| Wed 22 Jul 2009, 16:05 | | VMK - Verimark Holdings - Postponement Of Court Hearing In Respect Of |
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VMK
VMK
VMK - Verimark Holdings - Postponement Of Court Hearing In Respect Of
Sanctioning Of Scheme Of Arrangement
Verimark Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1998/006957/06
Share Code: VMK ISIN Code: ZAE000068011
("Verimark" or "the Company")
POSTPONEMENT OF COURT HEARING IN RESPECT OF SANCTIONING OF SCHEME OF ARRANGEMENT
Shareholders are referred to the announcement released on SENS on 15 July 2009
regarding the results of the meeting of the ordinary shareholders of Verimark on
Monday, 13 July 2009 at the registered offices of Verimark ("the scheme
meeting") ("the results announcement"). Shareholders are also referred to the
other prior announcements released on SENS on 11 May 2009 and 26 June 2009
detailing the proposed scheme of arrangement in terms of section 311 of the
Companies Act. The scheme of arrangement was proposed by The Van Straaten
Family Trust ("VSFT") between Verimark and the shareholders of Verimark (other
than Prime Rentals CC, Mirror Ball Investments 429 (Proprietary) Limited and
Selcovest 35 (Proprietary) Limited ("the excluded members")), in terms of which
VSFT will acquire all of Verimark`s issued shares not already held by it
(excluding the ordinary shares held by the excluded members), representing
approximately 37% of the ordinary shares ("the scheme shares"), for a cash
consideration of R21 136 164, equaling 50 cents per share ("the scheme"). The
scheme, if implemented, will be followed by an application by the Company for
the termination of the listing of the shares in its issued share capital on the
JSE Limited ("the JSE"). Details of the scheme are contained in the circular
issued to Verimark shareholders on 26 June 2009 ("the circular").
As detailed in the results announcement, the voting by VSFT and the excluded
members in respect of the scheme was questioned. The Securities Regulation
Panel ("the SRP") and funds under the control of Brait South Africa Limited have
accordingly made submissions to the South Gauteng High Court (Johannesburg)
("the Court") to oppose the sanctioning of the scheme.
Shareholders are hereby advised that on 21 July 2009, the Company and the
opposing parties agreed to a postponement and as such the matter has been placed
on the opposed roll for hearing on 4 August 2009 or such later date as the Court
may decide.
The independent directors of Verimark have convened with VSFT to assess current
developments. VSFT requested the Board of Directors of Verimark ("the Board")
to inform shareholders of the Company of the primary reasons for its decision
not to abstain from the voting process, being:
- VSFT became aware that two shareholders would vote against the scheme at
the scheme meeting, one being a fund manager holding approximately 25% of the
scheme shares, seemingly intent on leveraging its position to obstruct the
scheme in order to extract an unrealistically high price. The other shareholder
is a direct competitor of the Company. Only 23 scheme members, less than 3% of
all shareholders by number, were present in person or by proxy at the scheme
meeting. VSFT considered it fair for the Court to determine ultimately whether
the scheme should be sanctioned, having regard to the motives of the two
shareholders and considering the significant number of other minorities
(approximately 900 scheme members) who abstained from the vote; and
- legal opinion was obtained that it was legal to vote.
The Board confirms its view that the offer by VSFT is in the best interests of
minority shareholders, for the following two key reasons:
- the offer of 50 cents per share is 43.7% above the high end of the
valuation range in the opinion of the independent expert, appointed by the
independent committee of the Board. The fair value range per Verimark ordinary
share was determined to be between 28.4 and 34.8 cents per share. The offer is
also 79.2% higher than the net asset value per share of the Company and 150%
higher than the JSE share price on the day before the offer was made;
- it is uncertain how long it will take the Company to stage a recovery in
profitability and the prospects in the short to medium term do not look
encouraging. VSFT believes that the entrepreneurial culture of the Company is
better suited to an unlisted environment where the limited management resources
can be focused on operational issues without the distraction of regulatory and
shareholder issues; and
the Board confirms that, pursuant to all reasonable enquiries made in this
regard they have considered all statements of fact and opinion, that they
accept, individually and collectively, full responsibility for the accuracy of
the information given and that they certify that, to the best of their knowledge
and belief, there are no omissions of facts or considerations which would make
any statement of fact or opinion false or misleading.
Further announcements regarding the sanctioning of the scheme or otherwise will
be released on SENS and published in the press in due course.
22 July 2009
Corporate Advisor and Sponsor: PSG Capital (Proprietary) Limited
Attorneys: Glyn Marais Inc
Date: 22/07/2009 16:05:28 Produced by the JSE SENS Department.
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