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(resend)aeci - Recommendation Of Proposed Sasol Offers

Release Date: 05/06/1998 16:06:08      Code(s): AFE AED5AFEP
AECI LIMITED
(REGISTRATION NUMBER 04/02590/06)
RECOMMENDATION OF PROPOSED SASOL OFFERS
THE BOARD OF AECI LIMITED ("AECI" OR "THE COMPANY") HAS BEEN NOTIFIED BY SASOL
LIMITED ("SASOL") OF ITS INTENTION TO ACQUIRE THE ENTIRE SHARE CAPITAL OF AECI.
THE PRINCIPAL TERMS AND CONDITIONS OF THE OFFERS ARE AS FOLLOWS:
- A CASH CONSIDERATION OF R30,00 FOR EACH AECI ORDINARY SHARE OF R1 EACH ("AECI
SHARE") EX THE AECI INTERIM DIVIDEND FOR THE SIX MONTHS ENDING 30 JUNE 1998
PLUS AN ADDITIONAL AMOUNT EQUAL TO THE INTEREST THAT WOULD HAVE BEEN EARNED ON
R30,00 PER AECI SHARE CALCULATED FROM 1 JULY 1998 TO THE DATE OF PAYMENT ("THE
ORDINARY OFFER").
- A CASH CONSIDERATION OF GBP1,05 FOR EACH PREFERENCE SHARE OF R2 EACH ("THE
PREFERENCE OFFER").
APPROVAL BY THE COMPETITION BOARD, THE JOHANNESBURG STOCK EXCHANGE, THE
SECURITIES REGULATION PANEL AND THE HIGH COURT OF SOUTH AFRICA.
SASOL HAS PROPOSED THAT THE ORDINARY OFFER AND THE PREFERENCE OFFER (TOGETHER
THE OFFERS") BE IMPLEMENTED BY MEANS OF SCHEMES OF ARRANGEMENT IN TERMS OF
SECTION 311 OF THE COMPANIES ACT 1973, AS AMENDED ("THE SCHEMES"), BETWEEN AECI
AND ITS SHAREHOLDERS WHICH, IF IMPLEMENTED, WOULD RESULT IN SASOL OR ITS
NOMINEE ACQUIRING THE ENTIRE ORDINARY AND PREFERENCE SHARE CAPITALS OF AECI.
THE COMPANY HAS BEEN NOTIFIED THAT SHAREHOLDERS WHO IN AGGREGATE OWN
APPROXIMATELY 75% OF AECI`S ISSUED ORDINARY SHARE CAPITAL HAVE UNDERTAKEN TO
VOTE IN FAVOUR OF THE SCHEME IN RESPECT OF THE AECI SHARES AND IN FAVOUR OF ANY
SPECIAL AND ORDINARY RESOLUTIONS AT ANY GENERAL MEETING OF AECI SHAREHOLDERS
CONVENED TO GIVE EFFECT TO THAT SCHEME.
THE BOARD OF AECI APPOINTED ING BARINGS TO ADVISE IT ON THE VALUE OF THE
COMPANY AND OF THE MERITS OF ANY OTHER PROPOSALS THAT MAY BE PUT TO
SHAREHOLDERS. ING BARINGS HAS UNDERTAKEN A DETAILED VALUATION OF THE COMPANY
UTILISING, INTER ALIA, DISCOUNTED CASH FLOW, COMPARABLE TRANSACTIONS AND
COMPARABLE QUOTED COMPANIES` ANALYSES, HAVING REGARD, INTER ALIA, TO THE
PREVAILING ECONOMIC AND MARKET CONDITIONS OF THE INDUSTRIES IN WHICH THE AECI
GROUP COMPANIES OPERATE AND THE INFORMATION AND ASSUMPTIONS MADE AVAILABLE BY
AND DISCUSSED WITH THE MANAGEMENT OF AECI.
ING BARINGS ALSO REVIEWED A PROPOSAL FROM THE EXECUTIVE DIRECTORS WHICH
INVOLVED A MAJOR RESTRUCTURING OF AECI IN ORDER TO REALISE SHAREHOLDER VALUE
("THE PROPOSED RESTRUCTURING"). THIS WOULD HAVE INVOLVED THE EXIT FROM AECI`S
COMMODITY CHEMICALS BUSINESSES, WITH THE NET PROCEEDS DISTRIBUTED TO
SHAREHOLDERS, AND A REFOCUSING OF AECI`S PORTFOLIO ON SPECIALITY CHEMICALS,
EXPLOSIVES, SPECIALITY FIBRES AND INDUSTRIAL MATERIALS. ING BARINGS` CONCLUSION
IS THAT THE PROPOSED RESTRUCTURING SHOULD RESULT IN SHAREHOLDERS ACHIEVING A
VALUATION FOR THEIR AECI SHARES MATERIALLY IN EXCESS OF R30 PER AECI SHARE OVER
A PERIOD OF TIME.
THE DIRECTORS NOTE, HOWEVER, THAT SASOL HAS ALREADY RECEIVED IRREVOCABLE
UNDERTAKINGS TO ACCEPT THE ORDINARY OFFER AND TO VOTE IN FAVOUR OF ANY
RESOLUTIONS TO IMPLEMENT THE SCHEME IN RESPECT OF THE AECI SHARES FROM
SHAREHOLDERS WHO OWN IN AGGREGATE APPROXIMATELY 75% OF THE ISSUED ORDINARY
SHARE CAPITAL OF AECI.
ACCORDINGLY, GIVEN THAT THE CASH CONSIDERATION IN RESPECT OF THE OFFERS IS
EXPECTED TO BE PAID WITHIN A RELATIVELY SHORT PERIOD OF TIME, THE WISH OF THE
MAJORITY OF SHAREHOLDERS TO ACCEPT THE ORDINARY OFFER AND IN THE ABSENCE OF A
HIGHER OFFER FOR THE COMPANY, THE DIRECTORS, WHO HAVE BEEN SO ADVISED BY ING
BARINGS AFTER TAKING INTO ACCOUNT THE DIRECTORS` COMMERCIAL ASSESSMENTS,
RECOMMEND SHAREHOLDERS TO ACCEPT THE OFFERS AND TO VOTE IN FAVOUR OF ANY
RESOLUTIONS PROPOSED TO GIVE EFFECT TO THE SCHEMES. MR AXELSON AND
MR SMITH, WHO ARE THE ONLY DIRECTORS WHO OWN AECI SHARES, DO NOT INTEND TO VOTE
AT ANY MEETING CONVENED TO IMPLEMENT THE SCHEME IN RESPECT OF THE AECI SHARES
IN RESPECT OF THEIR OWN BENEFICIAL HOLDINGS, AMOUNTING IN TOTAL TO 750 AECI
SHARES.
IN THE EVENT THAT THE SCHEMES DO NOT BECOME WHOLLY UNCONDITIONAL, THE BOARD OF
AECI HAS THE INTENTION TO INITIATE THE PROPOSED RESTRUCTURING.
JOHANNESBURG
5 JUNE 1998
FINANCIAL ADVISOR
ING BARINGS
SPONSORING BROKER
ING BARINGS SOUTHERN AFRICA
(PROPRIETARY) LIMITED
(MEMBER OF THE JOHANNESBURG STOCK EXCHANGE)
(REGISTRATION NUMBER 94/04352/07)



                                        
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