| Wed 3 Aug 2005, 12:21 | | Synergy - Change Of Control, Offer To Shareholders |
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Synergy - Change Of Control, Offer To Shareholders and Disposals
SYNERGY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/006315/06)
Share code: SNG ISIN: ZAE000017760
`Synergy` or `the company`)
CHANGE OF CONTROL, OFFER TO SHAREHOLDERS AND DISPOSALS
1. Introduction
Further to the cautionary announcement dated 20 May 2005, River Corporate
Finance (Proprietary) Limited is authorised to announce that the i capital
Growth Fund I Trust, acting on behalf of a consortium (`the consortium`), has
signed an agreement to acquire 43 305 200 shares or 83% of the ordinary shares
of Synergy from P J Toolan, N J Plane and A Regenass (`the vendors`) for 8 cents
per share, subject to certain conditions which are set out below.
Simultaneously, the company has also agreed to sell its main operating
subsidiary, Prime Support (Proprietary) Limited (`Prime Support`), to two of the
company`s directors, N J Plane and A Regenass, and to sell the company`s
properties to third parties, subject to the conditions precedent set out in
paragraph 9 below with effect from 1 August 2005.
2. Change of control of Synergy and offer to shareholders
In terms of the Securities Regulation Code on Take-Overs and Mergers, the offer
by the consortium (`the offer`) is an effected transaction, as more than 35% of
Synergy has been acquired by the consortium and, accordingly, an offer to
shareholders is required to be made by the consortium at 8 cents per share,
subject to the same conditions referred to above, being the highest price paid
by the consortium for their Synergy shares (`the change of control`).
Accordingly, after the fulfilment of the conditions, the consortium will extend
a mandatory offer to Synergy shareholders to acquire their shares.
3. Adjustment to the purchase price
The purchase price per share shall be subject to a downward adjustment in the
event that the tangible net asset value of the company on the date upon which
the final condition is fulfilled falls below 8 cents per share.
4. Sale of Prime Support
N J Plane and A Regenass, two of Synergy`s directors and vendors, have agreed
to purchase Synergy`s only operating subsidiary, Prime Support (Proprietary)
Limited, as a going concern, for R1 300 000 with effect from 1 August 2005. The
sale of Prime Support is a related party transaction as defined by the JSE
Limited (`JSE`) Listings Requirements and, accordingly, will be subject to a
fair and reasonable opinion from an independent professional expert acceptable
to the JSE. The sale will also be subject to the shareholders` approval in
general meeting. The consortium has given an irrevocable undertaking to vote in
favour of the resolution to dispose of Prime Support.
Prime Support is an accredited agent for AccPac, a leading brand of accounting
software for the small to medium sized business market. The company provides
sales, installation, support and training for AccPac users throughout South
Africa.
5. Sale of Synergy`s properties
Synergy historically operated out of two properties located in Linden,
Johannesburg. The company has entered into two separate agreements with
independent parties to sell these properties for a combined total net
consideration of R1 658 000, subject to shareholder approval being obtained in
general meeting.
The sale of Prime Support and the disposal of the properties are, collectively,
referred to as `the disposals`.
6. Intention of the consortium
Once the disposals have been approved by shareholders, Synergy will have no
other assets other than approximately R4,2 million in cash and will be
classified as a `cash company` by the JSE.
It is the intention of the consortium to acquire suitable assets in the
information technology sector that meet the requirements for listing on the JSE
and which will be subject to a pre-listing statement being published.
7. Reconstitution of the board of directors
Consequent to the change of control, Synergy`s existing board of directors will
resign, and the consortium will appoint a new board of directors for Synergy.
8. Financial effects of the disposal of Prime Support and the properties
Before the After the Increase/
disposals disposals Decrease
(cents) (cents) (%)
Earnings per share 0.34 0.61 79
Headline earnings per share 0.37 0.61 65
Net tangible asset value per share 9.04 8.68 (4)
Net asset value per share 9.04 8.68 (4)
9. Conditions precedent
The change in control and the disposals are subject to the following conditions
precedent:
* the successful conclusion of binding agreements on terms satisfactory to the
consortium, regulating the disposals;
* passing of the necessary resolution for submission to the Registrar of
Companies;
* obtaining the necessary approvals of the Securities Regulation Panel and the
JSE and any other regulatory bodies;
* the consortium notifying the vendors that they are satisfied with the results
of a due diligence exercise; and
* the approval of shareholders in general meeting.
10. Withdrawal of cautionary announcement
With the publishing of this announcement, shareholders need no longer exercise
caution when dealing in the securities of the company.
11. Circular to shareholders
A circular to shareholders containing details of the change of control, the
offer to shareholders and the disposals is currently being prepared, and subject
to JSE and Securities Regulation Panel approvals, will be circulated to
shareholders within 28 days of this announcement.
Johannesburg
2 August 2005
Corporate advisor and sponsor to Synergy
RIVER GROUP
Corporate advisor to the consortium
iCAPITAL
Fund Managers
Date: 03/08/2005 12:12:08 PM
Produced by the JSE SENS Department
