| Mon 19 Mar 2012, 17:00 | | TMT - Trematon Capital Investments Limited - Joint announcement relating to |
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TMT
TMT
TMT - Trematon Capital Investments Limited - Joint announcement relating to
notice of firm intention by Tremgrowth (Pty) Limited to make a general offer to
shareholders of Club Mykonos Langebaan Limited
TREMATON CAPITAL INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/008691/06)
Share code: TMT
ISIN: ZAE000013991
("Trematon")
CLUB MYKONOS LANGEBAAN LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1954/002223/06)
("CML")
TREMGROWTH (PROPRIETARY) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/020527/07)
("Tremgrowth")
JOINT ANNOUNCEMENT RELATING TO NOTICE OF FIRM INTENTION BY TREMGROWTH (PTY)
LIMITED TO MAKE A GENERAL OFFER TO SHAREHOLDERS OF CLUB MYKONOS LANGEBAAN
LIMITED BY WAY OF A SCHEME OF ARRANGEMENT IN TERMS OF SECTION 114 OF THE
COMPANIES ACT 71 OF 2008, AS AMENDED
1. INTRODUCTION
1.1 Shareholders of Club Mykonos Langebaan Limited ("CML") (Registration No:
1954/002223/06) are advised that Tremgrowth (Pty) Limited ("Tremgrowth")
(Registration No: 2005/020527/07), a wholly-owned subsidiary of Trematon Capital
Investments Ltd ("Trematon"), whose shares are listed on the JSE, has submitted
to the board of directors of CML ("the Board") on 2 March 2012 a notice of its
firm intention to make an offer ("Offer") in terms of which, if accepted,
Tremgrowth will acquire all of the issued ordinary shares in CML ("CML Shares")
other than those already held by Tremgrowth (representing 92.2% of the entire
issued share capital of CML). Accordingly, shares subject to the Scheme will
comprise 7.8% of the entire issued share capital of CML.
1.2 The Offer to be proposed by Tremgrowth will be implemented by way of a
scheme of arrangement ("the Scheme") in terms of section 114 of the Companies
Act 71 of 2008, as amended ("the Companies Act) between CML and all of its
shareholders other than Tremgrowth ("Scheme Participants").
1.3 The Offer is an "affected transaction" as contemplated under section 117 of
the Companies Act. As such, the Offer will be regulated by the Act, Companies
Regulations, 2011 ("the Regulations") and the Takeover Regulation Panel ("TRP").
1.4 The independent board of CML (which board was appointed on 6 March 2012)
("CML Board") is considering the Offer and will furnish its views in the
combined circular to be sent to the Scheme Participants.
2. SALIENT FEATURES OF TREMGROWTH RATIONALE FOR THE OFFER
2.1 CML is a public company with a small number of minority shareholders. The
Scheme will facilitate a resultant saving by CML of material administrative and
other costs in maintaining and servicing such a shareholder base.
2.2 The major assets of CML are undeveloped land in the Club Mykonos Resort and
a minority stake (29.6%) in the Mykonos Casino. The primary income producing
asset within CML is the said 29.6% stake in the Mykonos Casino. At present this
is a stable, cash flow positive business although there has been no profit
growth since 2008. Substantial additional long-term capital will be needed to
develop and realise beneficially the value inherent in the land assets. This
would require materially increased borrowings from financiers or a combination
of financing and a rights issue to shareholders. Any such development would be
of a long-term nature as the property market in the area is currently subdued
and entails risk. In addition, the general outlook in the property environment
appears uncertain and the availability of debt finance is likely to remain
restricted for the foreseeable future. It is unlikely that any dividends would
be paid during the currency of any such development. Accordingly, it is
anticipated that many Scheme Participants may not support a rights offer or wish
to take on the risk of increased borrowings and that such Scheme Participants
may prefer to realise their share investment in CML and invest such funds in
more liquid and less risky assets. The Scheme will provide a fair mechanism to
achieve this and at the same time for Scheme Participants who wish to retain an
equity investment to obtain shares in Trematon.
2.3 The small number of minority shareholders and the unlisted nature of CML
means that the over-the-counter market in the CML Shares is inefficient,
restricted and has very poor liquidity. The marketability and the market value
of the CML Shares have decreased given the contraction in the property market
over the last few years.
2.4 The Scheme will provide those Scheme Participants who wish to sell their CML
Shares with an opportunity to liquidate their investment at a fair price and
Scheme Participants who elect to remain invested will receive shares in Trematon
(who pursuant to the Scheme will own, via its wholly owned subsidiary,
Tremgrowth, the entire issued share capital of CML) which is listed on the JSE
with a public market price and the ability to trade their shares at any time.
