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BEE
BEE
Beget - Acquisition and Withdrawal of Cautionary Announcement
BEGET HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2002/011635/06
Share code: BEE & ISIN number: ZAE000044111
("Beget" or "the company")
ACQUISITION OF SEAGICOM (PROPRIETARY) LIMITED INTRODUCTION OF A 26 % BEE
SHAREHOLDER WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcement dated 23
August 2006 advising that Beget was engaged in discussions to
introduce a Black Economic Empowerment ("BEE") shareholding in the
company. Beget is now pleased to advise shareholders that an agreement
has been successfully concluded with Seagicom (Proprietary) Limited
("Seagicom") and its controlling BEE shareholders ("the BEE vendors")
to acquire the shares in Seagicom ("the acquisition"), through
operating subsidiary Beget Solutions (Proprietary) Limited, for a
total purchase consideration of R4 950 000. The purchase
consideration will be settled by the issue of 165 000 000 Beget
ordinary shares at 3 cents per share.
2. RATIONALE
Seagicom is a black-owned company, the principal shareholder of which
is Mr Tebogo Mogashoa. Upon implementation of the acquisition Mr
Mogashoa will join the board of directors of Beget as an executive
director. Seagicom will present Beget with the opportunity to supply
biometric devices, similar to Beget"s existing proven GPRS biometric
time and attendance with access control unit, but adapted to be used
as a biometric driver authentication system in vehicles. Seagicom will
provide additional opportunities to supply new products and
applications using existing GSM Location Based and Short Message
services. It will also allow Beget to target contracts within local
and national government as well as large corporate applications. The
acquisition will be both earnings enhancing for Beget and will result
in a 26% direct BEE shareholding in the company.
Beget believes Seagicom and the BEE vendors are the ideal BEE partner
and will be of strategic importance to the company, as technical
synergies and a common understanding of GSM applications exist. The
acquisition follows an existing and mutually successful business
relationship between the parties.
3. SALIENT TERMS OF THE ACQUISITION
The purchase consideration of R4 950 000 will be settled by an issue
to Seagicom of a maximum of 165 000 000 Beget shares at 3 cents per
share, resulting in the BEE vendors owning approximately 26% of
Beget"s total issued share capital after the implementation of the
acquisition.
The number of shares to be issued is subject to performance
warranties, which, if not met, will result in a proportionate
adjustment. The performance warranties are directly linked to Seagicom
ensuring 5000 mobile biometric devices to be supplied by Beget.
4. CONDITIONS PRECEDENT
The acquisition is subject to the following conditions precedent:
* Approval of the acquisition by Beget shareholders in general
meeting;
* Approval of the final mobile biometric device proof of concept by
no later than 15 December 2006; and
* Approval of the acquisition by the Competition Commission and
other regulatory authorities to the extent that it may be
required.
5. FINANCIAL EFFECTS
The unaudited pro forma financial effects for which the Beget board of
directors ("the Beget board") are responsible, are presented for
illustrative purposes only and may not give a fair reflection of the
financial position and results of operations post the implementation
of the acquisition. The table below sets out the unaudited pro forma
financial effects of the transaction.
Before the After the Change
acquisition acquisition %
(cents)(1) (cents)
Loss / Earnings per share -2.01 0.032) 101.5%
Headline loss / profit per share -1.96 0.07(2) 103.6%
Net Asset Value ("NAV") per share 0.33 2.23(3) 575.8%
Tangible Net Asset Value ("NTAV") -2.43 -0.25(3) 89.7%
per share
Weighted average number of shares 409 379 574 379(4) 40%
(`000)
Shares in issue (`000) 481 892 646 892(4) 34%
Notes:
(1) The figures in the "Before the acquisition" column have been
extracted from the audited published financial results of Beget
for the sixteen months ended 30 April 2006.
(2) In calculating the earnings per share and headline earnings per
share it was assumed that the transaction was effective on 01
January 2005 after providing for estimated transaction costs of
R500 000. No provision for taxation was made as the company has
a calculated assessable tax loss.
(3) In calculating NAV per share and NTAV per share it was assumed
that the transaction was effective on 30 April 2006.
(4) Assuming the maximum number of 165 000 000 shares were issued to
settle the purchase consideration.
6. CATEGORISATION OF THE ACQUISITION AND PUBLICATION OF CIRCULAR
The acquisition is a category 1 transaction in terms of the Listings
Requirements of the JSE Limited. A circular containing full details
of the acquisition and incorporating a notice of general meeting will
be posted to shareholders within 28 days.
7. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Having regard to the details provided in this announcement, Beget
shareholders are no longer required to exercise caution when dealing
in their Beget shares.
Johannesburg
13 October 2006
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Date: 13/10/2006 10:25:06 AM Produced by the JSE SENS Department
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