| Wed 29 Aug 2007, 17:04 | | BNT - Bonatla - Amendment to the proposed acquisit |
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BNT
BNT
BNT - Bonatla - Amendment to the proposed acquisition by Bonatla of 51% of the
issued share capital of SA Growth
Bonatla Property Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/014533/06)
JSE share code: BNT
ISIN Number: ZAE000013694
("Bonatla")
SA Growth Property Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/001397/06)
("SA Growth")
Amendment to the proposed acquisition by Bonatla of 51% of the issued share
capital of SA Growth
1 Introduction
It was published in the press on Thursday, 17 May 2007 that Bonatla proposed to
acquire 51% of the issued share capital of SA Growth from the shareholders of SA
Growth ("the SA Growth shareholders") ("the proposed transaction") for a
purchase consideration of R14 120 639 which was to be settled through the
immediate issue of 12 Bonatla shares for each 1 SA Growth share.
Bonatla shareholders are informed that the purchase price, the settlement of the
purchase price and the general terms relating to the proposed transaction have
been amended. Accordingly, the purpose of this announcement is to set out the
revised terms of the proposed transaction. The amended pro forma financial
effects of the proposed transaction are set out in paragraph 10 of this
announcement.
The proposed transaction is subject to the fulfilment of the conditions
precedent set out in paragraph 8 below which have not been amended.
2 Nature of the SA Growth business
SA Growth provides niche industrial warehousing space and document storage
solutions and related facilities to companies that outsource their logistics and
storage requirements. It also actively engages in the investment and development
of the underlying properties within which the related storage businesses are
housed.
SA Growth owns 30% of Storit 1 Property (Proprietary) Limited, a property
investment company that owns No 46 Landsmarz Mark Avenue in Kosmosdale,
Extention 11, Samrand ("the SA Growth property"). The site area measures 17
751m2 and has a rentable area of 12 551 m2. The weighted average rental per
month is approximately R45.00 per square metre of rentable space.
3 Vendors
SA Growth has 141 shareholders, in aggregate, of which the majority
shareholders, are also executive directors of SA Growth ("the Director
shareholders"). The respective shareholdings of the director shareholders are
set out as follows:
Description of Beneficial Director Percentage
holding entity Shareholder shareholding
The Jadine Trust JA Mackay 21.67
The Knoetze Trust HG Knoetze 21.67
OPM Family Trust JVG Botha 21.67
Total 65.01
4 Rationale
The proposed transaction provides Bonatla with the opportunity to increase its
investments and expand its asset base with a view to complying with the JSE
Limited`s ("JSE") Listings Requirements and recommencing trade on the JSE once
approval from the JSE has been obtained.
Furthermore, the proposed transaction will not only provide Bonatla with an
indirect interest in the SA Growth property, but also the opportunity to
diversify its business interests into the document storage industry.
Bonatla has undertaken to support SA Growth with its strategy of growth and
strategic acquisitions. Bonatla has advanced a loan to SA Growth to fund its
working capital requirements in the short term.
Subsequent to 1 April 2007, the management of Bonatla have injected
approximately R5 million into Bonatla to fund the company`s working capital and
the acquisition of assets and have undertaken to support Bonatla and its
subsidiaries working capital requirements going forward.
5 Purchase consideration
The purchase consideration payable by Bonatla in terms of the proposed
transaction ("the purchase consideration") will be settled through the issue by
Bonatla of 14 Bonatla shares ("the Bonatla consideration shares") for each SA
Growth share ("the SA Growth acquisition shares") being acquired, up to a
maximum of 51% of the issued share capital of SA Growth. SA Growth shareholders
who decide to participate in the proposed transaction ("the accepting SA Growth
shareholders") will receive 8 of the Bonatla consideration shares immediately
("initial consideration shares"), subject to the restrictions set out in
paragraph 9 below. The remaining 6 Bonatla consideration shares ("contingent
consideration") will be withheld by Bonatla until such time as the profit
warranty detailed in paragraph 6 below may be achieved. The issue price of the
Bonatla consideration shares has been calculated based on the 45 day volume
weighted average price per Bonatla share as at 30 June 2007, being 43 cents per
Bonatla share.
