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MURRAY & ROBERTS HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/29826/06)
("M&R" OR "THE COMPANY")
DISPOSAL BY M&R OF ITS CEMENT, AGGREGATE AND READY MIX CONCRETE ACTIVITIES
1. INTRODUCTION
DEUTSCHE MORGAN GRENFELL IS AUTHORISED TO ANNOUNCE AND M&R SHAREHOLDERS ARE
ADVISED THAT FURTHER TO THE CAUTIONARY ANNOUNCEMENTS DATED 4 JUNE 1998 AND 16
JULY 1998, AN AGREEMENT HAS BEEN CONCLUDED BETWEEN M&R AND LAFARGE SA
("LAFARGE"), THE WORLDWIDE LEADER IN BUILDING MATERIALS. IN TERMS OF THE
AGREEMENT, WHICH IS SUBJECT TO THE APPROVAL OF M&R SHAREHOLDERS, M&R HAS
DISPOSED OF ITS ENTIRE HOLDING IN THE ISSUED SHARE CAPITAL OF BLUE CIRCLE
LIMITED ("BLUE CIRCLE"), WHICH HOLDS M&R'S CEMENT, AGGREGATE AND READY MIX
CONCRETE ACTIVITIES ("THE DISPOSAL"), TO LAFARGE. A CONSIDERATION OF
APPROXIMATELY R1 530 MILLION ON A CASH AND DEBT-FREE BASIS WILL BE RECEIVED BY
M&R IN RESPECT OF THE DISPOSAL, WHICH IS EFFECTIVE 30 JUNE 1998.
IT IS THE INTENT OF LAFARGE, WITH THE SUPPORT OF M&R, TO PURSUE DISCUSSIONS
WITH APPROPRIATE SOUTH AFRICAN BLACK ECONOMIC EMPOWERMENT GROUPS WITH THE VIEW
TO EXTENDING EXISTING INITIATIVES AND DEVELOPING FURTHER PARTNERSHIPS.
2. RATIONALE
THE DIVESTMENT OF THE CEMENT, AGGREGATE AND READY MIX CONCRETE ACTIVITIES BY
M&R FOLLOWS A STRATEGIC REVIEW OF THE COMPANY'S LONG-TERM OBJECTIVES BY THE
BOARD OF M&R. THE REVIEW RESULTED IN A DECISION THAT M&R SHOULD FOCUS ITS
BUSINESS ACTIVITIES IN AREAS WHERE IT HAS SIGNIFICANT MARKET LEADERSHIP AND IS
INTERNATIONALLY COMPETITIVE, BUILDING ON ITS STRONG CONTRACTING, ENGINEERING
AND LOGISTICS CAPABILITIES. IT WAS FURTHER CONCLUDED THAT BUSINESSES THAT DO
NOT MEET THESE CRITERIA WOULD BENEFIT FROM THE INTRODUCTION OF NEW SHAREHOLDERS
WITH APPROPRIATE EMPHASIS.
THE DISPOSAL WILL SIGNIFICANTLY STRENGTHEN THE FINANCIAL POSITION OF M&R AND
THE PROCEEDS WILL ELIMINATE THE COMPANY'S NET DEBT.
3. FINANCIAL EFFECT OF THE DISPOSAL
THE TABLE BELOW SETS OUT THE PRO FORMA EFFECTS OF THE DISPOSAL ON THE EARNINGS
AND HEADLINE EARNINGS PER M&R SHARE FOR THE 6 MONTHS ENDED 31 DECEMBER 1997 AND
THE NET ASSET VALUE PER M&R SHARE AT 31 DECEMBER 1997.
6 MONTHS TO 31 DECEMBER 1997
ACTUAL PRO FORMAL
BEFORE THE AFTER THE
DISPOSAL DISPOSAL CHANGE
PER SHARE (CENTS) (CENTS) %
EARNINGS 31 158 +410
HEADLINE EARNINGS 31 47 +52
NET ASSET VALUE
(AT 31 DECEMBER 1997) 771 932 +21
TANGIBLE NET ASSET VALUE
(AT 31 DECEMBER 1997) 645 867 +34
NOTES:
1. THE PRO FORMA COLUMN IS BASED ON THE FOLLOWING ASSUMPTIONS;
- BLUE CIRCLE WAS DISPOSED OF AND THE PURCHASE CONSIDERATION WAS RECEIVED ON 1
JULY 1997.
- AN INTEREST SAVING, NET OF THE CONTRIBUTION FROM BLUE CIRCLE, OF R54,1
MILLION CALCULATED ON THE AVERAGE AFTER TAX INTEREST RATE PAID BY M&R ON THE
AVERAGE INTEREST BEARING DEBT OUTSTANDING AT 1 JULY 1997 AND 31 DECEMBER 1997.
4. PRO FORMA TANGIBLE NET ASSET VALUE AND ATTRIBUTABLE EARNINGS OF BLUE CIRCLE
THE PRO FORMA TANGIBLE NET ASSET VALUE OF BLUE CIRCLE AT 31 DECEMBER 1997 AND
THE PRO FORMA ATTRIBUTABLE EARNINGS OF BLUE CIRCLE FOR THE SIX MONTHS THEN
ENDED WERE R467 MILLION AND R24 MILLION RESPECTIVELY.
5. GENERAL MEETING
A GENERAL MEETING OF M&R SHAREHOLDERS TO CONSIDER AND APPROVE THE DISPOSAL WILL
BE CONVENED. SUBJECT TO THE APPROVAL OF THE JOHANNESBURG STOCK EXCHANGE, A
CIRCULAR CONTAINING FULL DETAILS OF THE DISPOSAL AND INCORPORATING A NOTICE OF
GENERAL MEETING OF M&R SHAREHOLDERS WILL BE POSTED TO M&R SHAREHOLDERS ON OR
ABOUT WEDNESDAY, 12 AUGUST 1998.
SANDTON
29 JULY 1998
FINANCIAL ADVISOR
DEUTSCHE MORGAN GRENFELL (SA)(PROPRIETARY)LIMITED
(REGISTRATION NO. 95/11798/07)
LEGAL ADVISOR
EDWARD NATHAN & FRIEDLAND INC
REGISTRATION NUMBER 77/00525/21
JOINT SPONSORING BROKERS
MERRILL LYNCH
SMITH BORKUM HARE (PTY) LTD
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
REGISTRATION NUMBER 95/01805/07
FLEMING MARTIN SECURITIES LTD
REGISTRATION NUMBER 95/11815/06
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
