| Wed 21 Dec 2011, 16:08 | | MCU - m Cubed Holdings Limited - Category 1 acquisitions announcement |
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MCU
MCU
MCU - m Cubed Holdings Limited - Category 1 acquisitions announcement
M Cubed Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 1998/014568/06
Share code: MCU
ISIN: ZAE000033353
("m Cubed" or "the Company")
CATEGORY 1 ACQUISITIONS ANNOUNCEMENT
1. INTRODUCTION
1.1 Following a change in the major shareholder of m Cubed on or about 20
January 2011, when Trinity Asset Management (Pty) Limited ("Trinity")
acquired 32.96% of the shares in m Cubed, and the subsequent
appointment of a new management team, m Cubed has changed its strategy
to become an investment holding company.
1.2 As part of the implementation of its new strategy and its larger plan
to relist, m Cubed concluded an acquisition of shares in Convergenet
Holdings Limited ("Convergenet"), as more fully described in paragraph
2.1 below ("the Convergenet Acquisition"). As the JSE Limited
("JSE")deemed m Cubed to be a cash shell at the time, the JSE advised
m Cubed that the Convergenet Acquisition should be treated as a
Category 1 transaction for purposes of the JSE Listings Requirements
and requires shareholder ratification.
1.3 In addition to the above, shareholders are referred to the
announcement released on SENS on 12 October 2011 in terms of which
shareholders were reminded that the Company had until 31 December 2011
to enter into an agreement to make an acquisition of viable assets
which will satisfy the conditions for listing set out in the Listings
Requirements, failing which the Company`s listing on the JSE will be
terminated.
1.4 In light of the above, the board of m Cubed are pleased to advise
shareholders that the Company has entered into an acquisition
agreement ("Acquisition Agreement") in respect of the acquisition of
viable assets, as set out in paragraphs 2.2 and 2.3 below ("the
Proposed Acquisitions"), and therefore the Company`s listing on the
JSE will not be terminated on 31 December 2011. The Proposed
Acquisitions are regarded as Category 1 transactions in terms of the
JSE Listings Requirements and are therefore subject to shareholder
approval. Approval for the Proposed Acquisitions and ratification for
the Convergenet Acquisition will accordingly be sought at a general
meeting of m Cubed shareholders.
2. DETAILS OF THE CONVERGENET AND PROPOSED ACQUISITIONS
2.1 CONVERGENET ACQUISITION
2.1.1. Business carried on by Convergenet
Convergenet is a medium sized JSE listed South African
Information and Communication Technology Infrastructure
Company and its core competency is the delivery of total
information technology services. These skills are delivered
to the marketplace in three main areas namely software
development, service and support and products which are
positioned in the areas of e-learning, local government,
financial management, performance management and
collaboration.
2.1.2. Details of the Convergenet Acquisition
m Cubed concluded the Convergenet Acquisition on, and with
effect from 26 January 2011 and 14 February 2011, whereby m
Cubed acquired 54 076 650 and 923 350 ordinary shares,
respectively, totalling 55 000 000 ordinary shares in
Convergenet in the open market for a total cash
consideration of R12 707 322.
In addition to the aforementioned, m Cubed Holdings and
Specialised Lending, the wholly owned subsidiary of m Cubed
Holdings, acquired an additional 5 000 000 and 34 833 926
ordinary shares in Convergenet respectively for a total
consideration of R1 267 440 and R8 400 144 respectively.
2.1.3. Rationale for the Convergenet Acquisition
The Convergenet Acquisition formed part of the
implementation of the new strategy of m Cubed to have its
suspension lifted and to remain listed as an investment
holding company.
2.1.4. Convergenet Acquisition Consideration
The total Convergenet Acquisition consideration of R22 374
906 (twenty two million three hundred and seventy four
thousand nine hundred and six rand) was settled in cash.
2.1.5. Vendor Information
The Convergenet shares were acquired on the open market from
unknown, willing sellers.
