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Proposed Acquisition By Sasol Of Polifin Limited

Release Date: 02/08/1999 08:26:13      Code(s): SOL SOLDPIN
SASOL LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 79/03231/06)
("SASOL")
POLIFIN LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 93/07886/06)
("POLIFIN")
PROPOSED ACQUISITION BY SASOL CHEMICAL INDUSTRIES LIMITED ("SCI") OF ALL OF THE
SHARES IN POLIFIN LIMITED OTHER THAN THOSE ALREADY OWNED BY SCI
1. INTRODUCTION
FURTHER TO THE CAUTIONARY ANNOUNCEMENT PUBLISHED ON 1 JULY 1999 SASOL WISHES TO
ANNOUNCE THAT, SUBJECT TO THE CONDITIONS SET OUT BELOW, SASOL'S WHOLLY-OWNED
SUBSIDIARY, SCI, WHICH CURRENTLY OWNS 50,15% OF POLIFIN, WILL MAKE A PROPOSAL
("THE ACQUISITION PROPOSAL") TO ALL THE POLIFIN SHAREHOLDERS OTHER THAN SCI
("SHAREHOLDERS") FOR THE ACQUISITION (WHETHER BY MEANS OF SCHEME OF ARRANGEMENT
OR TAKE-OVER OFFER) OF THE ENTIRE ISSUED SHARE CAPITAL OF POLIFIN. THE
MECHANICS TO BE ADOPTED IN TERMS OF THE ACQUISITION PROPOSAL WILL BE ANNOUNCED
AS SOON AS A FINAL DECISION HAS BEEN MADE IN THIS REGARD. AECI HAS GIVEN AN
UNDERTAKING TO SUPPORT THE ACQUISITION PROPOSAL IN RESPECT OF ITS 40%
SHAREHOLDING IN POLIFIN.
2. THE ACQUISITION PROPOSAL
IN TERMS OF THE ACQUISITION PROPOSAL SHAREHOLDERS WILL RECEIVE R9,70 PER
POLIFIN ORDINARY SHARE IN CASH ("THE ACQUISITION CONSIDERATION").
SHAREHOLDERS WILL BE ENTITLED TO RECEIVE THE FINAL DIVIDEND OF 17 CENTS PER
SHARE IN RESPECT OF THE YEAR ENDED 25 JUNE 1999. THE ACQUISITION CONSIDERATION
WILL INCUR INTEREST AT A RATE OF 16,5% PER ANNUM, FOR THE PERIOD FROM 26 JUNE
1999 TO THE FIRST PAYMENT DATE IN TERMS OF THE ACQUISITION ("THE PAYMENT
DATE"). SHOULD THE PAYMENT DATE FALL AFTER 26 NOVEMBER 1999, THE INTEREST ON
THE ACQUISITION CONSIDERATION FOR THE PERIOD FROM 26 NOVEMBER 1999 WILL BE
CALCULATED AT THE REPURCHASE AGREEMENT RATE BETWEEN THE SOUTH AFRICAN RESERVE
BANK AND THE BANKS ("THE REPO RATE").
3. CONFIRMATION TO THE SECURITIES REGULATION PANEL ("SRP")
INVESTEC BANK LIMITED HAS CONFIRMED TO THE SRP THAT SASOL HAS THE NECESSARY
RESOURCES AVAILABLE TO IMPLEMENT THE ACQUISITION.
4. INFORMATION ON SASOL
SASOL IS A LEADING SUPPLIER OF FUELS AND PETROCHEMICALS TO THE SOUTHERN AFRICAN
AND INTERNATIONAL MARKETS. SASOL HAS A PRIMARY LISTING ON THE JOHANNESBURG
STOCK EXCHANGE ("JSE") AND HAS A CURRENT MARKET CAPITALISATION OF R30 187
MILLION.
FOR THE YEAR ENDED 25 JUNE 1998, SASOL REPORTED ATTRIBUTABLE EARNINGS OF R2 075
MILLION ON TURNOVER OF R16 666 MILLION. AS AT 25 DECEMBER 1998, SASOL HAD
PERMANENT CAPITAL HOLDERS' INTEREST OF R15 298 MILLION.
5. INFORMATION ON POLIFIN
POLIFIN, A COMPANY LISTED ON THE JSE, IS SOUTH AFRICA'S LEADING PRODUCER OF
MONOMERS (ETHYLENE AND PROPYLENE), POLYMERS (POLYETHYLENE, POLYPROPYLENE AND
POLYVINYL CHLORIDE), CHLOR-ALKALI CHEMICALS, MINING REAGENTS AND RELATED
PRODUCTS. FOR THE YEAR ENDED 25 JUNE 1999, POLIFIN REPORTED ATTRIBUTABLE
EARNINGS OF R389 MILLION ON TURNOVER OF R3 708 MILLION. AS AT 25 JUNE 1999,
POLIFIN HAD SHAREHOLDERS' EQUITY OF R2 390 MILLION.