3. THE OFFER
3.1 Tremgrowth will offer to acquire all of the shares in CML ("CML Shares")
other than those already held by Tremgrowth (representing 92.2% of the entire
issued share capital of CML).
3.2 The Scheme Participants will be able to elect to:
3.2.1 receive a cash consideration of R3.00 (three Rand) per CML Share ("Cash
Consideration"); or
3.2.2 receive 2 (two) ordinary shares in the issued share capital of Trematon
("Trematon Shares"), which shares are listed on the JSE, for each CML Share held
by such Scheme Participant ("Scheme Share Alternative").
If a Scheme Participant fails to make a valid election he will be deemed to have
elected the Cash Consideration in respect of all his CML Shares.
3.3 The Offer will be open for acceptance from 10:00 on Wednesday, 29 March
2012, with the closing date being at 10:00 on Friday, 18 May 2012 ("Closing
Date"). The Offer will be open for acceptance by the Scheme Participants that
are recorded in CML`s securities register at the close of business on the
Closing Date. Any change to the initial Closing Date will be announced on SENS
and published in the press.
3.4 ABSA Bank Limited has provided the TRP with an irrevocable unconditional
guarantee, as contemplated in Regulation 111(4)(a), in favour of the Scheme
Participants for the sole purpose of fully satisfying and discharging the Cash
Consideration.
3.5 Tremgrowth and Trematon confirm that they have sufficient Trematon Shares
available and under their control in order to settle the Scheme Share
Alternative in terms of the Offer.
3.6 No amendment or variation of the Offer shall be valid unless it is agreed to
by Tremgrowth in writing and approved by the TRP. No such amendment or variation
shall be detrimental to Scheme Participants (including in respect of any
reduction in the Cash Consideration or the Scheme Share Alternative).
4. CONDITIONS PRECEDENT
4.1 The Offer is and the Scheme will be subject to fulfillment or waiver (in
whole or in part) of the following conditions precedent:
4.1.1 the receipt of unconditional approvals, consents or waivers from all
regulatory bodies, necessary to implement the Scheme, including the TRP. To the
extent that any such approvals, consents or waivers are subject to conditions,
such conditions shall be satisfactory to Tremgrowth;
4.1.2 the approval of the Scheme by the requisite majority of Scheme
Participants, voting either in person or by proxy at the meeting of the Scheme
Participants convened for the purposes of considering and, if deemed fit,
approving the Scheme, as contemplated in section 115(2)(a) of the Companies Act:
4.1.2.1 to the extent required, the approval of the implementation of such
resolution by a Court in terms of section 115(2) and/or section 115(3) of the
Companies Act; and
4.1.2.2 if applicable, CML not treating the aforesaid resolution as a nullity,
as contemplated in section 115(5)(b) of the Companies Act;
4.1.3 in relation to any objections to the Scheme by Scheme Participants:
4.1.3.1 no Scheme Participant gives notice objecting to the Scheme, as
contemplated in section 164(3) of the Companies Act, and votes against the
resolutions proposed at the meeting of the Scheme Participants, to be convened
for the purposes of considering and, if deemed fit, approve the Scheme ("Scheme
Meeting"); or
4.1.3.2 if Scheme Participants give notice objecting to the Scheme, as
contemplated in section 164(3) of the Companies Act, and vote against the
resolutions proposed at the Scheme Meeting, Scheme Participants holding no more
than 15% (fifteen percent) of all CML Shares eligible to be voted at the Scheme
Meeting give such notice and vote against the resolutions proposed at the Scheme
Meeting; or
4.1.3.3 if Scheme Participants holding more than 15% (fifteen percent) of all
CML Shares eligible to vote at the Scheme Meeting give notice objecting to the
Scheme, as contemplated in section 164(3) of the Companies Act, and vote against
the resolutions proposed at the Scheme Meeting, the relevant Scheme Participants
do not exercise their Appraisal Rights, by giving valid demands in terms of
sections 164(5) to 164(8) of the Companies Act within 30 (thirty) Business Days
following the Scheme Meeting, in respect of more than 15% (fifteen percent) of
the CML Shares eligible to be voted at the Scheme Meeting;
4.1.4 Tremgrowth, following the completion of the Scheme, being the holder (when
combined with the number of CML Shares held by Tremgrowth), of the entire
ordinary issued share capital of CML.
