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OLG - Onelogix Group Limited - The disposal of Press Support, Media Express and
withdrawal of cautionary
Onelogix Group Limited
Incorporated in the Republic of South Africa)
(Registration number 1998/004519/06)
(Share code OLG ISIN: ZAE000026399)
("Onelogix")
THE DISPOSAL OF PRESS SUPPORT, MEDIA EXPRESS AND INTERNET EXPRESS; THE
ACQUISITION OF ADDITIONAL SHARES IN MAGSCENE; SHARE BUY-BACK; WITHDRAWAL OF
CAUTIONARY
1 Disposal
Onelogix (Pty) Limited ("company") has sold to Media24 Limited
(Registration Number 1950/038385/06)("purchaser"), with effect from 30
April 2010:
- all the issued shares in Press Support (Proprietary) Limited
(Registration No. 1996/010852/07) ("Press Support"), for a price of
R31,956 million;
- its Media Express division ("Media Express"), for a price of R5,74
million; and
- its 26% shareholding in Internet Express (Proprietary) Limited
(Registration No.1998/006356/07)("Internet Express")for a price of R1.
These transactions, referred to below as the "disposal", are indivisible
and are not subject to any conditions precedent. At the date of this
announcement, the disposal has been implemented.
2 Terms of the disposal
A portion of the price, in aggregate R5,5 million, has been retained in an
attorney`s trust account pending completion of audited financial statements
showing that the company has met warranties regarding net tangible asset
values delivered to the purchaser on implementation of the disposal. On the
date of this announcement, the balance of the price has been paid.
The remainder of the terms of the disposal, including warranties and a five
year restraint of trade obligation on Onelogix, are as usual for a
transaction of this sort.
3 Rationale for the disposal
Onelogix is not well placed to continue to grow its operations that
distribute newspapers and magazines and the disposal is opportune as an
exit from the major part of these operations. The disposal allows Onelogix
management to focus more on the larger businesses within the company. The
proceeds of the disposal, after funding the acquisition and share
repurchase referred to below, will reduce gearing pending evaluation of
acquisition opportunities.
4 Pro forma financial effects of the disposal
The pro forma financial information set out below has been prepared for
illustrative purposes only, to provide information on how the disposal may
have impacted on the historical results and financial position of Onelogix.
Because of its nature, the pro forma financial information may not give a
fair reflection of Onelogix`s financial position after the disposal, or the
effect of the disposal on Onelogix`s future earnings.
The calculation of the pro forma financial information is the
responsibility of the directors.
Before After the
(cents) disposal %
(cents) change
Earnings per share 7.0 8.6 23.7
Headline earnings per share 7.0 6.1 (12.2)
Net asset value per share 80.0 82.5 3.1
Tangible net asset value per share 53.9 67.1 24.4
Notes and assumptions:
- The figures set out in the "Before" column above have been extracted from
the unaudited interim results for the six months ended 30 November 2009.
- The figures set out in the "After the disposal" column above have been
calculated after removing the results attributable to Press Support, Media
Express and Internet Express extracted from the unaudited interim results
for the six months ended 30 November 2009, and the adjustments referred to
below.
- The disposal is assumed to have been implemented on 1 June 2009 for
earnings and headline earnings per share purposes and on 30 November 2009
for net asset and tangible net asset value per share purposes.
- Press Support, Media Express and Internet Express had an attributable net
profit of R3,5 million for the six months ended 30 November 2009, and a net
asset value of R30,3 million;
- The purchase consideration of R37,696 million payable in cash, is assumed
to be paid on 1 June 2009 for earnings and headline earnings per share
purposes and on 30 November 2009 for net asset and tangible net asset value
per share purposes;
- Profit on the disposal net of tax and deferred tax of R7,397 million has
been recognised;
- Costs in respect of the disposal, estimated at R750 000 have been expensed
- The cash on hand arising on the disposal has been used to reduce interest
bearing borrowings at a rate of 10%;
- Taxation has been provided for at 28%;
- There are 210 million ordinary OLG shares in issue before and after the
disposal.
5 Acquisition of additional shares in Magscene
Magscene (Proprietary) Limited ("Magscene") is an importer and distributor
of international magazines. The company, which holds 60% of the shares in
Magscene, has acquired from David Ralph a further 20% shareholding in
Magscene for a price of R1,5 million. This acquisition, which is
unconditional and effective 31 May 2010, serves to simplify shareholder
relationships. The remaining terms of the acquisition, including warranties
and restraint of trade obligations on the seller, are as usual for a
transaction of this sort.
The financial effects of the acquisition, which are the responsibility of
the directors of Onelogix, are not significant.
6 Specific share repurchase
Onelogix has agreed to repurchase eight million shares in Onelogix from
related parties, being Jeremy Eaton (the managing director of Press Support
and a director of the company until his resignation on implementation of
the disposal) and The Eaton Family Trust, for a price of R0.85 per share
plus interest at prime less 3%, subject to compliance with the provisions
of the Companies Act, 1973 and the JSE Listings Requirements. In due
course, Onelogix will make a further announcement in this regard, detailing
timing and process in connection with the repurchase.
The financial effects of the specific repurchase, which are the
responsibility of the directors of Onelogix, are not significant.
7 Withdrawal of cautionary announcement
Shareholders are no longer required to exercise caution in dealing in
Onelogix shares.
12 May 2010
Designated advisor, corporate advisor and legal advisor
Java Capital (Proprietary) Limited
Date: 12/05/2010 16:01:02 Supplied by www.sharenet.co.za
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