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ZED - Zeder Investments Limited - Firm intention announcement of a general
offer To Capespan Group Limited ("Capespan") Shareholders
Zeder Investments Limited
Incorporated in the Republic of South Africa
Registration number: 2006/019240/06
JSE share code: ZED
ISIN number: ZAE000088431
FIRM INTENTION ANNOUNCEMENT OF A GENERAL OFFER TO CAPESPAN GROUP LIMITED
("Capespan") SHAREHOLDERS
Offer Consideration of 225 cents per share is a premium of:
- 29.5% to the 30 day volume weighted average traded price of Capespan
shares of 173.7 cents per share;
- 57.6% to the 90 day volume weighted average traded price of Capespan
shares of 142.8 cents per share; and
- 66.9% to the 180 day volume weighted average traded price of Capespan
shares of 134.8 cents per share,
for the relevant periods ending 10 June 2011.
1. INTRODUCTION
1.1 Shareholders are hereby advised of the firm intention of Zeder
Investments Limited, acting through its wholly owned subsidiary Zeder
Financial Services Limited ("Zeder"), to make a cash offer to acquire all
Capespan shares not held by Zeder ("Offer"). Zeder currently owns, directly
and indirectly, approximately 27.7% of the outstanding shares of Capespan.
1.2 Accordingly the material terms of the Offer that will be made to the
shareholders of Capespan is set out in this firm intention Offer
announcement.
1.3 The Offer is an affected transaction as defined in section 117 of the
Companies Act, 2008 as amended ("the Act"), therefore the Offer will be
regulated by the Act, the Companies Regulations, 2011 and the Takeover
Regulation Panel ("TRP").
2. DESCRIPTION OF THE CAPESPAN BUSINESS
Capespan is a leader in global fruit marketing and distribution and a
provider of supply chain service solutions, with operations in 34
countries.
3. RATIONALE FOR THE OFFER
3.1 The market share of Capespan`s fruit distribution business has reduced
over the years, given the fact that the environment within which they
operate has changed dramatically. This represents both a challenge and an
opportunity, and Capespan will have to adapt in order to overcome same and
to achieve growth going forward. The aforesaid is not without risk, and
finance and patience will be required. A shareholder of reference, like
Zeder, will be best suited to assist Capespan in addressing these
challenges.
3.2 In addition, Zeder believes that current shareholders are receiving a
fair price for their Capespan shares, given price levels at which Capespan
shares have traded over a long period of time.
4. INTENTIONS REGARDING THE CONTINUATION OF THE BUSINESS AND THE CAPESPAN
BOARD
4.1 Zeder intends to continue the business currently operated by Capespan.
Future acquisitions and growth opportunities will be considered as and when
the opportunities present themselves.
4.2 Zeder has no immediate intention to change the composition of the
Capespan board. The remuneration of the Capespan board will not be affected
by the Offer.
5. THE OFFER
5.1 The Offer
Zeder shall offer to acquire, all or any of the Capespan shares held by
Capespan shareholders in exchange for the Offer consideration of 225
cents per share ("Offer Consideration"). Capespan shareholders may elect
to accept the Offer in whole or in part.
5.2 The Offer Consideration
5.2.1 The Offer Consideration of 225 cents per share surrendered in
terms of the Offer shall be payable in cash. The Offer Consideration is a
substantial premium to the various traded prices of Capespan shares as set
out above.
5.2.2 Given market conditions, Zeder believes the Offer Consideration to
be fair to shareholders for the following reasons:
5.2.2.1 traditionally Capespan shares have traded way below net asset
value;
5.2.2.2 liquidity has been a problem for all shareholders; and
5.2.2.3 the Offer provides shareholders with an opportunity to exit their
investment at a fair price and at a substantial premium to the market
price.
5.3 The Offer period
The Offer will be open for acceptance from 09:00 on Wednesday, 13 July
2011 with the initial closing date being at 12:00 on Friday, 11 November
2011 ("Closing Date"). The Offer will be open for acceptance by those
Capespan shareholders that are recorded in the register at close of
business on the Closing Date. In terms of the Companies Regulations,
2011, the Offer must remain open for at least 10 business days after the
date it is announced that the Offer is unconditional. Therefore any
change to the aforementioned initial Closing Date will be announced on
SENS and in the press prior to the initial Closing Date. Accordingly,
Zeder reserves the right to change the initial Closing Date to an
earlier or later date, provided that the initial Closing Date shall not
be changed to a date that is earlier than 30 business days from the date
of posting of the circular by Zeder.
5.4 Cash confirmation
The TRP has been given appropriate written confirmations from FirstRand
Bank Limited (acting through its Rand Merchant Bank division), ABSA
Bank Limited (acting through its ABSA Capital division) and the
Standard Bank of South Africa Limited, as contemplated in Regulation
111(4) of the Takeover Regulations, that Zeder has sufficient cash
resources and/or facilities available to meet its cash commitments to
Capespan shareholders in relation to the Offer.
5.5 Amendment or variation of the Offer
No amendment or variation of the Offer shall be valid unless it is
agreed to by Zeder in writing and approved by the TRP, provided that
Zeder shall not agree to any amendment or variation that has the effect
of reducing the Offer Consideration.
5.6 No set-off of Offer consideration
Settlement of the Offer Consideration pursuant to the Offer will be
implemented in full in accordance with the terms of the Offer without
regard to any lien, right of set-off, counterclaim, deduction,
withholding or other analogous right to which Zeder may otherwise be, or
claim to be, entitled against any shareholder.
5.7 Offer not made where unlawful
The Offer shall not constitute an offer to purchase or the solicitation
of an offer to sell any Capespan shares in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the laws of such jurisdiction.
