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Murray & Roberts/Concor - Offer by Murray & Roberts to acquire the entire
ordinary issued share capital of Concor
Murray & Roberts Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1948/029826/06)
Share code: MUR & ISIN: ZAE000008983
("Murray & Roberts")
Concor Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1969/003076/06)
Share code: CNC & ISIN: ZAE000001616
("Concor")
OFFER BY MURRAY & ROBERTS TO ACQUIRE THE ENTIRE ORDINARY ISSUED SHARE CAPITAL
OF CONCOR
1. INTRODUCTION
Shareholders of Murray & Roberts and Concor ("shareholders") are referred
to the announcements published on SENS by Murray & Roberts on 26 April
2005 and 10 June 2005 and by Concor on 22 April 2005, 26 April 2005, 3 May
2005, 10 June 2005, 20 June 2005, 29 July 2005 and 10 August 2005.
Shareholders are advised that Murray & Roberts has submitted to the board
of directors of Concor ("Concor board") an offer to acquire the entire
ordinary issued share capital of Concor, other than the 1 000 Concor
shares held by Mexican Wave Investments (Proprietary) Limited ("Mexican
Wave"), a wholly-owned subsidiary of Murray & Roberts ("offer").
2. THE OFFER
2.1 Terms
The offer will be implemented by way of a scheme of arrangement in
terms of Section 311 of the Companies Act (Act 61 of 1973), as
amended ("Act") ("scheme") to be proposed by Murray & Roberts between
Concor and Concor shareholders, other than Mexican Wave ("scheme
members"), in terms of which Murray & Roberts, or its nominee, will
acquire all of the Concor shares held by the scheme members in
exchange for the offer consideration set out in 2.2 below.
Should the scheme not become operative, Murray & Roberts, or its
nominee, will make an offer in accordance with Section 440A of the
Act to acquire all of the shares in Concor, other than those held by
Mexican Wave, at the price set out in paragraph 2.2 below
("substitute offer").
Should the scheme be implemented, Concor will become a wholly-owned
subsidiary of Murray & Roberts and the listing of its shares on the
JSE Limited ("JSE") will be terminated.
2.2 The consideration
The consideration, for all shareholders other than Hochtief
Aktiengesellschaft, the controlling shareholder of Concor
("Hochtief"), is a cash payment of R22.30 per Concor share plus
interest at the prime rate as published by the Standard Bank of South
Africa Limited from time to time ("prime"), from 25 July 2005 to the
date of payment of the offer consideration ("interest component")(the
R22.30 plus the interest component will collectively be referred to
as the "offer consideration"). Hochtief has agreed to accept a price
of R19.77 per Concor share plus interest at prime from 5 November
2005 to the date of payment of the offer consideration for its entire
shareholding in Concor, whether in terms of the scheme or the
substitute offer ("the Hochtief consideration"). If the scheme is
implemented, the total consideration payable to scheme participants
will be R282.4 million (equivalent to an average price of R21.16 per
Concor share) plus interest.
2.3 Undertakings
Murray & Roberts has received a written irrevocable undertaking from
Hochtief to vote all its Concor shares in favour of the scheme, or to
accept the substitute offer should the scheme not become operative,
for the Hochtief consideration.
Murray & Roberts has also received an irrevocable undertaking from
the Trustees for the time being of the Concor Share Incentive Trust
("Trust") to vote all the Concor shares in their control in favour of
the scheme, or to accept the substitute offer should the scheme not
become operative in respect of 667 380 Concor shares for the offer
consideration.
The irrevocable undertakings referred to above result in Murray &
Roberts having support for the scheme from shareholders holding
approximately 60% of the issued share capital of Concor. In the event
the scheme does not become operative, Murray & Roberts will have a
holding in excess of 50% of the issued share capital of Concor.
2.4 Cash confirmation
The Standard Bank of South Africa Limited has confirmed to the
Securities Regulation Panel ("SRP") that Murray & Roberts has
sufficient cash resources available to satisfy its obligations in
terms of the offer.
2.5 Existing holding of Concor shares
Mexican Wave owns 1 000 shares in Concor which were acquired on 4
November 2004 for a consideration of R11.52 per Concor share.
3. PRO FORMA FINANCIAL EFFECTS OF THE OFFER
The unaudited pro forma financial effects of the offer on earnings, headline
earnings, net asset value and net tangible asset value per share on Concor
shareholders (other than Hochtief) before and after the offer, are set out
below. These effects are based on the unaudited interim results of Concor for
the six months ended 31 December 2004. The unaudited pro forma financial
information has been prepared for illustrative purposes only and, because of
its nature, may not fairly present the financial position of Concor or results
of its operations after the offer.