6 Profit warranty
The SA Growth shareholders have warranted that the audited net earnings after
taxation of SA Growth for the year ending 28 February 2009 ("the warranty
period") will not be less than R5.5 million ("the warranted earnings"). In the
event that the warranted earnings are achieved, the accepting SA Growth
shareholders will receive the contingent consideration at an issue price of 43
cents per share. This warranted earnings will be calculated in accordance with
International Financial Reporting Standards consistent with those policies
applied by SA Growth in previous years where applicable.
In the event that the warranted earnings are not achieved, the number of Bonatla
consideration shares to be issued to the accepting SA Growth shareholders will
be reduced in the same proportion that actual earnings during the warranty
period bear to warranted earnings, rounded to the nearest whole number.
7 Irrevocable undertakings
In terms of the proposed transaction, Bonatla will firstly acquire the shares
owned by the SA Growth minority shareholders ("the SA Growth minorities"),
which, in aggregate, currently own 34.99% of SA Growth`s issued share capital,
and which exclude the Director Shareholders. To the extent that the SA Growth
minorities elect not to participate in the proposed transaction, the Director
Shareholders have irrevocably undertaken to proportionately sell such number of
SA Growth shares that will result in Bonatla acquiring an aggregate of 51% of
the issued share capital of SA Growth. The number of shares sold by the Director
Shareholders will depend on the extent to which the SA Growth minorities elect
to participate in the proposed transaction. Consequently, the number of SA
Growth shares to be sold by the Director Shareholders to Bonatla will comprise
no less than 16.01%, and no more than 51%, of the issued share capital of SA
Growth, with the final percentage dependent on the number of SA Growth shares
sold by the SA Growth shareholders who elect to participate in the proposed
transaction.
8 Conditions precedent to the offer
The proposed transaction is subject to, inter alia, the fulfilment of the
following conditions precedent:
8. 1 regulatory approval being obtained for the proposed transaction, including,
inter alia, the approval of the JSE, the Securities Regulation Panel ("the
SRP") and the Competition Authorities; and
8.2 the waiver by the SA Growth minorities in annual general meeting, of the
requirement for Bonatla to make an offer to them in respect of their shares
in SA Growth, as required in terms of Rule 8.7 of the Securities Regulation
Code and Rules ("the Code") of the SRP
(collectively, "the conditions precedent").
The proposed transaction will become effective upon the fulfilment of the
conditions precedent.
9 General terms of the proposed transaction
Other relevant terms of the proposed acquisition are set out as follows:
- 80% of the Bonatla initial consideration shares to be issued to the SA
Growth minorities in terms of the proposed transaction will be freely
tradable on the JSE with effect from 28 February 2008 ("the trading date")
and such shares shall remain in an escrow account with Tlotlisa Securities
(Proprietary) Limited ("T-Sec") until the trading date;
- 20% of the Bonatla initial consideration shares to be issued to the SA
Growth minorities in terms of the proposed transaction will be freely
tradable on the JSE after the expiry of a 90 day period taken from the date
that the SA Growth shareholders are notified that the proposed transaction
has been completed, and such shares shall remain in an escrow account with
T-Sec until the expiry of such 90 day period;
- all Bonatla initial consideration shares to be issued to the Director
Shareholders in terms of the proposed transaction will be held in escrow
with T-Sec for a period of 24 months from 8 May 2007; and
- post-implementation of the proposed transaction, SA Growth will be entitled
to appoint one director to the board of Bonatla and Bonatla will be
entitled to appoint one director to the board of SA Growth.
10 Financial effects
The unaudited pro forma financial effects of the proposed transaction on
Bonatla shareholders are set out below and are based on the following
assumptions:
- the contingent consideration arising as a result of the proposed
transaction has been raised as equity in compliance with IAS 32 (AC 125)
Financial instruments: Disclosure and Presentation; and
- the estimated transaction costs will be capitalised to the purchase
consideration (including those transaction costs to be settled through the
issue of shares in Bonatla).
