| Tue 15 Apr 2008, 12:42 | | SBG / SUL - Simeka / SAB&T Ubuntu Holdings - Firm |
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SUL SBG
SUL SBG
SBG / SUL - Simeka / SAB&T Ubuntu Holdings - Firm Intention To Make A
Conditional Offer For Acquisition And Further Joint Cautionary Announcement
SIMEKA BUSINESS SOLUTIONS GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 2003/012583/06)
Share code: SBG & ISIN code: ZAE000074878
("SIMEKA")
SAB&T UBUNTU HOLDINGS LIMITED
(formerly: Abrina 4166 Limited)
(Incorporated in the Republic of South Africa)
(Registration Number: 2006/029387/06)
JSE Code: SUL & ISIN: ZAE000088837
("SUHL")
FIRM INTENTION TO MAKE A CONDITIONAL OFFER FOR ACQUISITION OF ALL THE ISSUED
SHARES OF SAB&T UBUNTU HOLDINGS LIMITED BY SIMEKA BUSINESS SOLUTIONS GROUP
LIMITED AND FURTHER JOINT CAUTIONARY ANNOUNCEMENT
INTRODUCTION
With reference to the companies`cautionary announcements dated 31 March 2008,
River Group is authorised to announce that the SUHL board has received a firm
intention to make an offer from SIMEKA for the acquisition of 100% of SUHL`s
issued shares for a purchase consideration of up to 150 million SIMEKA shares
("consideration price") on the terms set out below.
TERMS OF THE OFFER
SIMEKA intends to make an offer, subject to the conditions precedent set out
below, to all the shareholders of SUHL (the "Offerees") to acquire all of their
ordinary shares in the issued share capital of SUHL (the "SUHL Shares"), free
from all encumbrances and together with all rights attaching thereto (the
"Offer").
If the Offer is accepted by Offerees holding 90% (ninety per cent) or more of
the SUHL Shares, SIMEKA may invoke the provisions of Section 440K of the
Companies Act, No. 61 of 1973, as amended (the "Companies Act") and thereby give
notice as contemplated in Section 440K of the Companies Act to all the Offerees
who have not accepted the Offer to compulsorily acquire their SUHL Shares on the
terms and conditions of the Offer.
In the event that the Offer is successful, application will be made to the JSE
Limited (the "JSE") for the immediate suspension and subsequent termination of
the listing of the SUHL Shares on the JSE.
Should the Offer be accepted by Offerees in respect of less than 90% (ninety per
cent) of all the SUHL Shares, the Offer will fail unless SIMEKA waives
fulfilment of such condition, in which event SIMEKA will acquire those SUHL
Shares in respect of which acceptances have been received.
The Offer will be made in compliance, to the extent required, with the
requirements of the Securities Regulation Code on Takeovers and Mergers (the
"SRP Code"), the listing requirements of the JSE and such other regulatory
authorities as may have jurisdiction over the Offer or the transaction resulting
from the Offer.
It is intended that the effective date of the acquisition will be 1 June 2008.
RATIONALE FOR THE PROPOSED TRANSACTION
The rationale for the transaction is based on the synergies in ICT, Business
Support Services, and Public Sector opportunities between SIMEKA and SUHL.
OFFER CONSIDERATION
In terms of the intended Offer, SUHL Shareholders will be entitled to receive
1 (one) new ordinary share in the share capital of SIMEKA for every 2,1 (two
comma one) SUHL Shares held by them (the "Offer Consideration") up to a maximum
of 150 million SIMEKA shares.
The SIMEKA shares so issued, comprising the Offer Consideration, will rank pari
passu with the other SIMEKA shares then in issue.