2.2 BAUBA PLATINUM LIMITED ("Bauba") ACQUISITION
2.2.1. Business carried on by Bauba
Bauba is a platinum exploration company holding various
mineral prospecting rights for platinum group metals
mineralisation, collectively known as the Bauba Project. The
primary and immediate business objective of Bauba is the
exploration and development of the Bauba Project, with the
intention of establishing a mine. Bauba`s stated strategy is
to pursue acquisitive opportunities and to consider projects
with joint venture partners.
2.2.2 Details of the Bauba Acquisition
m Cubed will acquire, with effect from 14 December 2011, 2
300 000 ordinary shares in Bauba.
2.2.3. Rationale for the Bauba Acquisition
The Bauba Acquisition forms part of the implementation of
the new strategy of m Cubed to have its suspension lifted
and to remain listed as an investment holding company.
2.2.4. Bauba Acquisition Consideration
The total consideration payable in respect of the Bauba
Acquisition is the amount of R4 830 000 and will be settled
in cash. The consideration payable increases at the rate of
2% per month, not compounded from the 3rd business day
following the signature date of the Acquisition Agreement
until the date the consideration payable is settled in full.
In addition to the acquisition consideration, the Company
will be liable for all brokerage costs incurred in the
transaction.
2.2.5 Vendor Information
The shares in Bauba will be acquired from Afrasia Corporate
Finance (Proprietary) Limited.
2.3 GOLIATH GOLD MINING LIMITED ("Goliath") ACQUISITION
2.3.1. Business carried on by Goliath
Goliath is a mining investment company with interests in
South Africa. The Goliath group holds certain prospecting
rights and has submitted applications for other prospecting
rights, with the intention of exploring and acquiring other
mineral interests in Southern Africa.
2.3.2. Details of the Goliath Acquisition
m Cubed will acquire, with effect from 14 December 2011, 1
375 000 ordinary shares in Goliath.
2.3.3. Rationale for the Goliath Acquisition
The Goliath Acquisition forms part of the implementation of
the new strategy of m Cubed to have its suspension lifted
and to remain listed as an investment holding company.
2.3.4. Goliath Acquisition Consideration
The consideration payable in respect of the Goliath
Acquisition is the amount of R4 950 000 and will be settled
in cash. The consideration payable increases at the rate of
2% per month, not compounded from the 3rd business day
following the signature date of the Acquisition Agreement
until the date the consideration payable is settled in full.
In addition to the acquisition consideration, the Company
will be liable for all brokerage costs incurred in the
transaction.
2.3.5. Vendor Information
The shares in Goliath will be acquired from Afrasia
Corporate Finance (Proprietary) Limited.
3. CONDITIONS PRECEDENT
The Proposed Acquisitions set out in paragraphs 2.2 and 2.3 above are
conditional upon the approval thereof by shareholders in general
meeting.
4. PRO FORMA FINANCIAL INFORMATION
The table below summarises the unaudited pro forma financial effects
of the Convergenet Acquisition and Proposed Acquisitions ("the
Acquisitions") on m Cubed shareholders based on the interim results of
m Cubed for the period ended 31 August 2011.
The unaudited pro forma financial effects are the responsibility of
the m Cubed directors and have been prepared for illustrative purposes
only to provide information about how the Acquisitions may have
affected the financial position of the m Cubed shareholders on the
relevant reporting date. Due to its nature, the unaudited pro forma
financial effects may not be a fair reflection of m Cubed`s financial
position after the implementation of the Acquisitions or of m Cubed`s
future earnings.
