| Mon 6 Dec 2010, 16:53 | | SIM/VIL - Simmers/Village - Detailed Joint Cautionary Announcement |
|
SIM VIL
SIIF VIL
SIM/VIL - Simmers/Village - Detailed Joint Cautionary Announcement
Simmer & Jack Mines Limited
(Registration number 1924/007778/06)
Share Code: SIM
ISIN: ZAE000006722
("Simmers")
Village Main Reef Gold Mining Company (1934) Limited
(Registration number 1934/0057034/06)
Share Code: VIL
ISIN: ZAE000007720
("Village")
DETAILED JOINT CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Simmers shareholders and Village shareholders are advised that Simmers and
Village have entered into an agreement ("the Agreement") in respect of a
proposed merger between Village and Simmers, to be implemented by the
acquisition by Village of the majority of Simmers` assets in consideration
for the issue to Simmers of a majority shareholding in Village ("the
Acquisition"), and the subsequent unbundling by Simmers of that shareholding
to Simmers` shareholders ("the Unbundling"). The Acquisition and the
Unbundling being referred to collectively as "the Proposed Transaction".
DESCRIPTION OF THE PROPOSED TRANSACTION
Subject to the fulfilment or waiver of certain conditions precedent,
including those listed below, it is envisaged that:
- Village will acquire the following from Simmers (collectively "the Sale
Assets"):
- 100% (one hundred percent) of the issued share capital of Simmer
and Jack Investments (Proprietary) Limited ("S & J Investments"), a
wholly-owned subsidiary of Simmers, which houses the
Buffelsfontein, Hartebeesfontein and Tau Lekoa Mines;
- approximately 33% (thirty three percent) of the issued share
capital of First Uranium Limited ("FIU"), which has a primary
listing on the Toronto Stock Exchange and a secondary listing on
the JSE Limited ("JSE");
- approximately 392 874 (three hundred and ninety two thousand eight
hundred and seventy four) South African Rand denominated secured
convertible notes issued by Mine Waste Solutions (Proprietary)
Limited with a face value of R1 000 (one thousand rand) per note,
convertible into approximately 42 200 000 (forty two million two
hundred thousand) ordinary shares in FIU at the option of the
holder ("MWS Notes").
- The aggregate purchase consideration will be approximately
R1,314,527,000 (one billion three hundred and fourteen million five
hundred twenty seven thousand rand) ("Purchase Consideration") to be
settled by Village issuing to Simmers approximately 597,512,000 (five
hundred and ninety seven five hundred and twelve thousand) Village
shares at R2.20 per Village share, which Simmers will be obliged to
unbundle to its shareholders as soon as possible thereafter, and the
assumption of certain liabilities of Simmers. The Purchase Consideration
implies an exchange ratio based on a value of R1.05 per Simmers share,
which represents a premium of 14.7% to the volume weighted average price
at which a Simmers share traded on the JSE for the 30 days preceding the
date of this announcement.
RATIONALE
From Village`s perspective, the Proposed Transaction is in line with
Village`s stated objective to build greater mass to transform Village into a
company with a diversified portfolio of self-sustaining mining companies. If
implemented, the Proposed Transaction will represent the third transaction in
pursuance of this strategy and enable Village to pursue further consolidation
in the junior mining assets arena.
Simmers has contemplated a number of different potential transactions and
options over the last twelve months to extract value for Simmers`
shareholders and to place it on a stronger footing. The Simmers board
unanimously supports the Proposed Transaction as it is of the view that from
Simmers` perspective, the Proposed Transaction will provide Simmers with a
clean break from its history over the last few years, whilst allowing the
existing Simmers shareholders to remain exposed to and the controlling
shareholders in respect of the current Simmers operations. In addition, the
merged entity will have better access to capital markets to fund future
growth and the assets will be managed by an experienced management team.
The combined entity will hold a high grade platinum asset via Lesego, gold
and antimony assets via Consolidated Murchison Mine ("Cons Murch") (if the
acquisition of Cons Murch is implemented pursuant to the circular issued in
respect of Cons Murch on 3 December 2010), gold assets via S&J Investments
and uranium exposure via FIU and will have the potential to develop into one
of South Africa`s large diversified mining companies.
PROPOSED CONDITIONS PRECEDENT
The Proposed Transaction will be subject to customary conditions precedent,
including, inter alia:
- By not later than 2 March 2011 or such later date as the parties may
agree to in writing, the approval by Simmers shareholders of all of the
resolutions required to give effect to the Proposed Transaction;
- By not later than 1 May 2011 or such later date as the parties may agree
to in writing:
- the approval by Village shareholders of all of the resolutions
required to give effect to the Proposed Transaction;
- where applicable, the registration of any special resolutions by
the Registrar of Companies;
- the Securities Regulation Panel ("SRP") waiving any requirement on
the part of Simmers in terms of the Securities Regulation Code on
Takeovers and Mergers and the rules of the Securities Regulation
Panel ("SRP Code") to extend a mandatory offer to the shareholders
of Village to acquire all their shares in Village;
- to the extent required, consents being obtained from the financiers
of Simmers in respect of, inter alia, the assignment by Simmers of
all its rights under the relevant finance agreement to Village;
- the approval of the Competition Authorities in terms of Chapter III
of the Competition Act 89 of 1998, as amended, of the Proposed
Transaction, either unconditionally or subject to such conditions
as Village and Simmers may approve in writing;
- all other required regulatory approvals in relation to the Proposed
Transaction, including from the JSE and the SRP, the Exchange
Control Division of the South African Reserve Bank and, to the
extent applicable, the Minister of Mineral Resources.
DUE DILIGENCE INVESTIGATION AND RIGHT TO TERMINATE
Village and Simmers are in the process of conducting confirmatory due
diligence investigations, which will be finalised by not later than 15
January 2011 (or such later date as the parties may agree to in writing), and
pursuant to which each of Village and Simmers may elect not to proceed with
the Proposed Transaction in certain limited circumstances. Shareholders will
be informed of the outcome of such due diligence investigations in due
course.
In addition, the parties shall be entitled to terminate the Agreement at any
time prior to the closing date in certain circumstances, including, the
occurrence of an objectively determinable material adverse effect; either
party being liquidiated; a third party interdict or judgement is issued to
prevent the implementation of the Proposed Transaction.
FURTHER DOCUMENTATION AND SHAREHOLDERS TO EXERCISE CAUTION
If the Proposed Transaction is implemented on the basis set out above,
Simmers, and ultimately Simmers shareholders, will acquire approximately 66%
of the issued shares of Village, which will result in a reverse take-over of
Village in terms of the JSE Listings Requirements. Simmers and Village will
therefore be required to issue circulars complying, where applicable, with
the JSE Listings Requirements and SRP Code. As the Proposed Transaction
includes a disposal by Simmers as contemplated in section 228 of the
Companies Act 61 of 1973, Simmers will obtain appropriate external advice as
required under the SRP Code, and communicate the substance of such advice to
its shareholders in the form and manner approved by the SRP.
Pending further announcements, Simmers shareholders and Village shareholders
are advised to exercise caution in dealing in their Simmers and Village
shares.
6 December 2010
Financial advisor to Village
JPMorgan
Sponsor to Village
Macquarie First South Advisers (Pty)
Legal advisor to Village
Cliffe Dekker Hofmeyr Inc.
Transaction sponsor to Simmers
Java Capital
Financial advisor to Simmers
Sovereignty Capital
Legal advisor to Simmers
Bowman Gilfilan Inc.
Date: 06/12/2010 16:53:01 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.
