| Tue 15 Dec 2009, 8:20 | | OLI - O-Line Holdings - Detailed terms announcement regarding the Sale |
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OLI
OLI
OLI - O-Line Holdings - Detailed terms announcement regarding the Sale,
Subscription and Cooperation Agreement
O-Line Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 2006/034685/06
Share code: OLI
ISIN code: ZAE000110730
("O-Line" or "the Company")
Detailed terms announcement regarding the Sale, Subscription and
Cooperation Agreement entered into between O-Line, Tiso Group (Pty)
Limited ("Tiso Group"), Alizay Properties 46 (Pty) Limited ("Tiso SPV"),
a wholly owned subsidiary of the Tiso Group, and certain current
shareholders of O-Line, being Graeme Shaw Smart, Richard Ian Jay, Edwin
Andrew Jay, David Ronald Fensham, Thomas Loughran and Edzard Adolph Carl
Verseput ("the key shareholders") (collectively referred to as "the
Parties") insofar as the acquisition of an approximately 34.09% interest
by Tiso SPV in O-Line is concerned ("the Tiso Transaction").
1 Introduction
Shareholders of O-Line ("O-Line shareholders") are referred to the
O-Line cautionary announcement dated 2 September 2009 and the
announcement on SENS dated 1 October 2009 ("the October SENS") in
terms of which Tiso SPV, O-Line and the key shareholders entered into
a Heads of Agreement ("the founding agreement") for the acquisition
of an approximate 34.09% interest in O-Line ("the Required Number of
O-Line Shares").The main purpose of the founding agreement was to
encapsulate a broad framework of preliminary terms and conditions of
the Tiso Transaction, all of which was to be incorporated into a
further definitive agreement.
As set out in the October SENS, the founding agreement represented
the salient terms of five related transactions being (1) the
Subscription, (2) the Share Sale, (3) the O-Line undertaking,(4) the
Tiso OTP and (5) the O-Line Buy-back (all of which have been defined
in the October SENS). Further thereto, shareholders are advised that
the Parties have now concluded the definitive agreement as they have
entered into a Sale, Subscription and Cooperation Agreement ("the SSC
Agreement") on 09 December 2009 ("the Signature date"). The SSC
Agreement incorporated the salient terms of the Tiso transaction as
set out in the founding agreement, save for a few additions and/or
amendments as set out hereunder.
2 The Subscription
2.1 The salient features of the Subscription remains unchanged from the
October SENS save that the effective date of the Subscription has been
amended from 30 September 2009 to 11 December 2009.
2.2 All transaction funding has been secured and the required payments
and transfers have been effected on 11 December 2009.
2.3 All conditions in respect of the Subscription have become
unconditional.
3 The Share Sale
3.1 The salient features of the Share Sale remains unchanged from the
October SENS.
3.2 All transaction funding has been secured and the required payments
were made on 11 December 2009. Transfers of the shares concerned are in
the process of being effected.
3.3 All conditions in respect of the Share Sale have become
unconditional.
(Note: As set out in the October SENS, Tiso SPV wishes to hold the
Required Number of O-Line Shares. Under the Subscription and the
Share Sale, Tiso SPV acquired an effective 25.16% equity interest in
O-Line. Thus, an equity interest of 8.93% remains to be secured by
Tiso SPV ("the outstanding equity stake"). As set out in the October
SENS, it is envisaged that the outstanding equity stake is to be
secured under either of the O-Line undertaking, and/or the Tiso OTP
and/or the O-Line Buy-back, as the case may be.)
4 O-Line undertaking
The salient features of the O-Line undertaking as amended in the
SSC Agreement, are:
4.1 Each of the key shareholders irrevocably undertook, from the
Signature date until 31 January 2010, to use their reasonable commercial
endeavours to procure that current O-Line shareholders, other than the
key shareholders, will enter into agreements with Tiso SPV to sell such
amount of O-Line shares so as to procure the Required Number of O-Line
Shares.
4.2 The aforementioned purchase will be concluded on the same terms and
conditions as the Share Sale referred to in paragraph 3 above. In the
event that the purchase is not procured on such same terms and
conditions, Tiso SPV shall be under no obligation to enter into any
agreement with the concerned O-Line shareholder.
5 The Tiso OTP
5.1 Should Tiso SPV not have acquired in full the Required Number of O-
Line Shares in terms of the Subscription, the Purchase and the O-Line
undertaking, Tiso SPV shall be entitled, in its sole and absolute
discretion, to notify O-Line in writing, on or before 31 January 2010
that it wishes to make the Tiso OTP (hereinafter referred to as "the
Offer").
