18th Nov 2005 07:01
Lonmin PLC18 November 2005 Lonmin Plc Messina Limited (Incorporated in England) (Incorporated in the Republic of South Africa)(Registered in the Republic of South Africa under registration number (Registration number 1950/035912/06) 1969/000015/10) JSE code: MESISIN code: GB0031192486 ISIN: ZAE000004438JSE code: LON ("Messina")Issuer code: LOLMI("Lonmin") Announcement regarding: • an increase in the offer price from ZAR 33.00 to ZAR 45.00 valuing outstanding shares in Messina Limited at R76.5 million (US$11.4 million); • a scheme of arrangement proposed by Lonmin between Messina and its shareholders in terms of section 311 of the Companies Act, No. 61 of 1973, as amended; • the proposed delisting of Messina; and • withdrawal of cautionary announcement 1. Introduction Further to the announcement dated 16 September 2005 by Lonmin of its firmintention to make an offer to the shareholders of Messina, other than SouthernPlatinum Corp. ("SPC") and any other Lonmin group companies that may alreadyhold shares in Messina, Lonmin has today presented the board of Messina with anoffer, to be implemented through a scheme of arrangement ("the scheme") betweenMessina and its shareholders, other than SPC and any other Lonmin groupcompanies that may already hold shares in Messina, ("scheme members") in termsof section 311 of the Companies Act, No. 61 of 1973, as amended ("CompaniesAct"), to acquire all the Messina shares not already held, directly andindirectly, by Lonmin ("scheme shares") at an increased offer price of ZAR 45.00per Messina share ("scheme consideration"). Upon the fulfilment of theconditions precedent set out below, Messina will be delisted from the JSESecurities Exchange ("JSE"). The scheme consideration represents a premium of 18% to the closing JSE marketvalue per Messina share on 10 June 2005, the last trading day immediatelypreceding publication of the Lonmin announcement regarding the offer to SPCshareholders ("SPC transaction") becoming unconditional and a 34% premium to theclosing market value of Messina on the last trading day immediately precedingpublication of this announcement. 2. Rationale for Messina shareholders to vote in favour of the scheme As a result of its acquisition of SPC, the Lonmin Group currently owns 91.5% ofMessina. Lonmin wishes to acquire the remaining 8.5% of Messina shares held bythe scheme members for the following reasons: • the costs of maintaining a separate listing of Messina substantially outweigh the benefits thereof as Lonmin is already listed on the London Stock Exchange and the JSE; • in the current economic environment and given the volatility of markets and the further capital requirements of Messina, it is more appropriate for Messina to grow under the umbrella of Lonmin's considerable resource base; • given the extremely low liquidity and tradability of Messina shares, it is unlikely that scheme members will be able to realise value for their investment if Messina remains listed; and • the scheme consideration of ZAR 45.00 per share presents an opportunity to scheme members to realise their investment at an attractive premium. 3. The scheme consideration The scheme consideration is ZAR 45.00 per share and values theMessina shares not held by Lonmin at ZAR 76 514 625.00. 4. Conditions precedent The implementation of the scheme is subject to the fulfilment of thefollowing conditions precedent: • the approval of the scheme by scheme members representing not less than 75% of the votes exercisable by scheme members present and voting, either in person or by proxy, at the scheme meeting; • the Court sanctioning the scheme in terms of the Companies Act; and • a certified copy of the Order of Court sanctioning the scheme being registered by the Registrar of Companies in terms of the Companies Act. 5. Irrevocable undertakings to support the scheme Irrevocable undertakings to vote in favour of the scheme at the scheme meetinghave been received from scheme members representing approximately 30% of thescheme shares. 6. Financial effects The table below sets out the illustrative pro forma financial effects of theoffer on scheme members, assuming that the scheme had been implemented, forincome statement purposes, from 1 January 2005 and for balance sheet purposes at30 June 2005. The pro forma financial effects have been prepared by the directors of Messinausing the reviewed interim results of Messina for the six months ended 30 June2005, for illustrative purposes only to provide information about how the offermight have affected the financial information presented and, because of theirnature, may not give a true reflection of the financial effects of the offer:+--------------+----------------------+-------------------------+--------------+| | Before the scheme | After the scheme | % change || | (cents per share) | (cents per share) | |+--------------+----------------------+-------------------------+--------------+|Market value | | | ||per share and | | | ||cash received | | | ||1 | 3 350 | 4 500 | 34 |+--------------+----------------------+-------------------------+--------------+|Market value | | | ||per share and | | | ||cash received | | | ||2 | 3 800 | 4 500 | 18 |+--------------+----------------------+-------------------------+--------------+|Earnings per | | | ||share 3 | (1 066.0) | 135.0 | 113 |+--------------+----------------------+-------------------------+--------------+|Headline | | | ||earnings per | | | ||share 3 | (1 066.0) | 135.0 | 113 |+--------------+----------------------+-------------------------+--------------+|Dividend per | | | ||share 4 | 0 | 135.0 | - |+--------------+----------------------+-------------------------+--------------+|Net asset | | | ||value per | | | ||share and cash| | | ||received 5 | (290.0) | 4 500 | 1 652 |+--------------+----------------------+-------------------------+--------------+Notes: 1. The "Before the scheme" column reflects the closing JSE market valueper Messina share on 16 November 2005, being the last trading day immediatelypreceding publication of the increased offer to Messina shareholders. The "Afterthe scheme" column shows the consideration to be received per Messina share. 