5.8 Governing law
The Offer shall be governed by and construed in accordance with the laws
of South Africa and shall be subject to the exclusive jurisdiction of
the South African courts.
6. CONDITIONS PRECEDENT
The Offer is subject to the fulfilment of the following outstanding
conditions precedent in respect of the implementation of the Offer:
6.1 the required approval of the Competition Authorities (either
unconditionally or subject to conditions acceptable to Zeder), being
obtained on or before Friday, 28 October 2011, and
6.2 the required approval of the TRP, including the issuance by the TRP of
the requisite compliance certificate, and any other relevant regulatory
authorities (either unconditionally or subject to conditions acceptable to
Zeder), to the extent that same is required, being obtained on or before
Friday, 28 October 2011.
In the event that the Capespan board does not co-operate with Zeder in
order to fulfil the conditions precedent and the conditions precedent
are not timeously fulfilled then the date for fulfilment of same will
automatically be extended to Wednesday, 30 November 2011. Zeder reserves
the right to extend the date of fulfilment of the conditions precedent
to a later date, with the prior approval of the TRP.
7. PURCHASE OF CAPESPAN SHARES IN THE MARKET AND INTEREST ON THE OFFER
CONSIDERATION
7.1 Shareholders are hereby advised that Zeder will purchase additional
Capespan shares in the market at 225 cents per share from the date of this
announcement until such time as Zeder increases its shareholding in Capespan
to 49% or the Offer closes, whichever is earlier. In the event that Zeder
increases its shareholding in Capespan to 49% then Zeder will pay interest
to all Capespan shareholders validly accepting the Offer at the prime rate
of interest from the date that Zeder increases its shareholding in Capespan
to 49% until the date the Offer consideration is paid to Capespan
shareholders accepting the Offer. Capespan shareholders wishing to dispose
of their Capespan shares in the aforesaid manner should contact Willem Meyer
or Albert Basson of Zeder on 021 887 9602.
7.2 In the event that Zeder increases its shareholding in Capespan to above
34.9% and the required approval of the Competition Authorities is not
obtained in accordance with paragraph 6.1 above, then, to the extent that
the Offer is not amended to a partial offer, Zeder will be required to
reduce its shareholding in Capespan to 34.9% in the manner stipulated in the
Companies Regulations, 2011.
8. CIRCULAR
A circular containing full detail of the Offer will be sent out to
Capespan shareholders on or about Tuesday, 12 July 2011. This circular
shall enable Capespan shareholders to make an informed decision in
relation to the Offer. The Capespan board are required by the Act to
send their own circular to Capespan shareholders containing the Capespan
board`s views on the Offer and a fair and reasonable opinion within 20
business days of publication of the Offer circular sent by Zeder.
9. PRO FORMA FINANCIAL EFFECTS OF THE OFFER ON ZEDER
The pro forma financial effects of the Offer on Zeder are presented for
illustrative purposes only and because of their nature may not give a
fair reflection of Zeder`s financial position after the Offer. The
directors of Zeder are responsible for the preparation of the unaudited
pro forma financial information.
Set out below are the unaudited pro forma financial effects of the
Offer, based on the audited results for the year ended 28 February 2011
for Zeder. The audited results of Capespan for the year ended 31
December 2010 were used to illustrate the effect of the Offer on the
financial position of Zeder after the Offer.
Audited before Unaudited Pro Change (%)
the Offer Forma after the
(cents) Offer
(cents)
Attributable 26.5 27.9 5.3
earnings per
share basic
and diluted
Headline 18.9 18.7 (1.1)
earnings per
share - basic
and diluted
Recurring 27.1 29.5 8.9
headline
earnings per
share
Net asset 257.8 289.1 12.1
value per
share
Net tangible 257.8 276.9 7.4
asset value
per share
Notes and assumptions:
1. The attributable earnings per share, headline earnings per share and
recurring headline earnings per share figures in the "Unaudited Pro Forma
after the Offer" column have been calculated on the basis that the Offer was
effected on 1 March 2010.
2. The net asset value per share and net tangible asset per share
figures
in the "Unaudited Pro Forma after the Offer" column have been
calculated on
the basis that the Offer was effected on 28 February 2011.
3. The applicable taxation rate is assumed to be 28%.
4. The attributable earnings per share, headline earnings per share and
recurring headline earnings per share figures, are calculated based on
the
weighted average number of shares in issue at 28 February 2011.
5. The net asset value per share and net tangible asset per share
figures,
are calculated based on the number of shares in issue at 28 February
2011.
6. The pro forma financial effects have been prepared on the assumption
that Zeder acquires all Capespan shares not held by Zeder or an
additional
215 954 058 Capespan shares in terms of the Offer at a consideration
of 225
cents per share. The total offer consideration, being R485.9 million,
is
settled through available cash of R206 million and borrowings of R279.9
million.
7. Borrowings are assumed to carry interest at an average rate of JIBAR
plus 2.7% per annum and cash at money market rates.
10. JSE LISTINGS REQUIREMENTS CATEGORISATION
The Offer is regarded as a Category 2 acquisition in terms of the
Listings Requirements of the JSE and therefore no action is required by
Zeder shareholders.
11. DIRECTORS RESPONSIBILITY STATEMENT
The directors of Zeder:
11.1 collectively and individually accept full responsibility for the
accuracy of the information given in this firm intention Offer announcement;
11.2 certify that, to the best of their knowledge and belief, the
information in this firm intention Offer announcement is true and correct;
and
11.3 certify that, the firm intention Offer announcement does not omit
anything likely to affect the importance of the information disclosed.
Stellenbosch
14 June 2011
Transaction advisor and sponsor to Zeder: PSG Capital
Date: 14/06/2011 08:30:01 Supplied by www.sharenet.co.za
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