| Tue 4 Apr 2006, 7:00 | | Vesta - Disposal of all assets; Change in control; |
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VST
VST
Vesta - Disposal of all assets; Change in control; Intention
to acquire new assets; and withdrawal of cautionary
Vesta Technologies Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1998/015580/06
Share code: VST & ISIN number: ZAE000016267
("Vesta" or "the company")
DISPOSAL OF ALL ASSETS; CHANGE IN CONTROL; INTENTION TO
ACQUIRE NEW ASSETS; AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. DETAILS OF TRANSACTIONS
Shareholders are advised that Vesta entered into an
agreement on 10 March 2006, subject to certain conditions
precedent, to dispose of all of its assets and
liabilities ("the Vesta business") for R2,000,000 (the
equivalent of 2,3641 cents per share) to Frederick
Johannes Morrison or his nominee ("Morrison"), subject to
Section 228 of the Companies Act, Act 61 of 1973, as
amended ("the Act") ("the disposal").
On behalf of the Morrison Family Trust ("MFT") and
himself, Morrison simultaneously entered into an
agreement, subject to certain conditions precedent, to
dispose of 59,114,697 ordinary shares in Vesta held by
them, constituting 69,88% of the entire issued share
capital of the company, to Bevdev CC ("Bevdev") for a
consideration of R1,700,000 (being the equivalent of
2,8758 cents per share) ("acquisition of shares").
Upon approval of the disposal and the acquisition of
shares, Bevdev will hold 69,88% of the issued share
capital of the company. In terms of the South African
Securities Regulation Code on Take-overs and Mergers
("the Code"), this will constitute a change of control of
the company and an "affected transaction" in terms of the
Code.
These transactions are also subject to the requisite
guarantees being provided by the parties to the
satisfaction of the Securities Regulation Panel.
As the disposal constitutes an affected transaction in
terms of the Code and a Category 1 and related party
transaction in terms of the JSE Limited"s ("JSE")
Listings Requirements, Vesta shareholders, other than
Morrison and his associates, must approve the disposal at
a general meeting of the company convened for the purpose
of approving the disposal ("the general meeting").
In addition the entire transaction is conditional on the
minority shareholders waiving their rights to receive a
mandatory offer from Bevdev in terms of the Code and
Securities Regulation Panel ("SRP") approving such a
waiver. Bevdev has received written undertakings from
minority shareholders representing 54,93% of the minority
shareholding to vote in favour of the disposal of the
Vesta business and the waiver of the mandatory offer.
As Bevdev intends to maintain the listing of the company
on the JSE, it will be proposed that Vesta will,
subsequent to the disposal and acquisition of shares,
change its name, restructure its capital and commence
acquiring new assets that will comply with the listing
requirements of the JSE.
2. RATIONALE
Vesta has been listed for many years as a provider of
total information technology services in the areas of
software development, service and support. Vesta has
performed poorly over the past five financial years with
an aggregate of headline losses of 2,4 cents per share.
Turnover has furthermore declined by 43% over the 2004 to
2005 financial years. At its most recent year-end, 31
August 2005, net asset value was R1,6 million or 1,89
cents per share.
Having regard to these circumstances and considerations,
the board of directors of Vesta is of the opinion that it
is no longer appropriate for Vesta to conduct its
business in a listed entity.
Accordingly, the conditional offer by Bevdev has enabled
the major shareholder to acquire the Vesta business at a
price that is considered to be at a fair value to
shareholders.
3. PARTICULARS OF THE DISPOSAL
3.1 Terms of the disposal
Vesta shall, subject to the fulfilment of the
conditions precedent set out below, dispose of all
its assets and liabilities to Morrison for a net
aggregate amount of R2,000,000. The disposal
consideration will be paid in cash to Vesta.
3.2 Effective date
The effective date of the disposal will be 1
September 2005.
3.3 Suspensive Conditions
The disposal is subject to and conditional upon the
following conditions precedent:
3.3.1 approval of the disposal by the JSE, the SRP and
other regulatory authorities that may be required;
3.3.2 approval of the disposal by Vesta shareholders,
other than Morrison and his associates, at the general meeting
as required by section 228 of the Act and the JSE Listings
Requirements; and
3.3.3 approval by Vesta minority shareholders to waive a
mandatory offer in terms of the Code, at a general meeting and
the SRP approving such a waiver.
3.4 Warranties
The disposal agreement contains no warranties other
than that the assets concerned are owned and can be
sold by Vesta, and that all the liabilities of Vesta
will be assumed by the new owner.
3.5 Related party
Morrison is a related party to Vesta. Consequently
the disposal constitutes a related party transaction
in terms of the JSE Listings Requirements and
requires written confirmation from an independent
professional expert acceptable to the JSE as to
whether the terms and conditions thereof are fair
and reasonable to the Vesta minority shareholders.
The disposal further constitutes an affected
transaction in terms of the Code and requires an
independent opinion thereon by an appropriate
external advisor in terms of Rule 3.1 of the Code.
3.6 Financial effects of the disposal
The following table and accompanying notes are the
responsibility of the directors of the company and
set out the unaudited pro forma financial effects of
the disposal on a Vesta shareholder. It has been
prepared for illustrative purposes only and because
of its nature, may not fairly present the issuer"s
financial position, changes in equity, results of
operations or cash flows or give a fair reflection
of the effect of the disposal on a Vesta
shareholder.
Before After Change
%
Earnings per share (cents) 0,54 (1) 0(3) 100
Headline earnings per share 0,67 (1) 0(3) 100
(cents)
Net asset value per share (cents) 1,89 (1) 2,36 (4) 24.8
Net tangible asset value per share 1,89 (1) 2,36 (4) 24.8
(cents)
Weighted average share price 5,4 (2) 2,36 (4) (56,3)
(cents)
Number of shares in issue (`000) 84,600 84,600
Notes:
1. Based on the published audited results of Vesta for
the year ended 31 August 2005.
2. Weighted average trading price of one Vesta share
for the period from 1 November 2005 up to 16 January
2006, the last date prior to publication of the
first cautionary announcement relating to the
transaction.
3. For purposes of calculating the earnings and
headline earnings per share it was assumed that the
disposal was effected on 1 September 2005.
4. The price per share at which the disposal has been
made.
5. The pro forma financial effects calculations have
been prepared in terms of SAICA guidelines. In view
of the entire Vesta business being disposed of for
cash, the application of IFRS going forward has no
effect.
4. PROPOSED TIMING
It is anticipated that a circular containing details of
the disposal will be posted to shareholders within 28
days.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Having regard to the details provided in this
announcement, Vesta shareholders are no longer required
to exercise caution when dealing in their shares on the
JSE.
Johannesburg
3 April 2006
Corporate Advisor and Transactional Sponsor
Imara Corporate Finance South Africa (Pty) Ltd
Date: 04/04/2006 07:00:44 AM Produced by the JSE SENS Department