Unaudited Pro forma Pro forma Pro forma
interim adjustments results after adjustments
financial for the the removal for the
results of m removal of of Convergenet
Cubed for 6 the "Convergenet "effective 6
months ended "Convergenet effective 6 months" ended
31 August effective 6 months" ended 31 August
2011 months" ended 31 August 2011
31 August 2011
2011
Attributable (0.53) 0.23 (0.3) (0.23)
and headline
(loss)
earnings per
share(cents)
Diluted and (0.53) 0.23 (0.3) (0.23)
headline
(loss)
earnings per
share (cents)
Net asset 8.45 0.23 8.68 (0.23)
value per
share (cents)
Net tangible 8.45 0.23 8.68 (0.23)
asset value
per share
(cents)
Shares in 738,537,000 738,537,000 738,537,000 738,537,000
issue
Weighted 738,537,000 738,537,000 738,537,000 738,537,000
average
number of
shares in
issue
Pro forma Pro forma Pro forma Total after Total
adjustments adjustments adjustments the Change %
for the for the for the inclusion
"Bauba unaudited transaction of the
effective 6 interim costs of Acquisition
months" financial the s
ended 30 results of relisting
June 2011 Goliath for
6 months
ended 30
September
2011
Attributabl (0.01) (0.02) (0.22) (0.78) (47.2)
e and
headline
(loss)
earnings
per share
(cents)
Diluted and (0.01) (0.02) (0.22) (0.78) (47.2)
headline
(loss)
earnings
per share
(cents)
Net asset (0.0) (0.0) (0.22) 8.23 (2.7)
value per
share
(cents)
Net (0.0) (0.0) (0.22) 8.23 (2.7)
tangible
asset value
per share
(cents)
Shares in 738,537,000 738,537,000 738,537,000 738,537,000 738,537,000
issue
Weighted 738,537,000 738,537,000 738,537,000 738,537,000 738,537,000
average
number of
shares in
issue
Notes and assumptions:
1. The unaudited interim financial results of m Cubed for 6 months
ended 31 August 2011 have been extracted from the interim
financial results of m Cubed for 6 months ended 31 August 2011.
2. The "Convergenet effective 6 months" have been calculated by
subtracting the interim financial results of Convergenet for 6
months ended 28 February 2011 from the financial results of
Convergenet for year ended 31 August 2011.
3. The "Bauba effective 6 months" have been calculated by
subtracting the interim financial results of Bauba for 6 months
ended 31 December 2010 from the financial results of Bauba for
year ended 30 June 2011.
4. The unaudited interim financial results of Goliath for 6 months
ended 30 September 2011 have been extracted from the interim
financial results of Goliath for 6 months ended 30 September
2011.
5. The attributable and headline (loss) earnings per share and
diluted and headline (loss) earnings per share figures have been
calculated on the basis that the Acquisitions were effected on 1
March 2011.
6. The net asset value per share and net tangible asset value per
share figures have been calculated on the basis that the
Acquisitions were affected on 31 August 2011.
7. A taxation rate of 28% is assumed.
8. Transaction costs of R1.6 million (excluding VAT) are assumed.
9. The Convergenet transaction includes a R1.707m revaluation
adjustment that was done at the end of February 2011.
5. LIFTING OF THE SUSPENSION OF M CUBED ON THE JSE
Following the ratification of the Convergenet Acquisition and approval
of Proposed Acquisitions in general meeting, application will be made
to the JSE to lift the suspension of m Cubed. The JSE has granted the
Company an extension to the termination of the listing, provided that
the shareholders meeting to ratify the Convergenet Acquisition and
approve the Proposed Acquisitions takes place before 31 March 2012.
6. IRREVOCABLE SUPPORT FROM SHAREHOLDERS
m Cubed has received irrevocable support from shareholders holding 52%
of the Company`s issued share capital to vote in favour of the
resolutions for the ratification of the Convergenet Acquisition and
the approval of the Proposed Acquisitions.
7. CLASSIFICATION OF THE ACQUISITIONS AND CIRCULAR TO SHAREHOLDERS
CONVENENING A GENERAL MEETING
As set out in paragraphs 1.2 and 1.4 above the Convergenet Acquisition
and the Proposed Acquisitions are classified as Category 1
transactions in terms of of the Listings Requirements of the JSE and a
circular providing more information and convening a general meeting
will be sent the shareholders in due course.
21 December 2011
Cape Town
Sponsor
PSG Capital (Pty) Limited
Date: 21/12/2011 16:08:01 Produced by the JSE SENS Department.
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