6. RATIONALE FOR THE ACQUISITION
THE ACQUISITION BY SASOL OF POLIFIN COMPLEMENTS THE SASOL STRATEGY OF
AGGRESSIVELY EXPANDING ITS CHEMICAL PORTFOLIO AND TO PURSUE ACCELERATED GROWTH
THROUGH GLOBALISATION. SUBSTANTIAL SYNERGIES WILL BE ACHIEVED BY THE CLOSER
INTEGRATION BETWEEN MOST OF POLIFIN'S ACTIVITIES WITH THOSE OF SASOL AND ALSO
BY THE ADDITIONAL FEEDSTOCK OPTIMISATION OPPORTUNITIES THAT WILL ARISE. GROWTH
OF POLIFIN WILL BE FACILITATED BY IT BEING AN INTEGRAL PART OF SASOL'S
EXPANDING CHEMICALS PORTFOLIO AND THE GLOBAL LEVERAGE THIS PROVIDES. THE
EXCITING PROJECT WHICH POLIFIN HAS EMBARKED UPON IN MALAYSIA ALSO COMPLEMENTS
THE SASOL GLOBALISATION DRIVE.
7. FINANCIAL EFFECTS
7.1 POLIFIN
THE TABLE BELOW SETS OUT THE FINANCIAL EFFECTS BEFORE AND AFTER THE ACQUISITION
(BASED ON THE AUDITED RESULTS OF POLIFIN FOR THE YEAR ENDED 25 JUNE 1999) ON
THE VALUE OF A POLIFIN SHARE TO A SHAREHOLDER:
                                                          %
                                NOTES   BEFORE   AFTER    INCREASE/
                                        (CENTS)  (CENTS)  (DECREASE)
MARKET VALUE                    (I)     625      970      55,2
HEADLINE EARNINGS/INCOME        (II)    71       115      61,9
NET ASSET VALUE/CASH                    434      970      123,5
NOTES:
(I) THE MARKET VALUE PER POLIFIN SHARE IN THE "BEFORE" COLUMN IS THE RULING
PRICE ON THE JSE ON 30 JUNE 1999, BEING THE LAST BUSINESS DAY PRIOR TO THE
PUBLICATION OF THE FIRST CAUTIONARY ANNOUNCEMENT.
(II) THE PRO FORMA HEADLINE EARNINGS PER ORDINARY SHARE IN THE "AFTER" COLUMN
HAS BEEN CALCULATED ON THE ASSUMPTION THAT THE ACQUISITION WAS EFFECTIVE 26
JUNE 1998, AND THAT THE ACQUISITION CONSIDERATION WAS INVESTED FOR THE PERIOD
26 JUNE 1998 TO 25 JUNE 1999 AT AN AFTER-TAX INTEREST RATE OF 11,9% (BASED ON A
TAX RATE OF 30%).
7.2 SASOL HAD THE ACQUISITION BEEN EFFECTIVE ON 26 JUNE 1997 IT WOULD NOT HAVE
HAD A MATERIAL EFFECT ON SASOL'S HEADLINE EARNINGS PER SHARE FOR THE YEAR ENDED
25 JUNE 1998.
8. CONDITIONS PRECEDENT
THE ACQUISITION IS CONDITIONAL, SUBJECT TO THE FINALISATION OF THE MECHANICS,
INTER ALIA, UPON:
- TYPE APPROVAL OF THE RELEVANT DOCUMENTATION BY THE JSE AND THE SRP; AND
- THE APPROVAL OF AECI'S SHAREHOLDERS OF THE DISPOSAL OF AECI'S INTEREST IN
POLIFIN IN A GENERAL MEETING.
9. DOCUMENTATION
A CIRCULAR, WHICH IS SUBJECT TO THE APPROVAL OF THE JSE AND THE SRP, SETTING
OUT FULL DETAILS RELATING TO THE ACQUISITION PROPOSAL, WILL BE POSTED TO
POLIFIN SHAREHOLDERS WITHIN 30 DAYS OR SUCH LONGER PERIOD AS THE SRP MAY PERMIT
JOHANNESBURG
2 AUGUST 1999
MERCHANT BANK TO SASOL
INVESTEC MERCHANT BANKING
INVESTEC BANK LIMITED
(REGISTRATION NUMBER 69/04763/06)
SPONSORING BROKER
INVESTEC SECURITIES LIMITED
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
(REGISTRATION NUMBER 72/08905/06)
ATTORNEYS
EDWARD NATHAN & FRIEDLAND INC
(REGISTRATION NUMBER 77/00525/21)



                                        
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