The CSE Council approved the public offer made by Gerik Investments Ltd, a subsidiary of A. Panayides Contracting Pcl, for the acquisition of part of the share capital of PHA not controlled by its associated parties.
The associated parties and other parties related to them control 56.53% of PHA’s share capital. The consideration is comprised of a cash payment of 9 cent per share and 3 APC shares for every 10 PHA shares.
Under plan B, for every share of Pharmakas Quarries Limited, the Company will offer: 1 share of Gerik G. of Gerik Investments Ltd.
The Public Offer will be considered successful if Gerik Investments acquires any stake in Pharmakas Quarries Limited (of nominal value 10 cent each) and a maximum 100% of the shares of Pharmakas Quarries.
If Gerik acquires 33.47% of the issued share capital of PHA, which is 10,193,402 shares of PHA, the Parties in Agreement have irrevocably committed to accept Option B and will transfer all 17,217,353 shares held in PHA to Gerik, so that Gerik holds 91% of the issued capital of PHA (27,410,755) and exercise the right granted by article 201 (1) of the Companies’ Law, Chapter 113 to acquire the remaining shares of PHA.
If Gerik acquires less than 33.47% of the issued capital of PHA, which is 10,193,402 shares of PHA, the Parties in Agreement have irrevocably committed to accept Option B and will transfer to Gerik shares of PHA, which together with the additional shares that Gerik will acquire from the other shareholders of PHA, will give Gerik a stake of 51% of the issued capital of PHA (15,532,223 shares).
Gerik emphasizes that the shareholders that will select Option B will acquire C class shares of Gerik. The C shares of Gerik are preference and redeemable.
Gerik is a public company, the titles of which are not listed in the CSE or any other stock exchange and there is no intention for a future listing.
VALUATION
The cash consideration and share exchange ratio were based on PHA’s and APC’s book values as at 31 December 2003. On that day, the Book Value of PHA stood at 21.90 cent and APC’s Book Value stood at 44.66 cent.
Based on the above, PHA shareholders will receive 90 cent in cash and 133.98 cent from the Book Value of the 3 APC shares exchanged for every 10 PHA shares held, while they will give up 218.90 cent in terms of PHA Book Value. Consequently, PHA shareholders will receive a total net benefit of 5.08 cent for every 10 PHA shares held or 2.33%.
In market terms, based on the latest closing prices of the two stocks, namely 14 cent for PHA and 21 cent for APC, PHA shareholders will
receive a total of 153 cent in exchange for giving up 10 PHA shares with market value of 140 cent. With current market prices, the net benefit per share translates to 1.3 cent per share or 9.2%. The proposal
is valid for the period between 7 March 2005 until 15 April 2005.
