| Mon 16 Aug 2004, 15:55 | | Firm intention to make an offer and cautionary |
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BTG/CSH - Firm intention to make an offer and respective cautionary
announcements
BYTES TECHNOLOGY GROUP LIMITED CS COMPUTER SERVICES HOLDINGS LIMITED
(Incorporated in the Republic of (Incorporated in the Republic of
South Africa) South Africa)
(Registration number 1911/003874/06) (Registration number 1996/015131/06)
Share code: BTG ISIN: ZAE000029526 Share code: CSH ISIN: ZAE000022034
(`BTG`) (`CSH`)
FIRM INTENTION TO MAKE AN OFFER AND RESPECTIVE CAUTIONARY ANNOUNCEMENTS
1. Introduction
Further to the separate cautionary announcements previously released by BTG and
CSH, shareholders of both companies are now advised that BTG has, on Friday 13
August 2004, submitted written notice to the Board of Directors of CSH of BTG`s
firm intention to make a conditional offer to the shareholders of CSH for the
entire issued share capital of CSH (`the Offer`). The Offer is subject to the
pre-condition and conditions precedent as set out below and is subject to the
provisions of the Securities Regulation Code on Takeovers and Mergers (`the
Code`).
2. BTG`s rationale for the Offer
Pursuant to BTG`s strategy of seeking opportunities to complement its existing
Information Technology (`IT`) services and offerings, the acquisition of CSH by
BTG would facilitate entry into new areas. In particular, such an acquisition
would enable BTG to enter the IT training as well as the IT outsourcing arenas
on a meaningful basis. Given the current market instability of CSH, BTG will
also provide added substance to the other operations of CSH and BTG believes
that the acquisition will be in the best interest of those parties`
stakeholders.
3. Terms and conditions of the Offer
The Offer
BTG will make the Offer and will nominate its subsidiary Bytes Technology Group
South Africa (Pty) Limited to acquire the CSH shares in terms of the Offer. The
Offer will be made in terms of the Code and Section 440K of the Companies Act 61
of 1973 as amended (`the Act`) or such other mechanism that BTG may select.
The Offer consideration
The consideration will be one BTG share for every 37 CSH shares held (`the
consideration shares`). On the basis of the closing prices of BTG and CSH on the
JSE Securities Exchange South Africa (`JSE`) on Thursday, 12 August 2004, the
implied value of the Offer is 15.68 cents per CSH share. It is proposed that
there will be a mechanism whereby CSH shareholders can sell their consideration
shares to BTG`s holding company, Allied Electronics Corporation Limited for a
cash consideration per BTG share of R5.55 which equates to an effective value of
15 cents per CSH share (`the disposal proceeds`). CSH shareholders are further
advised that share trading costs, all duties and any tax liabilities will be for
the account of the CSH shareholder. The consideration share ratio and the
disposal proceeds are based on the issued share capital of CSH as at Friday, 13
August 2004.
BTG has confirmed that there will be no increase in the consideration paid to
CSH shareholders, either in terms of the consideration share ratio or the
disposal proceeds and no interest will accrue thereon. This confirmation
constitutes a no increase statement in terms of the Code.
Pre-condition
The making of the Offer will be conditional on the fulfilment of the following
pre-condition which BTG reserves the right to waive and / or extend (in whole or
part):
- the receipt by BTG within 14 days of this announcement, of irrevocable and
unconditional undertakings by CSH shareholders to accept the Offer in respect of
a majority of CSH issued shares.
Conditions precedent
The Offer, when made, will be conditional on the fulfilment of the following
conditions precedent which shall be fulfilled by 4 October 2004, with BTG
reserving the right to waive and / or extend (in whole or part) the conditions
precedent:
- acceptance of the Offer by CSH shareholders holding in aggregate not less
than nine tenths of the issued share capital of CSH so as to permit BTG to
invoke the provisions of Section 440K of the Act;
- regulatory approval including but not limited to the competition authorities,
the Securities Regulation Panel (`SRP`) and the JSE;
- no activities being undertaken by the CSH group outside of the ordinary
normal and regular course of business; and
- the board of CSH resolving to irrevocably and unconditionally recommend the
acceptance of the Offer.
CSH shareholders are advised that BTG reserves the right, in its sole discretion
and subject to the requirements of the Code, to make the Offer either prior to
or only after receipt of the necessary approval by the competition authorities
and in the latter event, the consent of the SRP would be sought for an extension
of time in terms of the Code.
Arrangements and undertakings
CSH management and executive directorate have undertaken to support the Offer.
BTG intends to approach shareholders of CSH with the intention of securing
sufficient undertakings so as to fulfil the pre-condition and the condition
precedent relating to acceptances.
4. Response of the Board of Directors of CSH
The Board of Directors of CSH has appointed Bridge Capital as the independent
advisor to advise the Board of Directors of CSH on the Offer and how the Offer
affects CSH shareholders. The Board of Directors of CSH will meet shortly to
consider how it should respond to the offer and whether it is necessary to
appoint an independent committee. Further announcements in this regard will be
made shortly.
5. General
In the event that the pre-condition and conditions precedent are fulfilled, BTG
intends to invoke the provisions of Section 440K of the Act and thereafter to
apply to the JSE to de-list CSH.
BTG confirms that as at the date of this announcement, it does not own, hold,
control or hold any options in respect of any of the issued share capital of in
CSH.
BTG and CSH have commenced preparations for a joint submission to the
competition authorities and it is anticipated that the submission will be made
as soon as possible.
Shareholders of both BTG and CSH are advised that where possible, the respective
Boards of Directors will make every effort to expedite the process. Further
announcements in respect of the Offer and the process will be released on SENS
as events occur.
6. Further cautionary announcement and withdrawal of cautionary announcement
As a result of the Offer, shareholders in CSH are advised to continue to
exercise caution when dealing in their shares until a further announcement is
made.
With the disclosure of the details and the value of the Offer, BTG shareholders
are advised that they are no longer required to exercise caution when dealing in
their shares and the cautionary announcement is duly withdrawn.
Johannesburg
16 August 2004
Financial advisor and Legal advisor to BTG Joint sponsor to BTG
joint sponsor to BTG Werksmans Nedbank Capital
Cazenove
Independent advisor Legal advisor to CSH Sponsor to CSH
Bridge Capital Brink Cohen Le Roux BJM
Date: 16/08/2004 03:25:05 PM Produced by the JSE SENS Department
