| Thu 1 Mar 2007, 15:00 | | ELR/BPL - Eastplats/Barplats - Joint Announcement |
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BPL
BPL ELRLTD
ELR/BPL - Eastplats/Barplats - Joint Announcement
EASTERN PLATINUM LIMITED
(Incorporated in Canada)
(Canadian Registration number BC0722783)
Share code: ELR
ISIN: CA2768551038
("Eastplats")
BARPLATS INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004830/06)
Share code: BPL
ISIN: ZAE000028692
("Barplats")
JOINT ANNOUNCEMENT BY EASTPLATS AND BARPLATS IN RESPECT OF THE FIRM INTENTION
BY EASTPLATS TO MAKE AN OFFER TO ALL BARPLATS SHAREHOLDERS OTHER THAN THE
EASTPLATS SUBSIDIARIES AND THE BEE SHAREHOLDER
1. INTRODUCTION
Eastplats and Barplats shareholders are advised that Eastplats has
submitted to the board of directors of Barplats ("the Barplats Board") a
notice of its firm intention to acquire all the shares in the issued
ordinary share capital of Barplats ("Barplats shares"), other than those
already held indirectly by Eastplats through its wholly owned
subsidiaries, namely Brier Global Limited, Flower Valley Investments
Inc., and Rivercity Holdings Corporation ("the Eastplats subsidiaries")
and its BEE partner, Gubevu Consortium Investment Holdings (Proprietary)
Limited ("the BEE shareholder")("the offer").
The consideration payable in terms of the offer will be 0.98 of an
Eastplats common share ("share consideration")and 70 South African cents
("cash consideration") for every one Barplats share held ("the offer
price"). On this basis, the total consideration amounts to R10 797 471 in
cash and 15 116 460 Eastplats common shares.
The offer to be proposed by Eastplats will be implemented by way of a
scheme of arrangement in terms of section 311 of the Companies Act No. 61
of 1973, as amended ("the Companies Act")("the scheme"), to be proposed
by Eastplats between Barplats and all of its shareholders, other than the
Eastplats subsidiaries and the BEE shareholder ("the scheme members").
Should the scheme be implemented, Eastplats will acquire all of the
scheme members` issued shares ("scheme shares") being 15 424 959 Barplats
shares or approximately 5.0% of Barplats` shares, and Barplats` listing
on the JSE Limited ("JSE") will be terminated.
Simultaneously with such termination, Eastplats will list all of its
issued common shares on the JSE. The Eastplats common shares are already
listed on the Toronto Stock Exchange ("TSX") and the Alternative
Investment Market ("AIM")in London.
2. THE CONSIDERATION
Each scheme member registered on the envisaged record date of the scheme,
which is expected to be Friday, 25 May 2007, will be entitled to receive
the share consideration and the cash consideration.
The scheme consideration represents a premium of 45.1% to the 30-day
volume weighted average Barplats share price of R8.10 up to and including
Monday, 26 February 2007, a premium of 55.1% to the 60-day volume
weighted average Barplats share price of R7.58 up to and including
Monday, 26 February 2007, and a premium 28.5% to the last practicable
trading date prior to the publication of this announcement.
3. RATIONALE FOR THE OFFER
3.1 Background
Barplats is a Platinum Group Metals ("PGM") mining company, whose core
business is PGM mining and processing in South Africa`s world-renowned
Bushveld Igneous Complex ("BIC"). Its two main assets are its operating
mine, Crocodile River Mine ("CRM"), on the eastern portion of the western
limb of the BIC in the North West Province of South Africa, and the
Kennedy`s Vale Project ("Kennedy`s Vale Project") on the eastern limb of
the BIC, near Steelpoort in the Mpumalanga Province, South Africa.
Eastplats is engaged in the acquisition, development and mining of PGM
deposits in South Africa. Eastplats has built up expertise in project
development and applies such skills in bringing its projects to
production in a structured and professional manner.
Eastplats` goal is to achieve growth by acquisition rather than
exploration, and in achieving the aforementioned goal Eastplats has
acquired PGM deposits in the eastern limb of the BIC. These deposits
include the Mareesburg Project, which Eastplats successfully bid for in
February 2004, and the Spitzkop Project, in which Eastplats entered into
an agreement to acquire a controlling interest in October 2004.
On 28 April 2006, Eastplats acquired an indirect interest of 69% in
Barplats by way of the acquisition of 100% of the issued share capital in
the Eastplats subsidiaries, each of which holds approximately 23% of
Barplats outstanding shares ("the initial acquisition").
