| Mon 7 Jun 2010, 17:00 | | TMT - Trematon - Firm Intention By Tremgrowth (Proprietary) Limited to make an |
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TMT
TMT
TMT - Trematon - Firm Intention By Tremgrowth (Proprietary) Limited to make an
offer to shareholders of Club Mykonos Langebaan Limited by way of a scheme of
arrangement in terms of section 311 of The Companies Act 61 Of 1973, as amended
Trematon Capital Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 1997/008691/06
Share code: TMT
ISIN: ZAE000013991
("Trematon" or "the Company")
FIRM INTENTION BY TREMGROWTH (PROPRIETARY) LIMITED TO MAKE AN OFFER TO
SHAREHOLDERS OF CLUB MYKONOS LANGEBAAN LIMITED BY WAY OF A SCHEME OF ARRANGEMENT
IN TERMS OF SECTION 311 OF THE COMPANIES ACT 61 OF 1973, AS AMENDED
1. INTRODUCTION
1.1 Further to the cautionary announcements released on SENS on 18 May and 24
May 2010 by Trematon, the company hereby announces that a notice of firm
intention to make an offer to acquire the entire issued share capital of
Club Mykonos Langebaan Limited ("CML") has been delivered to the board of
directors of CML by Tremgrowth (Proprietary) Limited ("Tremgrowth"), a
wholly owned subsidiary of Trematon ("the transaction").
1.2 The purpose of this announcement is to provide Trematon shareholders with
the salient terms of the offer.
2. The transaction
2.1 It is proposed that Tremgrowth will acquire, by way of a scheme of
arrangement in terms of section 311 of the Companies Act, No. 61 of 1973,
as amended (the "Companies Act") ("the scheme"), all the issued ordinary
shares in the capital of CML ("CML shares") from CML shareholders other
than Tremgrowth ("CML shareholders"). Tremgrowth currently holds CML
shares representing 34,61% of the issued share capital of CML.
2.2 The implementation of the offer and scheme will be subject to the
conditions precedent referred to in paragraph 10 below.
3. Terms of the offer
3.1 In terms of the transaction CML shareholders may elect to receive a cash
consideration per CML share of R2.00 ("cash consideration") or to retain
their CML shares ("scheme retention alternative"). If a CML shareholder
fails to make a valid election he will be deemed to have elected the cash
consideration.
3.2 The operative date of the transaction is expected to be during the third
quarter of 2010.
4. Rationale
4.1 Trematon is a JSE Limited ("JSE") listed investment group with investments,
subsidiaries and associates engaged in a variety of industries which make
up its investment portfolio. Most of the investments are in the Western
Cape and are related in some way to property or leisure. The company also
engages in investment and trading in shares which are not specific to any
industry.
The primary aim of the group is to generate superior risk-adjusted long-
term returns for its shareholders.
4.2 CML is an unlisted public company with more than 7 000 shareholders. Until
2005 there was no trade in CML shares and it was only thereafter that
informal, and at times inefficient and illiquid, "over the counter" trading
in CML shares took place. Since the contraction in the property market
around 2008 and 2009, the marketability and the market value of CML shares
has substantially decreased.
The major assets of CML are undeveloped land in the Club Mykonos Resort and
a minority stake (29.6%) in the Mykonos Casino.
4.3 Tremgrowth currently holds a 34,61% interest in CML. Trematon would like to
consolidate its control of the operations of CML and the acquisition of
more than 50% of the issued shares would achieve this objective. This
would enable more efficient decision making with regard to strategy and/or
major capital projects.
Trematon wishes to buy more shares in CML and there appears to be a large
body of CML shareholders who wish to sell their shares from time to time
but no efficient, cost-effective mechanism exists to conclude these
transactions on a material scale. The proposed scheme achieves the
objectives of both Trematon and shareholders who wish to sell at a fair
price.
5. Pro forma financial effects of the transaction on Trematon shareholders
The unaudited pro forma financial effects of the transaction on Trematon
shareholders set out below are based on the published unaudited Trematon
results and the published unaudited CML results for the six and eight
months ended 28 February 2010 respectively. The unaudited pro forma
financial effects are the responsibility of the board of directors of
Trematon and have been prepared for illustrative purposes only and because
of their pro forma nature may not give a fair reflection of Trematon`s
financial position or results of operations after the transaction.