CONDITIONS PRECEDENT TO THE OFFER
The implementation of the Offer would be subject to the fulfilment or waiver of
the following conditions precedent, namely -
- all necessary regulatory approvals having been obtained for the making and
implementation of the Offer, including, but not limited to:
- the Securities Regulation Panel approving the terms of the Offer and,
to the extent required, the Offer document;
- the South African competition authorities unconditionally (or with
conditions acceptable to SIMEKA) approving the implementation of the
Offer in terms of the Competition Act, No. 89 of 1998;
- the JSE approving the relevant Offer documentation;
- Offerees holding at least 90% (ninety per cent) of the SUHL Shares
accepting the Offer;
- the Offer becoming unconditional by 16 May 2008 (or such other date as may
be agreed by SIMEKA and SUHL in writing);
- the management shareholders of SUHL (holding at least 70% of the SUHL
Shares (the Management SUHL Shareholders") entering into an agreement with
SIMEKA pursuant to which, inter alia -
- the Management SUHL Shareholders warrant to SIMEKA that the
sustainable headline profit after tax ("PAT") earned by SUHL for the
benefit of SIMEKA, for the 12 (twelve) month period ended 31 May 2009
will be no less than R30 000 000,00 (thirty million rand) (the
"Management Warranty") For the purposes of the Management Warranty,
the PAT will be calculated with reference to the attributable headline
earnings of SUHL;
- the Management SUHL Shareholders warrant to SIMEKA that the headline
earnings per share ("HEPS") earned by SUHL for the 12 (twelve) month
period ended 29 February 2008 will be at least between 30% and 40%
higher than that of the corresponding previous year in line with the
updated trading update released on 28 March 2008;
- the Management SUHL Shareholders grant to SIMEKA a call option to
repurchase up to 60 000 000 (sixty million) of the SIMEKA shares
received by them as part of the Offer Consideration, which shares are
to be held in trust by SIMEKA`s Attorneys ("the pledged shares"), in
the event that the Management Warranty is breached SBG shall claw back
4 SBG shares at R0,001 for every R1.00 below the warranted R30,0
million (thirty million rand); and
- the Management SUHL Shareholders trading in shares are restricted as
follows:
- Up to 5% of the shares within the first 12 months from the effective
date; and
- Up to 5% of the shares within the second 12 months from the effective
date; and
- the balance after a period of 24 months from the effective date,
thereafter no more than 33% maybe traded in any particular year and no
more than 10% may be sold in any month;
- the Management SUHL Shareholders undertake not to compete with SIMEKA and
SUHL during their period of employment and for a period of three years
after employment;
- the Management SUHL shareholders undertake to sign new employment contracts
for three years in line with SIMEKA terms and conditions
EXISTING HOLDING OF SUHL SHARES
As far as SIMEKA is aware, SIMEKA and its directors do not have any direct or
indirect shareholding in SUHL or any options to acquire SUHL Shares.
SHAREHOLDER SUPPORT
Neither SIMEKA nor SUHL have solicited any shareholder support to date and do
not intend to do so until the Offer has been made.
FINANCIAL EFFECTS OF THE ACQUISITION
A detailed joint announcement in respect of the financial effects of the Offer
will be published on SENS on completion of the due diligence to the satisfaction
of SIMEKA and SUHL
IMPORTANT DATES AND TIMES
Shareholders will be advised of important dates and times of the Offer in due
course
OPIONIONS AND RECOMENDATIONS
The Board of SUHL(through an independent sub-committee comprising B. Adam, J.
van Rooyen and F. Jakoet) has appointed MOORE STEPHENS to advise it whether the
terms and conditions of the Offer are fair and reasonable for SUHL shareholders.
The Board will make its recommendation to the SUHL shareholders on receipt by it
of the final fair and reasonable opinion.
DOCUMENTATION
A circular incorporating the Offer and providing further information on the
Offer and containing, inter alia, a form of surrender and transfer will be
posted to SUHL shareholders in due course.
FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue exercising caution when dealing in the
companies shares, pending further announcements
Sunninghill
15 April 2008
Corporate Adviser to the Transaction
River Group
Attorneys to SIMEKA
Edward Nathan Sonnenbergs
Designated Adviser to SUHL
River Group
Designated advisor to SIMEKA
Java Capital (Proprietary) Limited
Date: 15/04/2008 12:42:05 Produced by the JSE SENS Department.
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