4.2 The conditions precedent in:
4.2.1 paragraphs 4.1.1 and 4.1.2 are not capable of being waived; and
4.2.2 paragraphs 4.1.3 and 4.1.4 are for the benefit of Tremgrowth, who will be
entitled, in its sole discretion, to waive fulfillment of such conditions
precedent, in whole or in part.
5. COMBINED CIRCULAR
CML, Tremgrowth and Trematon will send out a combined circular containing full
details of the Offer to the Scheme Participants within 20 (twenty) business days
of the date of this announcement. This combined circular will contain the CML
Board`s views and opinion on the Offer together with a fair and reasonable
opinion from an independent expert relating to the Offer and will enable the
Scheme Participants to make an informed decision in relation to the Offer.
6. PRO FORMA EARNINGS AND ASSET VALUE
The pro forma earnings and asset value per Trematon Share (Trematon being the
issuer of the shares in terms of the Scheme) is as follows:
PRO FORMA FINANCIAL INFORMATION OF TREMATON
Statement of Financial Position
Pro Forma Adjustments
Acquisition and
Actual at financing of Cost of the Pro forma
Note 31 August 2011 Shares Scheme balance
Pro forma net asset
value per share 108 cents 2 cents - 110 cents
Pro forma earnings
per share 1 8 cents - - 8 cents
Assumption:
1 Earnings per share is calculated usung a Weighted Average Number of Ordinary
Shares of 179 439 467, which assumes that the transaction occurred at the
beginning of the financial year.
Please note that the entire issued share capital of Tremgrowth comprises 10
issued ordinary shares.
7. INTERESTS IN CML
7.1 Tremgrowth holds 32,450,847 CML Shares in the issued share capital of CML,
being a 92.2% direct beneficial interest in CML. Trematon holds no direct
beneficial interest in CML. There are no persons acting in concert with Trematon
and Tremgrowth in relation to the Scheme.
7.2 The directors of Tremgrowth held the following direct and indirect interests
in CML:
Percentage
Direct Indirect Total interest in CML
AJ Shapiro 1 0 1 0%
AL Winkler 1 0 1 0%
A Groll 1 0 1 0%
Total 3 0 3 0%
7.3 The directors of Trematon hold the following direct and indirect interests
in CML:
Percentage
Direct Indirect Total interest in CML
AJ Shapiro 1 0 1 0%
AL Winkler 1 0 1 0%
A Groll 1 0 1 0%
M Kaplan 1 0 1 0%
AM Louw 5 555 0 5 555 0.02%
Total 5 559 0 5 559 0.02%
7.4 The Directors of CML hold the following direct and indirect interests in
CML:
Direct Indirect Total
AJ Shapiro 1 0 1
AL Winkler 1 0 1
A Groll 1 0 1
AM Louw 5 555 0 5 555
M Kaplan 1 0 1
G Stigling 100 0 100
S Lamont 1 0 1
HT Jedeiken 1 0 1
AR Troskie 1 0 1
5 662 0 5 662
8. OPINIONS AND RECOMMENDATIONS
8.1 The Board has appointed a committee consisting of all the independent non-
executive directors of CML to consider the Scheme and to make recommendations
thereon to Scheme Participants ("the Committee").
8.2 PKF (Cpt) Inc ("PKF") has been appointed to act as an independent
professional advisor for the purposes of providing appropriate external advice
to Scheme Participants on the terms of the Scheme.
8.3 The opinions of PKF and the committee will be included in the combined
circular to be sent to Scheme Participants as set out in paragraph 5 above.
9. DIRECTORS` RESPONSIBILITY STATEMENT
The directors of Tremgrowth, Trematon and CML collectively and individually
accept full responsibility for the accuracy of the information given in this
joint firm intention Offer announcement, certify that, to the best of their
knowledge and belief, the information in this joint firm intention Offer
announcement is true and correct and certify that, the joint firm intention
Offer announcement does not omit anything likely to affect the importance of the
information disclosed.
10. CAUTIONARY
The shareholders of CML and Trematon are advised to exercise caution when
dealing in their respective shares until the said combined circular is
distributed and an announcement is made in respect of the outcome of the Scheme.
For and on behalf of the Board of CML
Cape Town
19 March 2012
Attorneys to the Scheme
BERNADT - VUKIC - POTASH & GETZ ATTORNEYS
Independent adviser to CML
PKF
Chartered accountants & business advisors
Date: 19/03/2012 17:00:01 Produced by the JSE SENS Department.
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