| Mon 23 Jun 2008, 9:58 | | ALM - Alliance Mining - Acquisition of all the ordinary shares ,withdrawal |
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ALM
ALM
ALM - Alliance Mining - Acquisition of all the ordinary shares ,withdrawal
of cautionary announcement and further cautionary announcement
Alliance Mining Corporation Limited
(Formerly Alliance Data Corporation Limited)
(Incorporated in the Republic of South Africa)
(Registration Number: 1997/013402/06)
Share Code: ALM ISIN Code: ZAE0000104733
("Alliance Mining" or "the Company")
ACQUISITION OF ALL THE ORDINARY SHARES IN, AND CLAIMS AGAINST, STILFONTEIN
MINING SUPPLIES (PTY) LTD ("STILFONTEIN MINING"), WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT AND FURTHER CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcements dated 21 February 2008 and 18
April 2008 respectively, the board of Directors of Alliance Mining are
pleased to announce the signing of an agreement, dated 26 May 2008,
with Pierre Siegfried Herselman ("Herselman"), Brian Hendrik Coetzee
("Coetzee") and James Zastron Wakelin ("Wakelin") (together, "the
Vendors"), in terms of which Alliance Mining will acquire all of the
issued share capital in and claims against Stilfontein Mining ("the
Acquisition") with effect from 1 June 2008, for a purchase
consideration of R9 275 186. The Vendors are not related parties to
Alliance Mining.
2. THE ACQUISITION
2.1 DESCRIPTION OF THE BUSINESS CONDUCTED BY STILFONTEIN MINING
Stilfontein Mining manufactures electrical motor control centres and
other electrical equipment for supply to the mining sector. The
company was established as a close corporation in 1988 and continued
trading as such until its conversion into a private company during May
2008.
2.2 RATIONALE FOR THE ACQUISTION
Alliance Mining`s strategy is to expand its mining related interests
and earnings, both organically and through acquisition. The Acquisition
will broaden the supply of equipment to the mining industry and also
allow the Company to take advantage of the synergies between the
group`s current mining related activities and those conducted by
Stilfontein Mining through, inter alia, selling into their respective
customer bases.
2.3 TERMS AND CONDITIONS OF THE ACQUISITION
2.3.1. Payment of the Purchase Price
The purchase price of R9 275 186 will be settled as follows:
2.3.1.1. A deposit of R850 000 in cash was paid to the Vendor`s
following the fulfillment of the Conditions Precedent to
the Acquisition.
2.3.1.2. An amount R3 400 000 will be paid to the Vendors within
three months of the date of signature date of the
Acquisition agreement.
2.3.1.3. An amount of R775 186 will be paid in settlement of the
Vendor`s loan accounts; and
2.3.1.4. The balance of the purchase price, being an amount of R4
250 000 will be paid by the issue and allotment to the
Vendors of 685 484 shares in Alliance Mining at a price
of R6.20 per share ("the Consideration Shares").
2.3.2. Restriction on the sale of the Consideration Shares
Save for the exercise of the Put Option detailed in paragraph
2.3.3 below, the Vendors have had the following restrictions
placed on the disposal of their pro rata portions of the
Consideration Shares:
2.3.2.1Herselman may not dispose of his portion of the
Consideration Shares prior to 1 March 2010; and
2.3.2.2Coetzee and Wakelin may not dispose of their portions of
the Consideration Shares prior to 1 March 2011.
2.3.3. Put Option
The Company has irrevocably granted to each of the Vendors an
American put option, which entitles each Vendor, at any time prior
to the expiry of the put option to sell, in whole or in part, the
Consideration Shares held by such Vendor or his nominee, to the
Company at a price of R6.20 per share. The put options expire 60
days following the lifting of the restriction on the sale of each
of the Vendor`s Consideration Shares and accordingly, the put
option granted in favour of Herselman expires on the 60th day
following 1 March 2010 and the put options in favour of Coetzee
and Wakelin expire on the 60th day following 1 March 2011.
2.3.4 Service Agreements
The Vendors have each entered into service agreements with the
Company in terms of which Herselman has agreed to remain in the
employ of the Company until at least 1 March 2010 and Coetzee and
Wakelin have agreed to remain in the employ of the Company until
at least 1 March 2011.
3. UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The unaudited pro forma financial effects set out below are provided
for illustrative purposes only to provide information about how the
Acquisition might have affected Alliance Mining`s results and financial
position as disclosed in the Company`s reviewed provisional results for
the year ended 29 February 2008. Due to the nature of the unaudited pro
forma financial information, it may not give a fair presentation of the
Company`s financial position, changes in equity, operational results or
cash flows after the Acquisition. The directors of Alliance Mining are
responsible for the preparation of the unaudited pro forma financial
effects.
Before the Pro forma after
acquisition the acquisition
audited unaudited
provisional
29 February 29 February 2008 Change
2008
Earnings per share 135.36 139.12 3%
(cents)
Headline earnings per 135.36 139.12 3%
share (cents)
Net asset value per 329.31 337.48 2%
share (cents)
Net tangible asset 224.17 230.09 3%
value per share (cents)
Weighted average shares 59,694,000 60,379,483 1%
in issue (`000)
Shares in issue at 65,000,000 65,685,483 1%
period end (`000)
Notes:
(1) The unaudited pro forma financial effects on the results
were prepared on the basis that the Acquisition was completed on
1 March 2008.
(2) The "Before the Acquisition" column has been extracted,
without adjustment, from the audited provisional results of Alliance
Mining for the year ended 29 February 2008.
(3) The "After the Acquisition" earnings and headline earnings
per share have been based on the audited results of Stilfontein Mining
for the year ended 29 February 2008.
(4) The "After the Acquisition" net asset value and net tangible
asset value per share have been adjusted to include the assets and
the Acquisition and the estimated transaction costs have been written
off against share premium.
(5) Goodwill of approximately R2.08 million will arise on the Acquisition.
(6) The pro forma financial effects do not show the accounting effects of
the put options, which will be calculated, and reported on, in accordance
with IFRS at the next reporting period.
4. CONDITIONS PRECEDENT
All the conditions precedent to the Acquisition have been fulfilled and
the Acquisition has accordingly been implemented.
5. DOCUMENTATION
Shareholder approval for the Acquisition is not required. Shareholders
will, however, in accordance with the JSE Listings Requirements, be
requested to approve a specific repurchase of shares in respect of the
granting of the Put Option to the Vendors and a circular will be sent
to shareholders in due course.
6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Following the publication of this announcement, caution is no
longer required to be exercised by shareholders when dealing in the
Company`s securities on the JSE.
7. FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the company has entered into further
negotiations, which if successfully concluded may have a material
effect on the price of the company`s securities.
Accordingly, shareholders are advised to exercise caution when dealing
in the company`s securities until a full announcement is made.
Johannesburg
19 June 2008
Designated Advisor
Arcay Moela Sponsors (Pty) Limited
Reg No 2006/033725/07
Date: 23/06/2008 09:58:01 Produced by the JSE SENS Department.
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