announcement,
Beige remains in negotiations, which, if successfully concluded, may
have a material effect on the price at which it securities trade on
the JSE Limited. Shareholders are accordingly advised to continue to
exercise caution until a further announcement is made in this regard.
In accordance with AltX Listings Requirements, shareholders are
advised of the risks of investing in a company listed on AltX and are
advised that the JSE does not guarantee the viability or the success
of a company listed on AltX. In terms of JSE Listings Requirements a
Designated Adviser has to be retained by the company. The Designated
Adviser is required to, inter alia, attend all board meetings held by
the company to ensure that all JSE 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 an offer to minorities.
Johannesburg
22 September 2006
Designated Advisor
Arcay Corporate Services
Corporate Advisor
Arcay Merchant
Date: 26/09/2006 12:01:10 PM Produced by the JSE SENS Department