The table below sets out the unaudited pro forma financial effects of the
proposed transaction on Bonatla. The unaudited pro forma financial effects are
presented for illustrative purposes only and because of their nature may not
give a fair reflection of Bonatla`s financial position or results of operations
after the proposed transaction has been implemented. The unaudited pro forma
financial effects are the responsibility of the directors of Bonatla. It has
been assumed for the purposes of the unaudited pro forma financial effects that
the proposed transaction took place with effect from 1 October 2005 for income
statement purposes and 30 September 2006 for balance sheet purposes.
Before After % Change
Published Pro forma
Earnings per share (cents) 0.09 (0.35) (488.9)
Headline earnings per share (2.61) (2.79) (6.9)
(cents)
Net asset value per share (cents) 0.41 4.53 1 004.9
Tangible net asset value per 0.41 0.08 (80.5)
share (cents)
Number of shares in issue (000`s) 185 347 205 188 10.7
Weighted average number of shares 185 347 205 188 10.7
in issue (000`s)
Notes:
1 The "Before" financial information has been extracted without adjustment
from the published results of Bonatla for the year ended 30 September 2006.
2 Earnings and headline earnings per share have been adjusted to include
Bonatla`s 51% share of the audited income and expenditure of SA Growth for
the year ended 28 February 2007.
3 Net asset and tangible net asset value per share have been adjusted to
include the assets and liabilities of SA Growth at fair value and the
capitalisation of the estimated transaction costs (including those
transaction costs to be settled through the issue of Bonatla shares), the
issue of 32.972 million shares at 43 cents per share, goodwill arising on
the proposed transaction, the raising of the deferred taxation in respect
of property, plant and equipment at a rate of 29% arising due to the
allocation of the purchase price in terms of IFRS 3 (AC140): Business
Combinations and the raising of the contingent consideration arising as a
result of the proposed transaction. The effect of the contingent
consideration on the net asset value per share is 2.49 cents being the
difference between the net asset value per share if the Bonatla
consideration shares had been issued in full immediately and the net asset
value per share including the contingent consideration.
11 JSE and SRP requirements
The proposed transaction is classified as a Category 3 transaction in terms
of the JSE Listings Requirements and, accordingly, no further documentation
is required for implementation of the proposed transaction.
The proposed transaction further constitutes an affected transaction in terms of
the Code of the SRP and accordingly, an offer ("the offer") is required to be
made by Bonatla to the shareholders of SA Growth, which will require the
preparation of an independent opinion ("the independent opinion") on the terms
of the offer by an appropriate external advisor in terms of Rule 3.1 of the
Code. Accordingly, Moore Stephens has been appointed as the independent
professional expert ("the independent expert") to determine whether or not the
terms and conditions of the proposed transaction are fair and reasonable to SA
Growth shareholders. The results of the independent opinion will be included in
a document ("the offer document") which will be posted to SA Growth shareholders
on or about Wednesday, 5 September 2007.
12 Salient dates and times
Notice of annual general meeting and
offer document posted to SA Growth
shareholders, and offer opens at 14h00 on Wednesday, 5 September 2007
Proxy forms for the SA Growth annual
general meeting to be received by 10h00 Wednesday, 26 September 2007
on
Annual general meeting of SA Growth
shareholders at 10h00 on Friday, 28 September 2007
Results of the annual general meeting to
be released on SENS on Friday, 28 September 2007
Results of the annual general meeting to
be published in the press on Monday, 1 October 2007
Offer closes at 14h00 on Friday, 5 October 2007
Bonatla consideration shares to be listed
on the JSE and credited to the T-Sec
trading account of accepting SA Growth
shareholders to be held in escrow on
behalf of such accepting SA Growth Friday, 19 October 2007
shareholders on
Note: The above times are South African times and are subject to change. Any
change to the above dates and times will be agreed upon between Bonatla and SA
Growth and advised to Bonatla shareholders by notification on the Securities
Exchange News Service and in the press.
13 Documentation
The offer document providing further information on the proposed transaction and
containing, inter alia, a notice of general meeting, a form of proxy and a form
of acceptance, surrender and transfer and the results of the independent opinion
will be posted to SA Growth shareholders.
Johannesburg
29 August 2007
Sponsor and Corporate advisor Independent advisor to SA
to Bonatla Growth
T-Corporate Moore Stephens MWM Inc.
Date: 29/08/2007 17:04:10 Produced by the JSE SENS Department.
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