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THE BIDVEST GROUP LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/21180/06)
("BIDVEST")
ISLAND VIEW STORAGE LTD
(REGISTRATION NUMBER 52/00715/06)
("IVS")
PROPOSED OFFER BY THE BIDVEST GROUP LIMITED ("BIDVEST") TO ACQUIRE ALL OF THE
SHARES IN ISLAND VIEW STORAGE LIMITED ("IVS"), OTHER THAN THOSE ALREADY OWNED
BY BIDVEST
1. INTRODUCTION
FURTHER TO THE ANNOUNCEMENT PUBLISHED ON 17 SEPTEMBER 1999, AND THE FURTHER
ANNOUNCEMENT PUBLISHED ON 20 DECEMBER 1999, INVESTEC BANK LIMITED IS AUTHORISED
TO ANNOUNCE THAT BIDVEST IS PROCEEDING WITH THE CASH OFFER FOR SUCH OF THE
ISSUED SHARES OF IVS AS THE BIDVEST GROUP DOES NOT ALREADY OWN ("THE OFFER").
THE BIDVEST GROUP CURRENTLY OWNS 27,7% OF THE ISSUED SHARE CAPITAL OF IVS. CG
SMITH LIMITED, WHICH OWNS 59,8% OF THE ISSUED SHARE CAPITAL OF IVS, AND OVER
WHICH SHAREHOLDING BIDVEST HAS A PRE-EMPTIVE RIGHT, HAS UNDERTAKEN TO ACCEPT
THE OFFER. IN ADDITION, BIDVEST HAS RECEIVED INDICATIONS FROM HOLDERS OF
APPROXIMATELY 7,6% OF THE IVS SHARES NOT ALREADY OWNED BY BIDVEST THAT THEY
WILL ACCEPT THE OFFER. THESE INDICATIONS, TOGETHER WITH THE UNDERTAKING BY CG
SMITH LIMITED, REPRESENT APPROXIMATELY 90% OF THE IVS SHARES NOT ALREADY OWNED
BY THE BIDVEST GROUP.
2. THE OFFER
IN TERMS OF THE OFFER, SHAREHOLDERS WILL RECEIVE R12,89 IN CASH PER IVS
ORDINARY SHARE ("THE OFFER CONSIDERATION"). THE OFFER CONSIDERATION WILL BE
PAID TO AN OFFEREE WITHIN FIVE BUSINESS DAYS OF THE RECEIPT BY THE TRANSFER
SECRETARIES (ON BEHALF OF BIDVEST) OF THE PROPERLY COMPLETED FORM OF ACCEPTANCE
AND SURRENDER.
IF THE OFFER IS ACCEPTED BY SHAREHOLDERS HOLDING NOT LESS THAN 90% OF THE OFFER
SHARES, BIDVEST WILL, IN TERMS OF SECTION 440K OF THE COMPANIES ACT, 1973, AS
AMENDED, GIVE THE NOTICE CONTEMPLATED IN THAT SECTION AND WILL CONSEQUENTLY BE
ENTITLED TO ACQUIRE THE REMAINING OFFER SHARES IN EXCHANGE FOR THE OFFER
CONSIDERATION. IN ANY EVENT, APPLICATION WILL BE MADE TO THE JOHANNESBURG STOCK
EXCHANGE ("THE JSE") FOR THE IMMEDIATE SUSPENSION AND SUBSEQUENT TERMINATION OF
THE LISTING OF IVS ON THE JSE.
3. IMPORTANT DATES AND TIMES
2000
OFFER OPENS AT 09:30 TUESDAY, 18 JANUARY
OFFER CLOSES AT 14:30 WEDNESDAY, 9 FEBRUARY
LAST DAY FOR RECEIPT OF POSTAL ACCEPTANCES,
POSTMARKED ON OR BEFORE THE CLOSING DATE
AND RECEIVED BY 14:30 FRIDAY, 11 FEBRUARY
RESULTS OF THE OFFER PUBLISHED WEDNESDAY, 16 FEBRUARY
IVS SHARES SUSPENDED ON THE JSE FRIDAY, 18 FEBRUARY
1. THESE DATES AND TIMES ARE SUBJECT TO AMENDMENT. ANY SUCH AMENDMENT WILL BE
PUBLISHED IN THE PRESS.
2. THE SUSPENSION OF IVS SHARES ON THE JSE WILL OCCUR IN THE EVENT THAT THE
OFFER IS ACCEPTED BY SHAREHOLDERS HOLDING NOT LESS THAN 90% OF THE OFFER SHARES
AND SECTION 440K OF THE ACT CAN BE INVOKED.
