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KGM
KGM
KAGISO - Acquisition of 20% interest in Jacaranda
KAGISO MEDIA LIMITED
(Incorporated in the Republic of South Africa)
(Reg No 1957/000036/06)
Share Code: KGM & ISIN: ZAE000014007
("Kagiso Media" or "the company")
Acquisition of further indirect interest in Jacaranda FM (Proprietary) Limited
("Jacaranda")
1. Introduction
Subject to the conditions precedent set out below, Kagiso Media has
acquired 100% of the share capital of Little Swift Investments 36 (Pty) Ltd
("Little Swift") from Tiso Private Equity Fund 1 En Commandite Partnership,
whose holding represents 20% of the issued share capital of Jacaranda. The
purchase price consideration will be based on the June 2006 audited
financial statements of Jacaranda and the estimated purchase price, is
R125mil. The consideration will be adjusted for the pro rata portion of the
cash in the business on the effective date of the acquisition, namely 1
July 2006.
2. Rationale for the acquisition
Kagiso Media controlled Jacaranda since 1 August 2004, effectively owning
60% of the station. The additional stake will increase the company"s
earnings as well cash returns and follows the company"s strategy to
increase its stake in its high margin radio assets to the optimum allowable
shareholding and control under the current regulatory framework.
The net cash consideration will be funded by borrowings.
3. Conditions precedent
The acquisition is subject to the fulfillment of certain conditions
precedent including the approval of the Independent Communication Authority
of South Africa and a due diligence investigation of Little Swift.
4. Financial effects
The table below sets out the pro forma financial effects of the
acquisition, and has been provided for illustrative purposes only, to the
un-audited financial information for the six months to 31 December 2005.
The pro forma financial effects are the responsibility of the directors of
Kagiso Media.
Before After Percentage
(cents per (pro forma change
share) cents per
share)
Earnings/ headline 41.5 (1) 43.5 (2) 4.6
earnings (basic)
There will be no material effect on the net asset value or tangible net
asset value.
Notes:
(1) Kagiso Media earnings for the interim period ended 31 December 2005,
based on the issued share capital of 132 461 550 Kagiso media shares
in issue for the period.
(2) Based on the aggregate of Kagiso Media"s earnings, the additional
earnings acquired from Jacaranda and the assumed cost of funding the
transaction.
5. Categorization of the acquisition
The acquisition has been catogorised as a category 3 transaction in terms
of section 9.5(a) of the JSE Listings Requirements. Once the consideration
has been finalized an announcement will be made on SENS.
By order of the board
Sandton
19 June 2006
Sponsor: Investec Securities Limited
Date: 19/06/2006 05:15:02 PM Produced by the JSE SENS Department
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