| Fri 9 May 2008, 15:32 | | SBG - SUL - Simeka Business Solutions Group Limite |
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SUL SBG
SUL SBG
SBG - SUL - Simeka Business Solutions Group Limited - Sab&T Ubuntu Holdings
Limited - Offer to acquire all the issued shares of SAB&T Ubuntu Holdings
Limited by Simeka Business Solutions Group Limited and further joint withdrawal
of the cautionary announcements
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")
OFFER TO ACQUIRE ALL THE ISSUED SHARES OF SAB&T UBUNTU HOLDINGS LIMITED BY
SIMEKA BUSINESS SOLUTIONS GROUP LIMITED AND FURTHER JOINT WITHDRAWAL OF THE
CAUTIONARY ANNOUNCEMENTS
1. INTRODUCTION
In an announcement released on SENS on Tuesday 15 April 2008 and published in
the press on Wednesday, 16 April 2008, SUHL shareholders were advised that the
SUHL board had 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.
2. TERMS OF THE OFFER
SIMEKA is making an offer, subject to 90% of the shareholders accepting the
offer and the conditions precedent set out in paragraph 4 below, all of which
have been fulfilled except for Competition Commission approval and the relevant
agreements with management which are outstanding at the date of this
announcement, 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% or more of the SUHL shares,
SIMEKA may invoke the provisions of section 440K of 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.
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.
It is intended that the effective date of the acquisition will be 1 June 2008.
In terms of this offer, SUHL shareholders will be entitled to receive 1 new
ordinary share in the share capital of SIMEKA for every 2,1 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.
Post the implementation of the offer, it is envisaged that the board of the
combined business of SUHL and SIMEKA will consist of 12 directors, comprising
four nominees of SUHL, consisting of Bashier Adam, Nishani Singh, Jeffrey van
Rooyen and Fatima Jakoet and eight nominees of SIMEKA, consisting of Mohammed
Varachia, Surendranath Singh, Madoda Papiyana, Alex Evan, Dr Popo Molefe,
Tozamile Botha, Kabote Johanna Molefe and Yvonne Mhinga. The directors and
officers of the subsidiaries shall be determined by the new board of SIMEKA.
In the event that the Offer is successful, application will be made to the JSE
for the immediate suspension and subsequent termination of the listing of the
SUHL shares on the JSE.
3. RATIONALE FOR THE OFFER
The rationale for the transaction is based on synergies in the "Business Support
Services" sector as well as "Public" sector opportunities, which could be better
realised by the combined company.
4. CONDITIONS PRECEDENT
The implementation of the Offer are subject to Offerees holding at least 90% of
the SUHL shares accepting the offer and the fulfillment or waiver of the
following conditions precedent, all of which have been fulfilled except for
Competition Commission approval, the relevant agreement with managements and
acceptance of the offer by 90% of the SUHL shareholders as referred to above,
which is outstanding at the date of this document, namely:
* all necessary regulatory approvals having been obtained for the making and
implementation of the Offer, including, but not limited to:
- the South African Competition Authorities unconditionally (or with
conditions acceptable to SIMEKA) approving the implementation of the offer in
terms of the Competition Act;
* 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-month period ending 31 May 2009 will be no less than R30 000 000 (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-month period ended 29
February 2008 will be at least 30% 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 SIMEKA shall claw back 4 SBG shares at R0,001 for every
R1,00 below the warranted R30 000 000;
* 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;
- 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% may be 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.
5. FINANCIAL EFFECTS
The table below sets out the unaudited pro forma financial effects of the
acquisition on SIMEKA`s results as published on 30 November 2007 and assume the
transaction took effect on 1 June 2007.
The unaudited pro forma financial effects are presented for illustrative
purposes only and because of their nature may not give a fair reflection of
SIMEKA `s results, financial position and changes in equity after the
acquisition. The directors of SIMEKA are responsible for the preparation of the
unaudited pro forma financial effects.