4. CONFIRMATION TO THE SECURITIES REGULATION PANEL ("THE SRP")
THE SRP HAS RECEIVED CONFIRMATION THAT BIDVEST HAS THE NECESSARY RESOURCES
AVAILABLE TO MAKE THE OFFER.
5. INFORMATION ON BIDVEST
BIDVEST IS AN INVESTMENT HOLDING COMPANY LISTED IN THE INDUSTRIAL CONSUMER
(SERVICE) SECTOR OF THE JSE LISTS. THE COMPANY HAS A CURRENT MARKET
CAPITALISATION OF APPROXIMATELY R17 BILLION. THE STRATEGY OF THE BIDVEST GROUP
IS TO INVEST IN COMPANIES OPERATING IN THE AREAS OF DISTRIBUTION, SERVICE AND
TRADING. THE GROUP'S OBJECTIVE IS TO ENHANCE SHAREHOLDER WEALTH BY REAL GROWTH
IN EARNINGS AND DIVIDENDS PER SHARE THROUGH ORGANIC GROWTH AND SELECTIVE
ACQUISITIONS. BIDVEST'S PHILOSOPHY FOR MOTIVATING MANAGEMENT IS BASED ON A
DECENTRALISED STRUCTURE WITH STRONG INCENTIVES TO EXCEED REALISTIC PROFIT GOALS
FOR THE YEAR ENDED 30 JUNE 1999, BIDVEST REPORTED ATTRIBUTABLE EARNINGS OF R709
MILLION ON TURNOVER OF R14,6 BILLION.
AT 30 JUNE 1999, BIDVEST HAD SHAREHOLDERS' EQUITY OF R2,7 BILLION.
6. INFORMATION ON IVS
IVS, A COMPANY LISTED IN THE INDUSTRIAL CONSUMER (TRANSPORT) SECTOR OF THE JSE
LISTS, WITH A CURRENT MARKET CAPITALISATION OF APPROXIMATELY R420 MILLION, IS
INVOLVED PRIMARILY IN THE STORAGE AND HANDLING OF BULK LIQUIDS AND GASES SUCH
AS CHEMICALS, LUBE OIL ADDITIVES, FATS AND VEGETABLE OILS. THE PRODUCTS HANDLED
ARE USED IN A WIDE VARIETY OF INDUSTRIES INCLUDING PULP AND PAPER, DETERGENTS,
TEXTILES, FOODS, ANIMAL FEEDS, PAINTS AND WATER TREATMENT. THE SYSTEMATIC
EXPANSION OF THESE OPERATIONS OVER A NUMBER OF YEARS HAS RESULTED IN A
WELL-DEVELOPED INFRASTRUCTURE AND SPECIALISED FACILITIES OF AN INTERNATIONAL
STANDARD, WHICH PROVIDE EXTREMELY HIGH BARRIERS TO ENTRY FOR POTENTIAL
COMPETITORS.
FOR THE YEAR ENDED 30 SEPTEMBER 1999, IVS REPORTED ATTRIBUTABLE EARNINGS OF
R42,0 MILLION ON TURNOVER OF R127,8 MILLION.
AT 30 SEPTEMBER 1999, IVS HAD SHAREHOLDERS' EQUITY OF R155,0 MILLION.
7. RATIONALE FOR THE OFFER
BIDVEST, VIA ITS BIDFREIGHT DIVISION, OPERATES OR MANAGES A WIDE RANGE OF
SPECIALISED MATERIALS HANDLING FACILITIES IN SOUTH AFRICA AND MAPUTO. MAINLY
LOCATED IN OR NEAR THE PERIPHERIES OF MAJOR SOUTHERN AFRICAN PORTS, THESE
OPERATIONS ARE COMPLEMENTED BY A NETWORK OF GENERAL FREIGHT STATIONS AND INLAND
CONTAINER STORAGE DEPOTS SERVICING SOUTH AFRICA'S MAJOR ROAD AND RAIL TRUCK
ROUTES. THIS DIVISION CONTINUES TO GROW THROUGH ESTABLISHING WELL-PLACED
FACILITIES, SUCH AS THE TERMINAL BEING DEVELOPED TO SERVICE BILLITON PLC'S NEW
MOZAL ALUMINIUM SMELTER IN THE MOZAMBICAN PORT OF MATOLA. BIDFREIGHT IS THE
ONLY SUB-SAHARAN OPERATOR WITH THE FACILITIES TO HANDLE ALL TYPES OF CARGO,
INCLUDING BREAKBULK, CONTAINERS, DRY BULK AND NEO-BULK.