The Executive Director of the Securities Regulation Panel ("SRP") is of
the view that, based on his interpretation of the Code on Takeover and
Mergers and the Rules of the SRP ("the Code"), Eastplats was required to
make a mandatory offer to Barplats minority shareholders on the exact
same terms as the initial acquisition. At the time of the initial
acquisition, a legal opinion was obtained on behalf of Eastplats from a
South African law firm that a mandatory offer would not be required as a
result of the initial acquisition. Accordingly, in the interest of
minority shareholders, the SRP has agreed to allow the scheme to proceed
as proposed and detailed in this announcement, affording Barplats
minority shareholders the right to vote on the scheme. Further details
will be contained in the circular to be sent to Barplats shareholders in
terms of paragraph 10.
Should the scheme be implemented, the indirect and direct interest held
by Eastplats will increase to approximately 74%.
Rationale for Barplats ordinary shareholders voting in favour of the
scheme:
- given the very low liquidity and tradability of Barplats shares, it
is unlikely that scheme members will be able to realise value for
their investment if Barplats remains listed on the JSE;
- in amplification of the above, the JSE`s Listings Requirements as to
shareholders` spread are presently not being met by Barplats;
- the scheme presents an opportunity for scheme members to participate
in the future growth of the Eastplats group through receipt of
Eastplats shares;
- the costs of maintaining a separate primary listing of Barplats
substantially outweigh the benefits thereof as Eastplats is already
listed on the TSX and AIM;
- Eastplats is well positioned to assist Barplats financially in the
completion of its production expansion plans, which given the
volatility of the resource sector and Barplats` further capital
requirements, is not readily achievable by Barplats on its own;
- there is significant synergy for Barplats to grow under Eastplats`
financial resources in that the transaction will greatly enhance
Barplats` access to international capital markets, as already
demonstrated by the considerable investment by Eastplats in
Barplats` operations at CRM; and
- the scheme, if implemented, should enable Barplats to realise value
from its Kennedy`s Vale Project in a more timely and efficient
manner, being developed in part through the proposed mine at the
adjacent Spitzkop property controlled by Eastplats.
4. VOTING, OPINIONS AND RECOMMENDATIONS
The scheme is being proposed by Eastplats between all of the ordinary
shareholders of Barplats, other than the Eastplats subsidiaries and the
BEE shareholder. Accordingly, the Eastplats subsidiaries will not vote
their Barplats shares at the meeting of scheme members ("scheme
meeting").
The BEE shareholder has consented to being excluded from the scheme and,
accordingly, should the scheme become operative, the BEE shareholder will
remain invested in Barplats post the implementation of the scheme and the
de-listing of Barplats. The BEE shareholder may accordingly not vote its
Barplats shares at the scheme meeting.
Under the terms of the Code, the Barplats Board is required to provide
Barplats shareholders with a recommendation to either vote in favour, or
against, the resolutions to be proposed at the scheme meeting in order to
give effect to the scheme.
To this extent, the Barplats Board has formed a sub-committee for the
exclusive purpose of considering the terms and conditions of the offer,
and making a recommendation to the Barplats Board in respect of the
fairness and/or reasonableness thereof to Barplats shareholders ("the
Barplats sub-committee").
Also, in accordance with the SRP`s Code, the Barplats sub-committee has
appointed KPMG Services (Proprietary) Limited ("KPMG") as an independent
professional expert to consider the terms and conditions of the offer and
to advise the Barplats sub-committee.
The Barplats Board`s recommendation and KPMG`s opinion will be set out in
full in the circular to be posted to shareholders as contemplated in item
10 below.
5. CONDITIONS PRECEDENT
5.1 The making of the offer, and therefore the issuance of the circular
detailing the scheme, are subject to the fulfilment of the following
conditions precedent:
- the Barplats Board approving the offer and recommending same to the
Barplats shareholders;
- Eastplats obtaining the requisite South African Reserve Bank
("SARB") and exchange control approval for the simultaneous inward
dual listing of Eastplats on the JSE and the approval for the
utilisation of Eastplats script as part of the share consideration;
- Eastplats obtaining the JSE`s approval in respect of its inward dual
listing on the JSE;
- Eastplats obtaining the requisite Canadian regulatory approvals,
including without limitation, the approval of the TSX;
- the JSE, the SRP and the SARB approving the necessary documentation
to be distributed to the shareholders of Barplats; and
- the High Court of South Africa ("Court") ordering the convening of
the scheme meeting to approve the scheme.
5.2 The implementation of the scheme is subject to the fulfilment of the
following conditions precedent:
- the approval of the scheme by a majority of Barplats shareholders,
excluding the Eastplats subsidiaries and the BEE shareholder,
representing not less than three-fourths of the votes exercisable by
scheme members present and voting either in person or by proxy, at
the scheme meeting;
- the Court sanctioning the scheme in terms of the Companies Act; and
- the lodging of a certified copy of the Order of Court sanctioning
the scheme with, and registration by, the Registrar of Companies in
terms of the Companies Act.
