| Mon 27 Oct 2008, 17:33 | | TLM - TeleMasters - Announcement regarding the acquisition of a division of |
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TLM
TLM
TLM - TeleMasters - Announcement regarding the acquisition of a division of
African Paradigm Communications (Pty) Limited (Trading as one Communciations)
("The seller") by Telemasters and withdrawal of cautionary announcement
TELEMASTERS HOLDINGS LIMITED
(Registration Number: 2006/015734/06)
JSE Code: TLM & ISIN: ZAE000093324
("TeleMasters" or "the Company")
ANNOUNCEMENT REGARDING THE ACQUISITION OF A DIVISION OF AFRICAN PARADIGM
COMMUNICATIONS (PTY) LIMITED (TRADING AS ONE COMMUNCIATIONS) ("the Seller") BY
TELEMASTERS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction and Nature of the Acquisition
Shareholders are referred to the cautionary announcements published on SENS
during October 2008 and are advised that TeleMasters has entered into an
agreement, dated 23 October 2008, with African Paradigm Communications
(Pty) Limited, trading as One Communications ("One Communications") in
terms of which it acquired the business and assets of the leased-cost
routing lines of One Communications, for an undisclosed consideration.
The effective date of the Acquisition is October 2008.
2. Rationale for the Acquisition
The acquisition is in line with TeleMasters strategy to grow its least-cost
routing business both organically and through acquisition.
3. Financial information
The table below sets out the pro forma financial effects of the
transaction, based on TeleMaster`s unaudited interim results for the 9
months ended 30 June 2008. The financial effects are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of the company`s results, financial position, changes in equity,
results of operations or cash flows after the transaction.
It has been assumed for purposes of the pro forma financial effects that
the above transaction took place with effect from 1 October 2007 for income
statement purposes and 30 June 2008 for balance sheet purposes:
Before After %
Change
Profit per share (cents) 19.57 22.10 12.93
Headline earnings per 19.57 22.97 17.35
share (cents)
Weighted number of shares 42 000 42 000
in issue (`000)
Net asset value per share 40.91 43.44 6.19
(cents)
Net tangible asset value 36.91 33.40 (9.51)
per share (cents)
The "Before" financial information has been extracted, without adjustment
from the published unaudited consolidated results of TeleMasters for the 9
months ended 30 June 2008.
The "After" column represents the effects of the transaction. The "%
Change" column compares the "After" column to the "Before" column.
4. Suspensive Conditions
The Acquisition is subject to, inter alia, the following suspensive
conditions:
- the approval by the Purchaser of the original contracts and being
satisfied that they are properly completed, enforceable and valid
contracts capable of cession unilaterally by the Seller to the
Purchaser;
- the Seller and Jason Graaff signing a restraint of trade agreement
preventing them from trading in competition to the business sold save
as they may currently be trading with current customers in terms of a
supply agreement with Huge Telecom (Pty) Limited;
- the receipt of any requisite regulatory approvals, including but not
limited to the JSE, SRP and Competition Commission by not later than
14 days from the date of signature of this agreement;
- the agreement being ratified and approved by the respective boards of
the Seller and the Purchaser within 5 days of signature dates;
- the seller passing and registering a special resolution authorising
the sale of the business; and
- the Supplier ceding and assigning the Agency agreement, supplying the
least-cost routing lines for the customers to the Purchaser on terms
no less favourable than those set out in the existing agreement
between the Supplier and Seller. In the alternative the conclusion of
a new agreement between the Supplier and the Purchaser to allow the
Purchaser to operate the existing business on terms no less favourable
than those of the existing agreement between the Supplier and Seller.
5. Withdrawal of Cautionary Announcement
Shareholders are advised that the previous cautionary announcements
regarding dealing in TeleMasters securities are hereby withdrawn.
Sandton
27 October 2008
Designated Advisor
Arcay Moela Sponsors (Proprietary) Limited
Date: 27/10/2008 17:33:01 Produced by the JSE SENS Department.
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