Before After % change
Profit per share 10.6 9.0 (15.1%)
(cents)
Headline profit 17.7 16.1 (9.0%)
per share
(cents)
NAV and tangible 92.0 92.0 0%
NAV per share
(cents)
Number of shares 174 872 545 174 872 545 0%
in issue
Weighted average 174 872 545 174 872 545 0%
number of shares
in issue
Notes and assumptions:
1.) The financial information in the "Before" column is based on the
published unaudited interim results of Trematon for the six months
ended 28 February 2010.
2.) The financial information in the "After" column assumes that:
a. Trematon acquired CML with effect from 1 September 2009 for
income statement purposes, and with effect from 28 February 2010
for balance sheet purposes;
b. Trematon will acquire all of the CML shares not already held by
Tremgrowth, excluding those shares in respect of which
irrevocable undertakings were received in terms of paragraph 9
below and that a total of 17 164 867 (48.76%)CML shares are
therefore eligible to elect acceptance of the cash consideration
of R2,00 for each CML share.
c. The 12 183 065 (34.61%)shares already held by Tremgrowth are
excluded;
d. A total of 5 852 566 (16.63%)CML shares have irrevocably
undertaken to elect the scheme retention alternative as set out
in paragraph 9 below;
e An after-tax cost of capital of 10% was applied to the cash
consideration of the offer.
6. CATEGORISATION OF TRANSACTION
In terms of the JSE Listings Requirements, the transaction will be a
category 2 transaction and will not require the approval of Trematon
shareholders.
7. SCHEME MEETING FOR CML SHAREHOLDERS
CML shareholders will be required to consider and approve the scheme in a
scheme meeting. A circular with details of the scheme, its salient dates
and a notice of the scheme meeting will be posted to CML shareholders in
terms of the provisions of the Securities Regulation Panel ("SRP") Code on
Takeovers and Mergers ("SRP Code").
In terms of S 311(2)(b) of the Companies Act, the scheme must be approved
by a majority representing not less than three-fourths of the votes
exercisable by the CML shareholders (other than Tremgrowth) present and
voting, either in person or by proxy, at the scheme meeting.
8. Guarantee
As required under the Code, Trematon has provided confirmation to the
satisfaction of the SRP (in the form of an irrevocable bank guarantee) that
it has sufficient financial resources to pay the cash consideration in
respect of the CML scheme shares having regard to the irrevocable
undertakings detailed in paragraph 9 below.
9. CML Shareholder undertaking
As at the date of this announcement 13 CML shareholders, holding 5 852 566
CML shares, being 16.63% of the total issued share capital of CML, have
irrevocably undertaken (without affecting their right to vote on the scheme
at the scheme meeting) to elect the scheme retention alternative in the
event that the scheme is sanctioned by the High Court.
10. Conditions precedent to the scheme
The implementation of the scheme is subject to the following conditions
precedent:-
10.1 the SRP approving the necessary documentation to be distributed to CML
shareholders to the extent required in law;
10.2 the High Court of South Africa (Western Cape High Court, Cape Town) ("the
Court") ordering the convening of a scheme meeting to approve the scheme;
10.3 the approval of the scheme by a majority of scheme members, representing
not less than three-fourths of the votes exercisable by the scheme members
present and voting, either in person or by proxy, at the scheme meeting;
10.4 the Court sanctioning the scheme in terms of the Companies Act;
10.5 the lodging of a certified copy of the Order of Court sanctioning the
scheme with, and registration thereof by, the Companies and Intellectual
Properties Registration Office in terms of the Companies Act;
10.6 Tremgrowth upon completion of the scheme, and having regard to the CML
shares already held by it, being the holder of not less than 50% plus 1 CML
share of the entire issued share capital of CML.
Trematon will be entitled to waive the condition in 10.6. The fulfilment or
otherwise of the conditions precedent will be announced by CML in the
press.
11. OPINIONS AND RECOMMENDATIONS
In terms of the Code, the directors of CML must obtain appropriate external
advice as to how the transaction will affect CML shareholders, and must
disclose the substance of such advice to CML shareholders. The directors
of CML have appointed PKF (Cpt) to provide such advice and their full
report will be included in the circular to be sent to CML shareholders in
connection with the transaction.
12. Withdrawal of cautionary announcement
Trematon shareholders are advised that, as a result of the publication of
this announcement, the relevant cautionary announcement is now withdrawn.
Cape Town
7 June 2010
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
Attorneys to the Scheme
Bernadt Vukic Potash & Getz
Date: 07/06/2010 17:00:01 Produced by the JSE SENS Department.
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