| Fri 15 May 2009, 15:31 | | DON - The Don Group - Acquisition of Ikapa Tours & Travel (Proprietary) Limited |
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DON
DON
DON - The Don Group - Acquisition of Ikapa Tours & Travel (Proprietary) Limited
THE DON GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1946/023123/06)
Share code: DON & ISIN: ZAE000008462
("The Don" or "the company")
ACQUISITION OF IKAPA TOURS & TRAVEL (PROPRIETARY) LIMITED
1. INTRODUCTION AND RATIONALE
Shareholders are advised that The Don has entered into an agreement to
acquire a 51% shareholding in Ikapa Tours & Travel (Proprietary) Limited
("Ikapa") ("the acquisition"). lkapa is an inbound tour operator based in
Cape Town that facilitates all aspects of its clients` requirements
including flights and accommodation, car hire and long distance tours
throughout South Africa as well as Botswana, Namibia, Zambia and to the
Victoria Falls in Zimbabwe. These tours incorporate the essential sights
and routes for the first time foreign traveller. Ikapa also provides day
tours in Cape Town and surrounding areas. Ikapa owns a fleet of 20 luxury
bus liners that it utilises for its inbound tour operations.
The board of The Don believe that the acquisition will be beneficial as it
will primarily facilitate an increase in the occupancy rates for the
company by way of direct access to Ikapa`s clientele while expanding The
Don`s service offering in the tourism industry.
The immediate benefit is that The Don`s suite hotels obtain marketing
exposure, especially to organised tour group customers, internationally and
domestically which had not previously existed.
2. THE ACQUISITION
2.1 Vendors
The Don will acquire 4 335 shares in Ikapa from the Nonki Twana Family
Trust ("Nonki"), Impepho Travel Corporation (Proprietary) Limited
("Impepho"), Louwrens Erasmus Smit ("Louwrens"), Desmond Windt ("Desmond")
and the Ikapa Tours & Travel Employee Share Incentive Scheme Trust
("Employee Trust").
2.2 Consideration
The total purchase consideration of R7 270 055 was paid on the effective
date as follows:
- R999 527 to Nonki, Louwrens and Desmond in proportion to the number of
shares held by each of them;
- R2 550 806 into a trust account held with a firm of attorneys, which
payment shall discharge of the security previously provided by Nonki,
Louwrens, Desmond and the Employee Trust on their shares; and
- the balance of the total purchase consideration paid by The Don, being
an amount of R3 719 722, shall be treated as a shareholders` loan to
Ikapa. The loan shall bear interest at a rate of prime less 2%.
The total purchase consideration was paid out of the cash reserves of the
company.
2.3 Conditions precedent and effective date
All conditions precedent in respect of the acquisition have been fulfilled.
The effective date of the acquisition was 4 May 2009, being the 5th
business day after the day on which the last of the suspensive conditions
were fulfilled.
3. PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The table below sets out the unaudited pro forma financial effects of the
acquisition on The Don`s earnings per share, headline earnings per share,
net asset value per share and tangible net asset value per share.
The unaudited pro forma financial effects have been prepared to illustrate
the impact of the acquisition on the reported financial information of The
Don for the six months ended 31 December 2008, had the acquisition occurred
on 1 July 2008 for income statement purposes and on 31 December 2008 for
balance sheet purposes.
The unaudited pro forma financial effects have been prepared using
accounting policies that comply with International Financial Reporting
Standards and that are consistent with those applied in preparing the
annual financial statements of The Don for the year ended 30 June 2008.
The unaudited pro forma financial effects, which are the responsibility of
the directors, are provided for illustrative purposes only and, because of
their pro forma nature, may not fairly present The Don`s financial
position, changes in equity, results of operations or cash flow.
Before the After Percenta
acquisitio the ge
n acquisit change
ion (%)
Earnings per share (cents) 0.15 (0.14) (190)
Headline earnings per share 0.15 (0.14) (190)
(cents)
Net asset value per share 53.3 53.3 -
(cents)
Tangible net asset value per 53.3 52.2 (2)
share (cents)
Weighted average number of 294 485 294 485
shares in issue (000`s)
Notes:
1. The amounts in the "Before the acquisition" column have been extracted
from the reviewed interim results of The Don for the six months ended
31 December 2008.
2. The amounts in the "After the acquisition" column reflect the
financial effects of the acquisition on The Don.
3. The effects on earnings per share and headline earnings per share are
calculated based on the assumption that the acquisition was effected
on 1 July 2008.
4. The effects on net asset value per share and tangible net asset value
per share are calculated based on the assumption that the acquisition
was effected on 31 December 2008.
4. CLASSIFICATION OF THE ACQUISITION
The acquisition is classified as a Category 2 transaction in terms of the
Listings Requirements of the JSE Limited. As a result of Ikapa becoming a
subsidiary of The Don, the articles of association of Ikapa will be amended to
conform to Schedule 10 of the Listings Requirements of JSE Limited.
15 May 2009
Sponsor
Merchantec (Proprietary) Limited
Date: 15/05/2009 15:31:02 Produced by the JSE SENS Department.
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