6. RESERVATION OF RIGHTS
The terms of the scheme may, subject to the written consent of Eastplats,
be amended, varied or modified, provided that no such amendment,
variation or modification may have the effect of diminishing the rights
which will accrue to a scheme member in terms of the scheme.
7. CONFIRMATION OF SUFFICIENT FUNDS
The SRP has been provided with appropriate confirmation, in terms of its
requirements, that Eastplats has sufficient resources to discharge its
obligations in terms of the offer.
8. PRO FORMA FINANCIAL EFFECTS ON BARPLATS SHAREHOLDERS
The unaudited pro forma financial effects have been prepared for
illustrative purposes to provide information as to how the scheme might
affect Barplats ordinary shareholders. Due to their nature, the
unaudited pro forma financial effects may not provide a fair reflection
of Barplats ordinary shareholders` financial position or the effect of
income going forward in Barplats. The preparation of the unaudited pro
forma financial effects is the responsibility of the Barplats directors.
The report of Deloitte & Touche on the pro forma financial effects is set
out in full in the scheme circular to be posted to Barplats shareholders
as per item 10 below.
The table below sets out the unaudited pro forma financial effects of the
scheme on a Barplats shareholder:
Before After Change Change
the the (%)
scheme scheme (ZAR
(ZAR (ZAR cents)
cents) cents)
Market value per share 915.00 1,175.5 260.49 28.47%
and cash received1
Market value per share 810.00 1,175.5 365.49 45.12%
and cash received2
Market value per share 758.00 1,175.5 417.49 55.08%
and cash received 3
Earnings per share 6.82 53.9 47.08 690.31%
("EPS")4
Net asset value ("NAV") 118.04 1,175.5 1,057.45 892.84%
per share and cash
received5
Notes:
1 The "Before the scheme" column reflects the closing JSE market value
per Barplats share on Monday, 26 February 2007 being the last
practicable trading date preceding publication of the offer to the
Barplats shareholders. The "After the scheme" column shows the
consideration to be received per Barplats share, with the share
consideration component converted to South African cents, using the
Eastplats share price and R:C$ exchange rate at the close of trade
on Monday, 26 February 2007.
2 The "Before the scheme" column reflects the volume weighted average
JSE market value per Barplats share for the 30 days preceding the
publication of the offer to the Barplats shareholders. The "After
the scheme" column shows the consideration to be received per
Barplats share, with the share consideration component converted to
South African cents, using the Eastplats share price and R:C$
exchange rate at the close of trade on Monday, 26 February 2007.
3 The "Before the scheme" column reflects the volume weighted average
JSE market value per Barplats share for the 60 days preceding
publication of the offer to the Barplats shareholders. The "After
the scheme" column shows the consideration to be received per
Barplats share, with the share consideration component converted to
South African cents, using the Eastplats share price and R:C$
exchange rate at the close of trade on Monday, 26 February 2007.
4 The "Before the scheme" column reflects the EPS for the six months
ended 31 December 2006. The "After the scheme" column shows the
interest income that a Barplats shareholder would have earned had
the total cash consideration to be received per Barplats share been
invested at a six-month fixed deposit interest rate of 9% per annum,
compounded monthly, on 1 July 2006 for a period of 6 months
(assuming the share consideration component is converted to South
African cents, using the Eastplats share price and R:C$ exchange
rate at the close of trade on Monday, 26 February 2007).
5 The "Before the scheme" column reflects the NAV per share at 31
December 2006. The "After the scheme" column shows the
consideration to be received per Barplats share.
6 The possible implications of Capital Gains Tax and income taxation
have not been taken into account in the above calculations.
7 All pricing utilised in the above table is at close of business of
the respective stock exchanges on Monday, 26 February 2007.
