| Tue 31 Jul 2001, 0:00 | | Metropolis/primedia/datatec - Scheme Of Arrangemen |
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METROPOLIS TRANSACTIVE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/020783/06)
("Metropolis")
PRIMEDIA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/003355/06)
("Primedia")
DATATEC LIMITED alt.shift your world
(Incorporated in the Republic of South Africa)
(Registration number 1994/005004/06)
("Datatec")
PROPOSED SCHEME OF ARRANGEMENT TO ACQUIRE THE ORDINARY SHARES IN METROPOLIS
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the cautionary announcements that appeared in the press and on
the Stock Exchange News Service ("sens") on 19 February 2001, 11 April 2001
and 5 June 2001, Investec Bank Limited is authorised to announce, inter
alia, that Primedia and Datatec intend to propose a scheme of arrangement,
in terms of section 311 of the Companies Act, 1973 (Act 61 of 1973), as
amended, between Metropolis and its ordinary shareholders (other than
Primedia and Datatec), to acquire those ordinary shares in Metropolis not
owned by Primedia and Datatec in the same ratio in which Primedia and
Datatec hold their Metropolis shares ("the scheme"). Successful
implementation of the scheme will result in Primedia and Datatec becoming
the sole shareholders of Metropolis and the termination of the listing of
Metropolis on the JSE Securities Exchange South Africa ("JSE").
At present, Primedia and Datatec are the major shareholders of Metropolis,
holding 48,77% and 19,70% of Metropolis's shares, respectively.
2. Rationale for the scheme
Given the limited interest in small capitalisation companies on the JSE, the
lack of liquidity in the shares of Metropolis and the costs associated with
maintaining a listing, there appears to be little justification for the
continued listing of Metropolis. The directors of Primedia, Datatec and
Metropolis are of the opinion that Metropolis should be delisted and that
the minority shareholders should be given an opportunity to dispose of their
shares at an appropriate price.
3. Consideration for the scheme
Subject to the fulfilment of the conditions precedent referred to below, the
participants in the scheme will receive 40 cents per Metropolis share.
Participants will be entitled to elect to receive such consideration either:
* entirely in cash; or
* in respect of each Metropolis share, 11,51 cents in cash and 28,49 cents
by the issue of Primedia ordinary units to be issued at a price to be
announced in due course, based on the market price of the Primedia ordinary
units at that date.
4. Financial effects
The table below sets out the financial effects of the scheme on a Metropolis
shareholder, based on the published unaudited interim results of Metropolis
for the six months ended 31 December 2000:
Before After Change
(cents) (cents) (%)
Market value per Metropolis share
at the close of business on the JSE
on 19 February 2001, being the day
prior to the publication on SENS of
the first cautionary announcement 18 40 122
Weighted average value per Metropolis
share for the 60 trading days up to
and including 19 February 2001 24 40 67
Tangible net asset value
per Metropolis share* 3 40 1 233
Attributable earnings
per Metropolis share# 8,1 1,42 (82)
Headline (loss)/earnings
per Metropolis share (11,5) 1,42 -
Notes:
* Based on the net asset value per share published in the interim accounts
of Metropolis at 31 December 2000.
# Based on the earnings per share published in the interim accounts of
Metropolis for the six-month period ended 31 December 2000, which is
compared to the after-tax interest which a shareholder would have earned,
had an amount equivalent to the scheme consideration been invested for a six-
month period from 1 July 2000 to 31 December 2000 at an after-tax interest
rate of 7,0% per annum, compounded monthly.
5. Opinion
KPMG Corporate Finance has been appointed as advisers to the Metropolis
board of directors and the minority shareholders of Metropolis, to consider
the terms and conditions of the scheme, whose opinion will be published in
due course with the salient dates and times relating to the scheme.
6. Conditions precedent
Implementation of the scheme is conditional, inter alia, upon:
- the High Court of South Africa authorising the convening of a scheme
meeting;
- the required majority of votes being cast in favour of the scheme at a
scheme meeting to be convened for such purposes;
- the High Court of South Africa sanctioning the scheme;
- registration of the Order of Court by the Registrar of Companies; and
- receipt of the necessary regulatory consents.
Due to the fact that there will be no change in control of Metropolis, no
submission to the Competition Commission is required.
7. Cash confirmation
The Securities Regulation Panel ("SRP") has been satisfied that Primedia and
Datatec have the necessary cash resources available to implement the
transaction.
8. Delisting of Metropolis
If the scheme is successfully implemented, application will be made to the
JSE for the termination of the listing of the Metropolis ordinary shares.
9. Withdrawal of cautionary announcement
Metropolis shareholders are advised that, following this announcement,
caution is no longer required in their dealings in Metropolis shares.
10. Further announcements and documentation
A further announcement giving the salient dates and times of the scheme will
be published and the scheme documentation, which is subject to the approvals
of the SRP and the JSE, is in the course of preparation and will be
despatched to Metropolis shareholders in due course.
Sandton
31 July 2001
Adviser to the transaction
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Corporate law advisers and consultants
Edward Nathan & Friedland (Pty) Ltd
(Registration number 1999/026464/07)
Attorneys to Metropolis
Knowles Husain Inc Attorneys
(Registration number 2000/000004/21)
Independent advisers to Metropolis and the minorities
KPMG Corporate Finance
Reporting accountants
Deloitte & Touche
Sponsor to Metropolis
HSBC
Sponsor to Primedia
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor and merchant bank to Datatec
Rand Merchant Bank
Corporate Finance
A Division of FirstRand Bank Limited