SUHL SIMEKA After
Before Before acquisition
Published Published Pro forma
Earnings per share (cents) 2.0 9.1 8.6
Headline earnings per share (cents) 2.5 8.8 8.6
Net asset value per share (cents) 20.11 88.62 90.76
Net tangible asset value per share (cents) 12.42 (5.3) 3.12
Number of shares in issue (`000) 282 300 388 875 478 875
Weighted average number of shares
in issue (`000) 282 300 387 712 477 712
6. OPINION AND RECOMMENDATION
The board of SUHL established a sub-committee of the board, comprising of B
Adam, J van Rooyen and F Jakoet, to consider the terms and conditions of the
offer and to make a recommendation to the board regarding the offer. The board
of SUHL appointed Moore Stephens to advise it whether the terms and conditions
of the offer are fair and reasonable for SUHL shareholders.
The sub-committee has evaluated the terms and conditions of the offer and the
opinion of Moore Stephens, and is of the unanimous opinion that the terms and
conditions of the offer are fair and reasonable to the SUHL shareholders.
Accordingly, the sub-committee has recommended to the full board that it
recommend that SUHL shareholders accept the offer. In accordance with that
recommendation, the full board recommends that SUHL shareholders accept the
offer.
The directors of SUHL who hold SUHL shares have indicated their intention to
accept the offer.
7. DOCUMENTATION
The offer document dated 9 May 2008 including all annexures and attachments will
be posted to SUHL shareholders on Saturday, 10 May 2008.
8. IMPORTANT DATES AND TIMES
Salient Dates and Times
2008
Offer document posted to SUHL shareholders Saturday, 10 May
Offer opens Friday, 9 May
Finalisation date Friday, 16 May
Announcement as to the level of acceptance with regard to section 440(k) of the
Act to be released on SENS Friday, 16 May
Announcement as to the level of acceptance with regard to section 440(k) of the
Act to be published in the press Friday, 16 May
Post notice in terms of section 440(k) to shareholders who have not accepted the
offer Friday, 16 May
Expected suspension of SAB&T Ubuntu Holdings Limited listing
on the JSE Monday, 19 May
Last day to trade in SUHL shares on the JSE Friday, 23 May
Consideration record date, being the date on which ordinary
shareholders must be recorded in the register Friday, 30 May
Offer closes at 12:00 on Friday, 30 May
Operative date from the commencement of trading Monday, 2 June
In respect of certificated shareholders of SUHL, if existing share certificates
are surrendered together with forms of surrender and transfer on or before 12:00
on Friday, 30 May 2008, new share certificates in SIMEKA will be posted, by
registered post, at the risk of shareholders (or failing such surrender within
five business days of the date of surrender) on or about 2 June 2008 Monday, 2
June
In respect of dematerialised shareholders, their accounts at their CSDP or
broker updated Monday, 2 June
Termination of SAB&T Ubuntu Holdings Limited listing on the JSE from the
commencement of trading T.B.A.
Notes:
1. The above dates and times are subject to amendment. Details of any such
amendment will be released on SENS.
2. Shareholders will not be able to dematerialise or rematerialise their SUHL
shares after Friday, 23 May 2008.
3. SUHL shareholders, who surrender their existing documents of title after
the record date, will have their new share certificates posted, by registered
post, within five business days of receipt thereof by the transfer secretaries
at the risk of the shareholders concerned, in terms of section 440K of the Act
as the offer will have closed on 30 May 2008.
4. Please note that the termination date will be announced after the effective
date.
5. Shareholders are advised that the termination of SAB&T Ubuntu Holdings
Limited on the JSE will occur six weeks after the evocation of section 440K of
the Act.
9. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement dated 15 April 2008 and
are advised that caution is no longer required to be exercised by shareholders
when dealing in their securities.
Sunninghill
09 May 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: 09/05/2008 15:32:01 Produced by the JSE SENS Department.
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