| Mon 27 Aug 2007, 11:16 | | SBG - Simeka BSG - Merger between Simeka BSG and S |
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SBG
SBG
SBG - Simeka BSG - Merger between Simeka BSG and Sahara Holdings and further
cautionary
SIMEKA BSG LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 2003/012583/06)
Share code: SBG ISIN code: ZAE000074878
("Simeka BSG" or "the company")
MERGER BETWEEN SIMEKA BSG AND SAHARA HOLDINGS (PTY) LTD ("Sahara Holdings") AND
FURTHER CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Shareholders are advised that, on 24 August 2007, Simeka BSG has concluded an
agreement that will result in the merger of Simeka BSG and Sahara Holdings ("the
merger").
The merger will be implemented by the acquisition by Simeka BSG of 100% of the
interest of Sahara Holdings (Pty) Ltd (comprising shares and claims) in Sahara
Computers (Pty) Ltd, Annex Distribution (Pty) Ltd, Sahara Consumables (Pty) Ltd,
Sahara Systems (Pty) Ltd, Sahara Distribution (Pty) Ltd and Sahara Computers and
Electronics Limited India as well as at least 50% of its interest in a joint
venture in Mozambique, in consideration for the issue by Simeka BSG of up to 510
000 000 Simeka BSG shares ("consideration shares").
The effective date of the acquisition is 1 July 2007.
SAHARA
Sahara is one of Southern Africa`s largest official distributors and Original
Equipment Manufacturers ("OEM")for a number of leading international hardware
and software vendors, boasting an annual turnover in excess of R1 billion.
RATIONALE
Sahara with its hardware reseller capability, will significantly strengthen
Simeka BSG`s go-to-market offering especially in the Technology Solutions and
Support ("TSS") cluster. Sahara`s current hardware and software resale services
will drive immediate material growth in the group`s onsite, carry-in and it
logistics businesses.
The merger will significantly boost both the group`s revenue and profit after
tax, as well as augment Simeka BSG`s current strong BEE platform. The Simeka
BSG shares issued in terms of the merger (see `Terms of the Merger below) will
substantially increase Simeka BSG`s market capitalisation to approximately R1,5
billion.
TERMS OF THE MERGER
The purchase consideration for Sahara is a maximum of R867 million to be settled
by the issue of 510 million Simeka BSG shares at R1,70 per share, subject to:
- Sahara achieving a profit after tax of at least R75 million for the period
ended 30 June 2008; and
- an asset value of at least R134,7 million at the effective date of the
merger.
CONDITIONS TO THE MERGER
The merger is subject to the following conditions being met:
- the requisite regulatory approvals including the JSE Limited, the SRP and -
- the competition authorities;
- the parties obtaining board and shareholder approval for this transaction;
- Simeka BSG and Sahara completing a detailed due diligence on each other;
- the net realisable asset value assumed on acquisition being not less than
R134,7 million;
- the major and material contracts in Sahara and Simeka BSG being valid,
binding and in force for at least a period of 12 months from the effective
date and capable of being ceded/transferred to Simeka BSG as the case may
be.
FINANCIAL EFFECTS OF THE MERGER
A detailed announcement in respect of the financial effects of the merger will
be published on SENS on completion of the due diligence to the satisfaction of
Simeka BSG.
FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue exercising caution when dealing in the
company`s shares, pending further announcements including detailed financial
effects of the merger.
Rosebank
27 August 2007
Designated advisor
Java Capital (Proprietary) Limited
Date: 27/08/2007 11:16:01 Produced by the JSE SENS Department.
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