| Mon 12 Mar 2007, 14:28 | | MST - Mustek - Related Party Transaction and Withd |
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MST
MST
MST - Mustek - Related Party Transaction and Withdrawal of Cautionary
MUSTEK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/070161/06)
Share Code: MST
ISIN Code: ZAE000012373
("Mustek" or "the company")
RELATED PARTY TRANSACTION AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Shareholders are referred to the cautionary announcement published in the press
on 26 February 2007 ("cautionary announcement") and are advised that Mustek has
reached an agreement whereby Mustek will acquire 19 045 890 Rectron Holdings
Limited ("Rectron") shares from Mr H Lu and 20 133 810 Rectron shares from the
Lu Chang Trust ("the transaction") for an initial consideration of R49 751
277,81 and a potential further consideration of R46 800 000 over a five year
period, subject to certain defined milestones being reached.
Mr H Lu is a director of Rectron and the transaction is therefore deemed as a
related party transaction in terms of Section 10 of the Listings Requirements of
the JSE Limited ("JSE").
Rationale
Mustek intends to consolidate its investment in the sourcing and purchasing of
hardware, software and peripherals for computers and electronic equipment and
the distribution thereof.
Salient terms
In terms of the Sale of Shares Agreement ("the agreement"), Mustek shall acquire
34,2% of the shares in Rectron from the remaining shareholders, being Mr H Lu
and the Lu Chang Trust ("the Sellers"). The duration of the agreement is five
years subject to certain events that may occur.
Conditions precedent
The transaction is subject to the fulfilment of the following conditions
precedent:
- the approval of the shareholders of Mustek;
- the approval of the Competition Commission;
- the necessary approval required from the JSE;
- that one of the Sellers, Mr H Lu be afforded voting rights at shareholders
level of 25,1% for the duration of the agreement, alternatively until the
final payment by Mustek to the Sellers; and
- that the necessary regulatory approval be obtained.
Unaudited pro forma financial effects
The table below sets out the unaudited pro forma financial effects of the
transaction for the six month period ended 31 December 2006. The unaudited pro
forma financial effects are presented for illustrative purposes only and because
of their nature may not give a fair reflection of the company`s results,
financial position and changes in equity after the transaction.
It has been assumed for purposes of the unaudited pro forma financial effects
that the transaction took place with effect from 1 July 2006 for income
statement purposes and 31 December 2006 for balance sheet purposes.
The directors of the company are responsible for the preparation of the
unaudited pro forma financial effects.
Per ordinary share Notes Before After Change
(cents) (cents) (%)
Earnings 1 40,8 43,2 5,9
Headline earnings 1 41,1 43,5 5,8
Net asset value 2 483,1 502,4 4,0
Net tangible asset value 2 472,4 473,9 0,3
Notes:
1. The amounts in the "Before" column represent the unaudited headline
earnings and earnings per share disclosed in the financial results for
the six months ended 31 December 2006. The amounts in the "After"
column represent the unaudited headline earnings and earnings per
share after the transaction based on the assumption that the
transaction was effective 1 July 2006.
2. The amounts in the "Before" column represent the unaudited net asset
value and net tangible asset value per share as disclosed in the
financial results for the six months ended 31 December 2006. The
amounts in the "After" column represent the unaudited net asset value
and net tangible asset value based on the financial results for the
six months ended 31 December 2006 adjusted for the transaction, had it
been effected on 31 December 2006.
3. An interest rate of 5,68% has been assumed.
4. The closing share price of 1 025 cents per share at 1 July 2006 and
917 cents per share at 31 December 2006 was used to determine the
number of shares to be issued.
Opinions and recommendations
The board of directors of Mustek have considered the terms and conditions of the
transaction and is of the opinion that the transaction is in the best interests
of all of Mustek`s shareholders and, accordingly, recommend that the Mustek
shareholders vote in favour of the resolutions required to implement the
transaction.
The directors of Mustek who directly or indirectly own Mustek shares intend to
vote in favour of the resolutions to implement the transaction in respect of
their shareholdings.
An independent expert will be appointed to advise whether the transaction is
fair and reasonable.
Documentation
A circular to shareholders regarding the transaction, including a notice of
general meeting, will be sent to Mustek shareholders on or about 26 April 2007.
Withdrawal of cautionary announcement
Shareholders are advised that the cautionary announcement is hereby withdrawn
and they no longer need to exercise caution when dealing in their Mustek
securities.
Midrand
12 March 2007
Sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd
Reporting accountants
Deloitte
Registered Auditors
Date: 12/03/2007 14:28:55 Produced by the JSE SENS Department.