5.2 Should Tiso SPV notify O-Line in writing in accordance with the
provisions of paragraph 5.1 that it wishes to make the Offer, the Offer
shall be subject to inter alia the following terms and conditions -
5.2.1 the Offer shall be a general offer to the O-Line Shareholders
to acquire from them such amount of O-Line shares so as to procure the
Required Number of O-Line Shares on the basis of 1 (one) O-Line Share
for every 5 (five) O-Line Shares held by the O-Line Shareholders ("the
Offer Shares");
5.2.2 the price at which the Offer shall be made ("Offer Price")
will be an amount per share equal to the 30 Day VWAP of the O-Line
Shares up to the last practicable date prior to the posting of the
document containing the Offer ("Offer Document"), subject to a maximum
amount determined by Tiso SPV and stipulated in the Offer Document;
5.2.3 the Offer Document shall be posted to the O-Line Shareholders
as soon as reasonably possible after 31 January 2010, subject to the
requirements of the JSE Limited;
5.2.4 the Offer will remain open for acceptance for a period of 21
(twenty one) days from the date of posting of the Offer Document;
5.2.5 the O-Line Shareholders will be entitled to tender more than 1
(one) O-Line Share for every 5 (five) O-Line Shares held, provided that
should the aggregate number of O-Line Shares tendered in terms of the
Offer exceed the aggregate number of Offer Shares, then Tiso SPV and O-
Line shall agree on an allocation on a fair and equitable basis, so that
no more that the aggregate number of Offer Shares will be acquired by
Tiso SPV under the Offer. Tiso SPV shall under no circumstances by
obliged to accept tenders under the Offer for more than the aggregate
number of Offer Shares; and
5.2.6 upon closing of the Offer, the Offer Price shall be paid by
Tiso to those O-Line Shareholders who have accepted the Offer.
5.3 Each of O-Line and the key shareholders irrevocably undertakes that
it shall -
5.3.1 co-operate fully with Tiso SPV in the preparation and timely
completion of the Offer Document and all necessary other documents,
circulars, resolutions, announcements, applications and the like in
relation to the Offer and will do all such other things and take all
such steps as are commercially reasonable in order to procure the
successful and timely implementation of the Offer. The Offer Document
will be prepared by Tiso SPV`s advisors, provided that O-Line and its
advisors will be afforded reasonable opportunity to comment on the
content of the Offer Document and that all reasonable comments will be
taken into account; and
5.3.2 provide or procure that its advisors provide to Tiso SPV and
its advisors all such information as may be reasonably necessary in
order for Tiso SPV and its advisors to prepare the Offer Document.
6 The O-Line Buy-back
The Parties have opted not to pursue the provisions of the O-Line Buy-
back in the SSC Agreement as set out in the founding agreement. The
O-Line Buy-back as set out in the founding agreement is of no force
and effect.
7 Conditions Precedent to the the Tiso Transaction
All conditions precedent have been fulfilled and the Tiso Transaction
has become effective in full.
8 Pro Forma Financial Effects of the Tiso Transaction
The unaudited pro forma financial effects set out in the table below
have been prepared in accordance with the Listings Requirements of
the JSE Limited and the Guide on Pro Forma Financial Information
issued by The South African Institute of Chartered Accountants in
order to assist O-Line shareholders in their assessment of the impact
of the Tiso Transaction on the earnings per share ("EPS"), headline
earnings per share ("HEPS"), the net asset value ("NAV") and the
tangible NAV ("NTAV") per O-Line ordinary share as at 30 June 2009
and for the twelve months then ended. The pro forma financial effects
have been prepared for illustrative purposes only and, because of
their nature, they may not fairly present O-Line`s pro forma
financial position at 30 June 2009 and the results of its operations
for the twelve months then ended. The "Before" column has been
extracted without adjustment from O-Line`s published audited
financial statements for the year ended 30 June 2009 ("the Annual
Report"). The "After" column represents the effects after the Tiso
Transaction. The "% Change" column compares the "After" column to the
"Before" column.
Before 1 After 2,3 %
and 4 change
Earnings per share 21.80 19.87 -9%
(cents)
Headline earnings per 21.79 19.87 -9%
share (cents)
Net asset value per 88.96 90.91 2%
share (cents)
Tangible net asset 56.07 63.81 14%
value per share (cents)
Weighted average number 176 753 425 218 753 425 24%
of shares in issue
Actual number of shares 196 500 000 238 500 000 21%
in issue
Notes and assumptions:
1. The "Before" column has been extracted without adjustment from O-
Line`s published audited results for the year ended 30 June 2009;
2. The "After" column represents the effects after the Tiso
Transaction;
3. The pro forma earnings and headline earnings per share have been
adjusted to include the following:-
3.1 In calculating the EPS and HEPS it was assumed that a
portion of the proceeds of the Tiso Subscription amounting
to R42 million were used to settle all long- term and short-
term debt resulting in an after tax interest saving of
R4 938 480;
3.2 It was assumed that surplus cash proceeds emanating from the
Subscription (in excess of the settlement of long-term and
short-term debt referred to in paragraph 3.1) would be
applied to future strategic acquisitions. No adjustment to
EPS and HEPS have been effected insofar earnings to be
acquired in respect of such future strategic acquisitions;
and
3.3 The weighted average number of shares has been increased
with 42 million new shares so as to show the effect as if
the 42 million shares were in issue for the 12 months ended
30 June 2009.
4. The net asset value ("NAV") and net tangible asset value
("NTAV") per share have been adjusted to include the following:
4.1 The NAV and TNAV has been increased with R42 million
following the Subscription for 42 million shares at a rate
of R1 per share; and
4.2 The actual number of shares in issue has been increased with
the 42 million Subscription shares so as to calculate the
NAV and TNAV.
9 Categorisation of the Tiso Transaction
The Tiso Transaction represents a Category 2 transaction in terms of
the Listing Requirements of the JSE Limited.
10 Withdrawal of Cautionary
Further to the cautionary announcement released in the October SENS,
O-Line shareholders are advised that the aforementioned cautionary
announcement is hereby withdrawn and that caution is no longer
required to be exercised when dealing in O-Line securities.
15 December 2009
Selby
Designated Advisor: QuestCo Sponsors (Pty) Limited
Attorneys: Edwin Jay
Auditors: AM Smith & Company Inc
Date: 15/12/2009 08:20:34 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
