| Tue 4 Oct 2011, 7:05 | | KGM - Kagiso Media Limited - Withdrawal of Cautionary |
|
KGM
KGM
KGM - Kagiso Media Limited - Withdrawal of Cautionary
KAGISO MEDIA LIMITED
Incorporated in the Republic of South Africa)
Reg. No 1957/000036/06
Share Code: KGM
ISIN:ZAE000014007
("Kagiso Media" or "the Company")
ANNOUNCEMENT RELATING TO THE DISPOSAL OF KAGISO MEDIA`S 50% SHARES AND CLAIMS
IN LEXISNEXIS (PROPRIETARY) LIMITED ("LEXISNEXIS") AND WITHDRAWAL OF
CAUTIONARY
1. INTRODUCTION
Further to the cautionary announcement released by Kagiso Media on SENS
on 22 September 2011, Kagiso Media shareholders are advised that Kagiso
Media has accepted an offer from Reed Elsevier South Africa ("Reed
Elsevier") for its 50% shareholding in and claims against LexisNexis
("Sale Interest") and is in the process of negotiating the terms of a
sale and purchase agreement in this respect ("the Disposal"). Kagiso
Media holds a 50% interest in the LexisNexis joint venture.
The purpose of this announcement is to provide Kagiso Media shareholders
with the salient terms of the Disposal, which are set out below.
2. RATIONALE OF THE DISPOSAL
LexisNexis is a provider of content-enabled workflow solutions for
professionals in the legal, risk management, corporate, government, law
enforcement, accounting and academic markets. It has a unique combination
of Butterworths authoritative content, powerful online research, and
advanced productivity tools, which help companies and individuals to stay
one step ahead in a constantly changing corporate, political or legal
environment.
The evolution of Kagiso Media strategy has led to a change in its
investment criteria as it became apparent that a more proactive approach
to managing its assets would enhance value creation in the longer term.
In terms of this strategy, it was imperative that Kagiso Media assume
majority control of the joint venture. However Kagiso Media`s partner in
the joint venture would not agree to Kagiso Media buying up. Kagiso
Media`s approach is on the back of a strategic decision to attain a 50+%
shareholding in all its investments. Pursuant to this, Reed Elsevier
subsequently offered to purchase Kagiso Media`s shares in LexisNexis. The
company believes that the agreed price of R565 million represents a good
outcome for Kagiso Media shareholders.
3. TERMS AND DETAILS OF THE DISPOSAL
In terms of the Disposal, the purchase price to be paid for the Sale
Interest will be an amount equal to R565 million (five hundred and sixty-
five million), payable in cash. Kagiso Media will apply the proceeds from
the Disposal to other key projects currently being pursued by Kagiso
Media.
LexisNexis declared and paid a dividend to its current shareholders of
R53.9 million on 30 September 2011.
4. PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL ON KAGISO MEDIA SHAREHOLDERS
The pro forma financial effects below for which the Kagiso Media board of
directors are responsible, illustrate the impact of the Disposal on the
most recently published results of Kagiso Media for the year ended 30
June 2011. Pro forma financial information is presented for illustrative
purposes only on the assumption that the Disposal was implemented with
effect from 1 July 2010 for purposes of the statement of comprehensive
income and on 30 June 2011 for purposes of the statement of financial
position and, because of its nature, may not fairly present the financial
position, changes in equity and results of operations or cash flows post
the implementation of the Disposal.
The pro-forma financial effects are as follows:
Before Post the %
the Disposal change
Disposal
Basic earnings per share (cents) (1) 152.2 423.9 179%
Headline earnings per share (cents) 153.1 119.2 -22%
(1)
Net asset value per share (cents) (2) 519.0 824.6 59%
Tangible net asset value per share 165.0 491.4 198%
(cents) (2)
Number of ordinary shares in issue 133,792 133,792
(`000)
Weighted average number of ordinary 133,792 133,792
shares in issue (`000)
Notes and assumptions:
1. The basic earnings per share and headline earnings per share have
been adjusted for the following items:
- The de-recognition of the earnings from LexisNexis of R45
million;
- The recognition of the profit on the Disposal of R409 million,
after taking into account estimated Capital Gains Tax ("CGT")
arising from the Disposal; and
- Estimated transaction costs of R2 million.
- Interest income based on the net proceeds after tax and
transaction costs has not been included as the cash proceeds
are expected to be utilised in the normal course of business.
2. The net asset value and tangible net asset value have been adjusted
for the following:
- The de-recognition of the LexisNexis net assets of R82 million
and the LexisNexis tangible net assets of R54 million;
- The increase in the cash balance by R491 million as a result of
the cash proceeds received from the Disposal (net of CGT); and
- Transaction costs based on current estimates of R2 million
which will be paid in cash.
- This includes earnings from LexisNexis of R45 million.
5. SUSPENSIVE CONDITIONS
The Disposal has been approved by the board of directors of Kagiso Media
but remains subject to the fulfillment of the following, inter-alia,
suspensive conditions:
- Finalisation and signature of the sale and purchase agreement;
- Regulatory approvals;
- Completion of a due diligence exercise, and
- Kagiso Media shareholder approval.
All Suspensive Conditions are expected to be fulfilled by November 2011.
The Disposal will be effective three business days following the date
upon which the last of the suspensive conditions have been fulfilled.
6. CATEGORISATION AND WITHDRAWAL OF CAUTIONARY
The Disposal is classified as a Category 1 transaction in terms of the
JSE Listings Requirements and accordingly a circular with the information
in respect of the Disposal and incorporating a notice convening a general
meeting of Kagiso Media shareholders will be posted to the shareholders
in due course.
Kagiso Media shareholders are advised that, as a result of the
publication of this announcement, the relevant cautionary announcement is
now withdrawn and caution is no longer required to be exercised when
dealing in their Kagiso Media shares.
3 October 2011
Sponsor : Investec Bank Limited
Date: 04/10/2011 07:05:24 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.