Before After Percentage After Percentage
(1) (cents) change interest change
(cents) component
(cents)
Market value per 2 010(6) 2 230 10.9 2 348 16.8
Concor share
Earnings per 81.8 50.6(2) (38.1) 53.3(4) (34.8)
Concor share
Headline earnings 80.9 50.6(2) (37.5) 53.3(4) (34.1)
per Concor share
Net asset value 1 723 2 230(3) 29.4 2 348(5) 36.3
per Concor share
Net tangible asset 1 507 2 230(3) 48.0 2 348(5) 55.8
value per Concor
share
Notes:
1. The amounts in the "Before" column have been extracted from the
unaudited interim results of Concor for the six months ended 31
December 2004.
2. The amounts in the "After" column represent the earnings and headline
earnings that would have accrued to a holder of one Concor share for
the six months ended 31 December 2004 based on the following
principal assumptions:
a. the offer was effective 1 July 2004;
b. Concor shareholders received 2 230 cents per Concor share; and
c. the offer consideration of 2 230 cents per Concor share earned
an after-tax return of 4.5%, assuming an effective taxation rate
of 30%.
3. The amounts in the "After" column represent the net asset value and
net tangible asset value attributable to a holder of one Concor share
based on the assumptions that the offer was effective 31 December
2004 and Concor shareholders received 2 230 cents per Concor share.
4. The amounts in the "After interest component" column represent the
earnings and headline earnings that would have accrued to a holder of
one Concor share for the six months ended 31 December 2004 based on
the following principal assumptions:
a. the offer was effective 1 July 2004;
b. Concor shareholders received 2 230 cents per Concor share plus
the interest component for 6 months calculated at the current
prime overdraft rate of 10.5% per annum; and
c. the offer consideration, including the interest component, of 2
348 cents per Concor share earned an after tax return of 4.5%,
assuming an effective taxation rate of 30%.
5. The amounts in the "After interest component" column represent the
net asset value and net tangible asset value of a holder of one
Concor share based on the assumptions that the offer was effective 31
December 2004 and Concor shareholders received 2 230 cents per Concor
share plus the interest component thereon for 6 months calculated at
the current prime overdraft rate of 10.5% per annum, totalling 2 348
cents per Concor share.
6. The market value per Concor share shown in the "Before" column
represents the closing price on 25 April 2005, being the day before
the original Murray & Roberts announcement of 26 April 2005 was made.
4. RATIONALE FOR THE OFFER
Murray & Roberts has regularly considered the strategy of acquiring Concor as
the process has developed through its various phases. Based on analysis of
Concor"s potential within the domestic strategy of Murray & Roberts, the board
of Murray & Roberts has approved the framework of this offer. Murray & Roberts
wishes to introduce an appropriate empowerment partner into Concor to engage
the opportunities presented by the domestic construction market.
5. CONDITIONS PRECEDENT
The offer is conditional on, inter alia, the approval of the High Court of
South Africa, the SRP, the JSE, the Competition Authorities and other
regulatory authorities, to the extent required.
6. OPINIONS AND RECOMMENDATION
6.1 Bridge Capital Services (Proprietary) Limited ("Bridge") has been
appointed by the Concor board as its independent expert for the
purposes of the offer to advise the Concor board on whether the terms
and conditions of the offer are fair and reasonable to the
shareholders of Concor.
6.2 The Concor board has formed a separate independent committee made up
of independent non-executive directors and the acting Chief Executive
Officer ("independent committee") to ensure appropriate governance
throughout this process. The independent committee was set up to
consider the terms and conditions of the offer and to advise the
Concor board on whether the terms and conditions of the offer are
fair and reasonable to Concor shareholders.
6.3 The opinions of Bridge, the independent committee and the Concor
board will be set out in the circular referred to in paragraph 7
below.
7. DOCUMENTATION
A circular, which is subject to approval by the JSE and the SRP, containing the
full details of the offer will be posted to Concor shareholders within 30 days
of the date of this announcement. A further announcement will be published in
the press at that time.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Concor shareholders are advised that the cautionary announcements referred to
in paragraph 1 above are hereby withdrawn.
Johannesburg
1 September 2005
Merchant Bank and lead sponsor to Murray & Roberts
Rand Merchant Bank
Sponsor to Murray & Roberts
Merrill Lynch
Legal adviser to Murray & Roberts
Michael Krawitz & Co
Attorneys to Murray & Roberts
Werksmans
Independent Adviser and lead sponsor to Concor
Bridge Capital Services
Sponsor to Concor
Investec Limited
Legal advisers to Concor
Sonnenberg Hoffmann & Galombik
Date: 02/09/2005 08:10:14 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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