| Mon 20 Nov 2006, 11:47 | | Cape Empowerment Trust - Acquisition and Further C |
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CAE
CAE
Cape Empowerment Trust - Acquisition and Further Cautionary
Cape Empowerment Trust Limited
(Incorporated in the Republic of South Africa)
(Registration number1998/014606/06)
Share code: CAE
ISIN: ZAE000016952
(Cape Empowerment Trust")
ACQUISITION BY CAPE EMPOWERMENT TRUST OF A 10% SHAREHOLDING IN PURPLE CAPITAL
LIMITED FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Cape Empowerment Trust is pleased to announce that it has entered into an
agreement in terms of which -
* Cape Empowerment Trust will acquire 16 104 056 new ordinary shares
in Purple Capital Limited ("Purple Capital") in exchange for the
issue of 16 104 056 new ordinary shares in Cape Empowerment
Trust ("Cape Empowerment Trust shares"); and
* Cape Empowerment Trust has granted Purple Capital the right to
acquire a further 7 781 230 Cape Empowerment Trust shares, either by
way of an issue of share for cash or in terms of a vendor placing of
shares by Cape Empowerment Trust in terms of a potential
acquisition, at a price of 84.48 cents per share, being within 10%
of the volume weighted average price of Cape Empowerment Trust
shares for the period 18 October 2006 to 10 November 2006,
("the transaction").
Upon implementation of the transaction Purple Capital will own 23 885 286
new Cape Empowerment Trust shares, being an effective interest of 10%,
and Cape Empowerment Trust will own 16 104 056 new ordinary shares in
Purple Capital, likewise being an effective 10% in the total issued share
capital of Purple Capital.
2. Rationale for the transaction
Shareholders have been advised that one of Cape Empowerment Trust"s areas
of investment focus will be financial services. The transaction
represents the first concrete step in the implementation of this
strategy.
Purple Capital is a JSE-listed niche independent financial services
group, with interests in corporate finance and asset management
businesses.
Cape Empowerment Trust has established a strategic cross-holding
investment and relationship with Purple Capital. Cape Empowerment Trust
not only believes that the investment in Purple Capital will yield good
returns over time, but that the transaction brings together complimentary
skills, networks, deal-flow and access to capital. The relationship will
specifically also provide Cape Empowerment Trust with further access to
deal-flow and deal execution capability in Gauteng.
3. Conditions precedent
The transaction is subject any approvals of the JSE and other regulatory
and shareholder approvals that may be required.
4. Financial effects
Set out in the table below are the unaudited pro forma financial effects
of the acquisition based on Cape Empowerment Trust"s published reviewed
interim results for the six months ended 30 June 2006. The unaudited pro
forma financial effects are the responsibility of the company"s directors
and have been prepared for illustrative purposes only, to provide
information on how the transaction may have impacted on the results and
financial position of Cape Empowerment Trust. Because of their nature,
the unaudited pro forma financial effects may not give a fair reflection
of Cape Empowerment Trust"s financial position after the transaction or
the effect on future earnings.
Before the After the %
transaction transaction Change
(1)
Earnings per share (cents) 12.5 11.1 (11.6)
Headline earnings per 12.5 11.1 (11.6)
share (cents)
Net asset value per share 71.0 72.6 2.2
(cents)
Net tangible asset value 54.1 57.6 6.5
per share (cents
Number and weighted 175 767 199 652
average number of shares
in issue (`000)
Notes:
1. Extracted from the published reviewed interim results of Cape
Empowerment Trust for the six months ended 30 June 2006.
2. Earnings and headline earnings per share in the "After the
transaction" column have been based on the following assumptions:
a. the transaction took place on 1 January 2006 for earnings and
headline earnings purposes, and on 30 June 2006 for net asset
value and net tangible asset value purposes;
b a total of 23 885 286 new ordinary Cape Empowerment Trust
shares are issued at 84.48 cents for the acquisition of 16 104
056 ordinary shares in Purple Capital and R6,6m in cash;
c. CET earned a net after tax return on surplus funds of 4.9%.
5. BEE status
It is of strategic importance to Cape Empowerment Trust that it remains a
broad-based black owned, controlled and managed company.
After the transaction the percentage of black ownership in Cape
Empowerment Trust will still exceed 50%. If, as a result of further
corporate action, the percentage of black ownership in Cape Empowerment
Trust falls below 50%, the company may have to conclude a further BEE
transaction. Cape Empowerment has agreed with Purple Capital that in such
event Umnombo Investment Holdings (Pty) Limited and DENOSA Investment
Holdings (Pty) Limited ("Umnombo-DIHOLD"), a broad-based grouping of
predominantly female nurses and healthcare workers with whom Purple
Capital has an existing relationship, will have the right to participate
in such transaction.
6. Further cautionary announcement
Cape Empowerment Trust remains involved in unrelated discussions and
negotiations which, if successfully concluded, may have an impact on the
price at which the company"s shares trade on the JSE. Accordingly, Cape
Empowerment Trust shareholders are advised to continue to exercise
caution in dealing with their Cape Empowerment Trust shares until a
further announcement has been published in this regard.
Cape Town
20 November 2006
Corporate advisor and sponsor
Sasfin Capital
(A Division of Sasfin Bank Limited)
Legal Advisor
Hofmeyr Herbstein & Gihwala Inc
Date: 20/11/2006 11:47:10 AM Produced by the JSE SENS Department
