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Massmart Holdings Limited - Approval of Jumbo acquisition

Release Date: 21/09/2001 16:23
Code(s): MSM
Wrap Text
(Registration number 1940/014066/06)
("Massmart")
ISIN CODE  : ZAE000029534
SHARE CODE : MSM

Shareholders of Massmart are advised of the following developments
1. APPROVAL OF THE JUMBO ACQUISITION BY THE COMPETITIONS TRIBUNAL
On 21 September 2001, the Competitions Tribunal unconditionally approved the acquisition by Massmart Holdings Limited "Massmart" from Rebhold Limited of - the entire share capital of and shareholder claims against Jumbo Cash and Carry Proprietary Limited,
- the businesses of Sip N Save, a Division of Picardi Liquors (Proprietary) Limited both with effect from 1 April 2001 and
- the fixed assets, stock, debtors, trade creditors, operating leases and employee obligations of 22 Browns Cash and Carry and Weirs Cash and Carry stores with effect from 1 July 2001.
The impact of the acquisitions in respect of the year ended 30 June 2001 was summarised in Massmart's recent press release in respect of the year end results and will now be fully incorporated in the Annual Report to be issued to Shareholders shortly.
Massmart looks forward to the full integration of the acquired businesses within its portfolio and the positive impact these are expected to have on earnings and earnings per share.
2. REMOVAL OF THE WOOLTRU GUARANTEE ON MAKRO LEASE PROMISSORY NOTES
Massmart has assisted and collaborated with Wooltru Limited "Wooltru", to successfully renegotiate the removal of Wooltru's guarantee from the Makro Lease Promissory Notes, thus removing the last major impediment to the unbundling of Wooltru's shares in Massmart to Wooltru shareholders.
Massmart will pay R25m towards the cost of unwinding the former arrangement, which sum will be written off over the 20 year Lease period and therefore will have a negligible impact on earnings. Excluding this payment, the cash flows of the new arrangement are identical to those of the previous leases. The Massmart Directors' decision to contribute to the cost of the removal of the Wooltru guarantee was motivated by shareholders' interests, which are well served by the increase in Massmart's free float from approximately 20% currently, to approximately 60% after the unbundling.
An announcement on the timing and nature of the unbundling will be made by Wooltru in due course. 3. TRADING UPDATE
Trading conditions have improved from the commencement of the current financial year and the Group is currently recording double digit sales growth and profits in line with budget.
The Group is currently confident of meeting its targets, save for the as yet unquantifiable effect on world trade and local consumer confidence of any developments arising from the recent terrorist attack on the United States of America. Johannesburg 21 September 2001 Sponsor to Massmart UBS Warburg Securities (South Africa) (Pty) Ltd

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