9. IMPORTANT DATES AND TIMES
Notice of scheme meeting and Friday
Order of Court convening the 23 March 2007
scheme meeting published in the
South African press on
Last day to trade in Barplats Wednesday
ordinary shares on the JSE in 11 April 2007
order to be recorded in the
register to vote at the scheme
meeting, by the close of trade on
the JSE on (refer note 2 below)
Record date for voting on Wednesday
18 April 2007
Last day to lodge forms of proxy Thursday, 19 April 2007
for the scheme meeting (refer
note 5 below), by 10:00 on
Scheme meeting to be held at Friday, 20 April 2007
10:00 on
Results of the scheme meeting Friday, 20 April 2007
announced on SENS on
Results of the scheme meeting Monday, 23 April 2007
published in the South African
press on
Lodge scheme document at Court Thursday, 3 May 2007
Court hearing to sanction the Wednesday, 9 May 2007
scheme expected to be at 10:00
(or as soon thereafter as legal
counsel may be heard) on
Results of the application to the Thursday, 10 May 2007
Court to sanction the scheme
announced on SENS on
Results of the application to the Thursday, 10 May 2007
Court to sanction the scheme
published in the South African
press on
If the scheme is sanctioned and
implemented:
Order of Court sanctioning the Thursday, 10 May 2007
scheme registered by the
Registrar of Companies on or
about
Registration of Order of Court Friday, 11 May 2007
sanctioning the scheme announced
on SENS on or about
Last day to trade in Barplats Friday, 18 May 2007
ordinary shares on the JSE in
order to be recorded in the
register on the record date for
the scheme
Suspension of the listing of Monday, 21 May 2007
Barplats ordinary shares on the
JSE at the commencement of trade
on the JSE on
Eastplats common shares will be Monday, 21 May 2007
listed and trading will commence
on the JSE on
Record date for the scheme on Friday, 25 May 2007
which Barplats ordinary
shareholders must be recorded in
the register to receive the
scheme consideration by close of
business on
Operative date of the scheme from Monday, 28 May 2007
commencement of trade on the JSE
on
Scheme consideration will be made Monday, 28 May 2007
available to scheme participants
from
Share certificates in the name of Monday, 28 May 2007
Eastplats will be posted to
certificated scheme participants,
provided that their Barplats
share certificates have been
surrendered by no later than
12:00 on Friday, 25 May 2007, or
within 5 business days of
receipt, if received thereafter,
on or about
Cash consideration portion of the Monday, 28 May 2007
scheme consideration will be
posted to certificated scheme
participants, provided that their
Barplats share certificates have
been surrendered by no later than
12:00 on Friday, 25 May 2007, or
within 5 business days of
receipt, if received thereafter,
on or about
Dematerialised scheme Monday, 28 May 2007
participants will have their
accounts at their CSDP or broker
updated and credited on
Cash consideration portion of the Monday, 28 May 2007
scheme consideration will be
credited to dematerialised scheme
participants on
Termination of the listing of Tuesday, 29 May 2007
Barplats ordinary shares on the
JSE at the commencement of trade
on the JSE on
Notes:
1 Any variation of the above dates and times, as may be approved by
the SRP, JSE and/or the Court, will be released on SENS and
published in the South African press.
2. Barplats ordinary shareholders should note that, as trade in
Barplats ordinary shares on the JSE is settled through STRATE,
settlement for trade takes place five business days after such
trade. Therefore, Barplats ordinary shareholders who acquire
Barplats ordinary shares on the JSE after Wednesday, 11 April 2007
will not be eligible to vote at the scheme meeting.
3. Dematerialised scheme members, other than own-name dematerialised
scheme members, must provide their CSDP or broker with their
instructions for voting at the scheme meeting by the cut-off time
and date advised by the CSDP or broker for instructions of this
nature.
4. No dematerialisation or rematerialisation of Barplats ordinary
shares will take place after Friday, 18 May 2007.
5 The dates and times referred to above, refer to South African dates
and times.
10. FURTHER DOCUMENTATION
A circular providing further information on the scheme and containing,
inter alia, a notice of scheme meeting, a form of proxy and a form of
surrender, together with the Pre-listing Statement in respect of
Eastplats` listing on the JSE, will subject to the fulfilment of the
conditions for making of the offer, be posted to Barplats shareholders on
or about Friday, 23 March 2007.
Should Barplats shareholders have any queries in respect of any of the
above, they should kindly contact Mr Andre Geldenhuys of PSG Capital at
+27 21 8879602 or andreg@psgcapital.com, or alternatively Mr Wayne
Robinson of Barplats at +27 11 463 0050 or info@barplats.net.
Johannesburg
1 March 2007
Corporate Adviser to Eastplats - PSG Capital Limited
Sponsor to Barplats - Nedbank Capital Limited
Independent professional expert to Barplats -
KPMG Services (Proprietary) Limited
Auditors and reporting accountants to Eastplats - Deloitte & Touche
Registered Auditors (South Africa) and Deloitte & Touche LLP Chartered
Accountants (Canada)
Auditors and reporting accountants to Barplats - KPMG Registered
Accountants and Auditors Chartered Accountants (SA)
South African Attorneys to Barplats - Deneys Reitz
Date: 01/03/2007 15:00:00 Produced by the JSE SENS Department.
