| Thu 30 Nov 2006, 17:29 | | Dynamic - Acquisition And Further Cautionary Annou |
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DYM
DYM
Dynamic - Acquisition And Further Cautionary Announcement
Dynamic Cables RSA (Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/001807/06)
Share Code: DYM
ISIN: ZAE000028270
("Dynamic")
ACQUISITION OF A FURTHER 14.66% INTEREST IN SANCINO PROJECTS LIMITED
FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to recent announcements by Dynamic regarding its intention to
acquire further interests in Grand Parade Investments Limited ("GPI"),
Dynamic is pleased to announce that it has concluded an agreement with
the directors and management of Sancino Projects Limited ("Sancino"),
which holds an approximate 11% shareholding in GPI, to acquire their
approximately 14.66% interest in Sancino ("the Transaction").
2. Background and rationale
With a shareholding of approximately 11%, Sancino is the second
largest shareholder in GPI.
Sancino is presently owned by Cape Empowerment Trust Limited ("CET")
(27.72%), Sanlam Life Insurance Limited ("Sanlam") (40.59%), public
shareholders (17.03%) and Kovacs Investments No 753 (Proprietary)
Limited ("Kovacs")(14.66%).
Kovacs is a company owned by the directors and management of Sancino,
namely C Sonn, R Moonsamy, M Henkel, G Golding and R Wiliams ("the
Vendors").
In terms of the Transaction, Dynamic will acquire from the Vendors all
of the shares in the capital of and all claims on loan account against
Kovacs.
The Sancino shares held by Kovacs, together with the Sancino shares
held by CET (and which are to be acquired by Dynamic, together with
certain other GPI interests, in terms the transaction announced in the
press on 2 November 2006), represent 42.38% of the total number of
issued shares in the capital of Sancino.
The effective GPI interest owned by Kovacs and acquired in terms of
the Transaction is 1.6%, and brings to 8.27% the effective GPI
interests to be acquired by Dynamic in terms of transactions already
concluded and announced.
According to Dynamic"s estimates, the total nominal shareholding in
GPI effectively to be controlled by Dynamic as a result of the
Transaction and the other transactions, already concluded and
announced, is 14.28%.
3. Terms and conditions
In terms of an agreement entered into between Dynamic and the Vendors
on 29 November 2006, Dynamic will purchase from the Vendors all of the
shares in the capital of and all of the shareholders claims on loan
account against Kovacs.
The total consideration price payable in terms of the Transaction is R
14 525 762.
Dynamic shall pay such consideration by way of the allotment and issue
of 11 620 610 new shares in the capital of Dynamic ("Dynamic Shares")
at a price of R1.25 per Dynamic Share.
The Transaction is categorised as a category 3 transaction in terms of
the JSE Listings Requirements, is not subject to any suspensive
conditions, and will be implemented immediately.
The Vendors have given limited warranties in respect of the subject
matter of the sale and in respect of Kovacs.
4. The Code
In terms of the Securities Regulation Code on Takeovers and Mergers,
the acquisition by Dynamic of the shares in Kovacs in terms of the
Transaction may constitute an "affected transaction" in respect of
Sancino, and Dynamic may be obliged to extend a mandatory offer to the
other shareholders of Sancino and to acquire their shares on similar
terms.
If and when such offer is to be made, Dynamic shall publish a suitable
announcement.
5. Financial effects
Set out in the table below are the unaudited pro forma financial
effects of the Transaction based on Dynamic"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 Dynamic. Because of their nature,
the unaudited pro forma financial effects may not give a fair
reflection of Dynamic"s financial position after the Transaction or
the effect on future earnings.
Before the After the % Change
transaction transaction
(1)
Earnings per share 8.8 7.5 -14.6
(cents)
Headline earnings per 8.8 7.5 -14.6
share (cents)
Net asset value per 46.3 58.0 25.3
share (cents)
Net tangible asset value 32.5 46.2 42.2
per share (cents)
Number and weighted 66 800 78 421 17.4
average number of shares
in issue (`000)
Notes:
1. Extracted from the published reviewed interim results of Dynamic 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. The only asset of Kovacs is its investment of 1 133 718 shares in
Sancino and therefore no earnings have been taken into account as
no dividends were received by Kovacs.
c. Dynamic acquires a 100 % shareholding in Kovacs for R 14 525 762
settled by way of an issue of 11 620 610 new Dynamic shares
6. Further cautionary announcement
Dynamic remains involved in other 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, Dynamic
shareholders are advised to continue to exercise caution in dealing
with their Dynamic shares until a further announcement has been
published in this regard.
Cape Town
30 November 2006
Corporate advisor and sponsor
Sasfin Capital
(A Division of Sasfin Bank Limited)
Date: 30/11/2006 05:29:09 PM Produced by the JSE SENS Department