2. The "Before the scheme" column reflects the closing JSE market valueper Messina share on 10 June 2005, being the day that Lonmin's offer to SPCshareholders closed and was deemed successful. The "After the scheme" columnshows the consideration to be received per Messina share. 3. The "Before the scheme" column reflects the reviewed earnings andheadline earnings per share for the six months ended 30 June 2005. The "Afterthe scheme" column shows the interest income that a Messina shareholder wouldhave earned had the consideration to be received per Messina share been investedat a 6 month fixed deposit compounded interest rate of 6% per annum on 1 January2005 for a period of 6 months. 4. The "Before the scheme" column reflects the dividend distributed pershare for the six months ended 30 June 2005. The "After the scheme" column showsthe interest income that a Messina shareholder would have earned had theconsideration to be received per Messina share been invested at a 6-month fixeddeposit compounded interest rate of 6% per annum on 1 January 2005 for a periodof 6 months. However it should be noted that Messina has not declared a dividendin the past two years. 5. The "Before the scheme" column reflects the reviewed net asset valueper share at 30 June 2005. The "After the scheme" column shows the considerationto be received per Messina share. 6. The possible application of Capital Gains Tax has not been taken intoaccount in the calculations above. 7. The substitute offer To ensure compliance with the Securities Regulation Panel ("SRP") Code onTakeovers and Mergers ("SRP Code") mandatory offer requirements, should thescheme not become operative for any reason, the acquisition will be undertakenthrough an unconditional cash offer at an offer price of ZAR 45.00. In suchevent an announcement that the scheme has failed and that the substitute offerbecomes effective, including the salient dates and times of the substituteoffer, will be made on SENS and in the press. The terms of the substitute offerwill also be included in the scheme circular that will be posted to Messinashareholders in terms of paragraph 10 below. 8. Opinions and recommendations • The board has formed a separate independent sub-committee to considerthe terms of the scheme, comprising Messrs Richard Shead and John Sanders, whowere appointed as independent non-executive directors of Messina on 7 September2005 and 14 September 2005 respectively. Mr John Sanders chairs the independentboard sub-committee. The independent sub-committee appointedPricewaterhouseCoopers as independent financial advisers to provide it withexternal advice as required in terms of the SRP Code. • The independent sub-committee of the Messina board has considered theterms and conditions of the scheme and, taking into account the external adviceof PricewaterhouseCoopers, is of the unanimous opinion that the terms andconditions thereof are fair and reasonable to scheme members. The independentsub-committee has recommended to the Messina board that it recommend to schememembers that they vote in favour of the scheme at the scheme meeting. • The Messina board (other than Messrs BA Mills, IP Farmer and JNRobinson, who are also directors of Lonmin, and Messrs JF Grimbeek and AG Rosswho are employees of the Lonmin Group and have recused themselves fromexpressing such an opinion) has considered the terms and conditions of thescheme and, taking into account the opinion of PricewaterhouseCoopers and theindependent sub-committee, is of the opinion that the terms and conditionsthereof are fair and reasonable to scheme members and recommends that schememembers vote in favour of the scheme at the scheme meeting. • The opinion letter of the independent financial advisers will becontained in the scheme circular that will be sent to Messina shareholders interms of paragraph 10 below. 9. SRP funding confirmation The SRP has been given appropriate confirmation, in terms of the SRP Code, thatLonmin will have sufficient cash resources available to satisfy the maximumconsideration payable in terms of the offer. 10. Documentation A circular setting out the full details of the scheme and substitute offer willbe sent to Messina shareholders within 28 days or such later date as may beagreed to by the SRP. 11. Withdrawal of cautionary announcement Shareholders of Messina are advised that caution is no longer required whendealing in their Messina shares. If you have any questions regarding the content of this announcement, pleasecontact Alex Shorland-Ball of Lonmin (Vice President Investor Relations andCommunications at Lonmin) on +44 791 703 8684. Johannesburg18 November 2005+-------------------------------------------------+------------------------------------------------+|Investment bank and corporate adviser to Lonmin | Independent financial adviser to Messina |+-------------------------------------------------+------------------------------------------------+| Nedbank Capital | PricewaterhouseCoopers |+-------------------------------------------------+------------------------------------------------+| (A division of Nedbank Limited) | |+-------------------------------------------------+------------------------------------------------+| Attorneys to the scheme |Legal adviser to the independent sub-committee |+-------------------------------------------------+------------------------------------------------+| Cliffe Dekker Inc. | Webber Wentzel Bowens |+-------------------------------------------------+------------------------------------------------+| Technical adviser to Messina | Sponsor to Messina |+-------------------------------------------------+------------------------------------------------+| Snowden | Rand Merchant Bank |+-------------------------------------------------+------------------------------------------------+| | (A division of Firstrand Bank Limited) |+-------------------------------------------------+------------------------------------------------+| Reporting accountants | |+-------------------------------------------------+------------------------------------------------+| KPMG Inc. | |+-------------------------------------------------+------------------------------------------------+ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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