THE ACQUISITION OF IVS ACCORDS WITH THE BIDVEST GROUP'S INTENTION TO EXPAND ITS
FOOTHOLD IN CERTAIN STRATEGIC INVESTMENTS. THE BIDVEST GROUP WILL EXPLORE
SYNERGIES BETWEEN ITS EXISTING STORAGE AND CARGO-HANDLING-BASED SERVICES,
TAKING ADVANTAGE OF IVS'S BULK LIQUID AND GAS STORAGE FACILITIES, WHICH ARE
TRADITIONALLY LESS PRONE TO FLUCTUATIONS IN IMPORT AND EXPORT VOLUMES.
BIDFREIGHT HAS NOW ASSEMBLED A FOCUSED AND MAJOR STRATEGIC PORTFOLIO OF
TERMINALS, INCLUDING LIQUIDS AND GAS STORAGE, NEO- BULK TERMINALS, BULK
TERMINALS AND CONTAINER TERMINALS.
8. FINANCIAL EFFECTS
8.1 IVS
THE TABLE BELOW SETS OUT THE PRO FORMA FINANCIAL EFFECTS OF THE OFFER ON THE
MARKET VALUE, HEADLINE EARNINGS AND NET ASSET VALUE PER IVS SHARE BASED ON THE
PUBLISHED ANNUAL RESULTS OF IVS FOR THE YEAR ENDED 30 SEPTEMBER 1999:
BEFORE AFTER
(CENTS) (CENTS) PREMIUM
IVS SHARE PRICE AT 14 SEPTEMBER 1999(1) 925,0 1 289,0 39,4
IVS SHARE PRICE AT 14 JANUARY 2000(2) 1 270 1 289,0 1,5
HEADLINE EARNINGS(3) 125,9 126,3 0,3
NET ASSET VALUE(4) 484,0 1 289,0 177,8
NOTES:
1. THE LAST BUSINESS DAY ON WHICH IVS SHARES TRADED BEFORE THE PUBLICATION OF
THE FIRST CAUTIONARY ANNOUNCEMENT.
2. THE LAST DAY ON WHICH IVS SHARES TRADED PRIOR TO THE FINALISATION OF THIS
ANNOUNCEMENT.
3. THE HEADLINE EARNINGS PER IVS SHARE FIGURE IN THE "BEFORE" COLUMN IS DERIVED
FROM THE ANNUAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1999. THE PRO FORMA
HEADLINE EARNINGS PER ORDINARY SHARE IN THE "AFTER" COLUMN HAS BEEN CALCULATED
ON THE ASSUMPTION THAT THE OFFER WAS EFFECTIVE 1 OCTOBER 1998, AND THAT THE
OFFER CONSIDERATION WAS INVESTED FOR THE PERIOD 1 OCTOBER 1998 TO 30 SEPTEMBER
1999 AT AN AFTER-TAX INTEREST RATE OF 9,8% (BASED ON A TAX RATE OF 30%).
4. BASED ON THE NET ASSET VALUE PER IVS SHARE AT 30 SEPTEMBER 1999.
8.2 BIDVEST
HAD THE OFFER BEEN EFFECTIVE ON 1 JULY 1998, IT WOULD NOT HAVE HAD A MATERIAL
EFFECT ON BIDVEST'S HEADLINE EARNINGS PER SHARE OR ITS NET ASSET VALUE PER
SHARE FOR THE YEAR ENDED 30 JUNE 1999.
9. DOCUMENTATION
A CIRCULAR, WHICH SETS OUT FULL DETAILS RELATING TO THE OFFER, WILL BE POSTED
TO IVS SHAREHOLDERS TODAY.
JOHANNESBURG
18 JANUARY 2000
MERCHANT BANK TO BIDVEST
INVESTEC CORPORATE FINANCE
INVESTEC BANK LIMITED
(REGISTRATION NUMBER 69/04763/06)
FINANCIAL ADVISER TO IVS
ING BARINGS
ATTORNEYS TO BIDVEST
WERKSMANS ATTORNEYS
ATTORNEYS TO IVS
GARLICKE & BOUSFIELD INC. ATTORNEYS
REGISTRATION NUMBER 77/03506/21
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