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Disposal of interests in Monte cinemas and Suncoast cinemas
TIMES MEDIA GROUP LIMITED
(Formerly Richtrau No. 229 Proprietary Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2008/009392/06)
Ordinary Share Code: TMG
Ordinary share ISIN: ZAE 000169272
(“TMG” or “the Company”)
DISPOSAL OF INTERESTS IN MONTE CINEMAS AND SUNCOAST CINEMAS
1. DISPOSAL OF 51% OF MONTE CINEMAS
1.1. Shareholders are advised that the Company, through its
wholly-owned subsidiary Avusa Entertainment Investments
Proprietary Limited (“Times Media”), has entered into an
agreement with Tsogo Sun Casinos Proprietary Limited (“the
Purchaser”), Nu Metro Filmed Entertainment Proprietary
Limited (“Nu Metro Filmed Entertainment”) and Monte Cinemas
Proprietary Limited (“Monte Cinemas”) in terms of which
Times Media has disposed of its 51% shareholding in and all
claims of whatsoever nature against Monte Cinemas to the
Purchaser for a total purchase consideration of R20 million
(“the Monte Disposal”).
1.2. In addition to the Monte Disposal, the Company is also in
the process of disposing of Nu Metro Cinemas. It should be
noted that the Monte Disposal does not form part of the
disposal of Nu Metro Cinemas.
2. RATIONALE FOR MONTE DISPOSAL
2.1. As part of TMG’s turnaround strategy, it has specifically
decided to exit non-core businesses identified within TMG.
One such business is Monte Cinemas, which falls within the
Company’s entertainment division and which forms the
subject matter of the Monte Disposal.
2.2. Monte Cinemas provide film entertainment and related
services to the South African market and as such, is not
aligned to TMG’s core businesses, being media and retail
solutions.
2.3. In terms of the Monte Disposal, Times Media’s co-
shareholder in Monte Cinemas elected to exercise its pre-
emptive right and acquire Times Media’s entire shareholding
in Monte Cinemas. Therefore the Monte Cinemas will not form
part of the Nu Metro Cinema disposal process.
3. DETAILS OF THE MONTE DISPOSAL
3.1. Purchase Consideration
3.1.1. Times Media will dispose of its 51% shareholding in and
all claims of whatsoever nature against Monte Cinemas
(“the Monte Equity”) to the Purchaser for a total
purchase consideration of R20 000 000, payable in cash on
the effective date of the Monte Disposal, against
delivery of the Monte Equity.
3.1.2. The proceeds of the Monte Disposal will be used to reduce
gearing and for potential future acquisitions more
aligned to TMG’s core business.
3.2. Effective Date
3.2.1. The effective date of the Monte Disposal is 28 June 2013,
being the 3rd business day following the date of
signature of the Monte Disposal agreement by the last
party signing (“the Effective Date”).
3.2.2. The Monte Disposal is not subject to the fulfilment of
any suspensive conditions.
3.3. Other significant terms
Following the implementation of the Monte Disposal
agreement the Purchaser will own 100% of the issued shares
in Monte Cinemas and the current shareholders' agreement in
respect of Monte Cinemas, the current management agreement
in terms of which Monte Cinemas appointed Nu Metro
Theatres, then a division of Nu Metro Filmed Entertainment,
to manage the business and affairs of Monte Cinemas and the
intellectual property licence agreement in terms of which
Nu Metro Filmed Entertainment granted Monte Cinemas the
right to use the name and trademark "Nu Metro" and
associated logo, in relation to the business of Monte
Cinemas will be cancelled ipso facto with effect from the
Effective Date.
4. MANAGEMENT AGREEMENT
Times Media Proprietary Limited will continue to manage the
business operated by Monte Cinemas following the conclusion
of the Monte Disposal in terms of a new management
agreement in terms of which (i) Times Media Proprietary
Limited shall render certain services to Monte Cinemas with
effect from the Effective Date and (ii) Times Media
Proprietary Limited shall grant to Monte Cinemas a non-
exclusive, royalty-free licence to use the "Nu Metro" trade
mark in connection with the business of Monte Cinemas for
the duration of the new management agreement.
5. FINANCIAL EFFECTS OF THE MONTE DISPOSAL
In terms of the JSE Listings Requirements the financial
effects of the Monte Disposal are not significant and are
below the reporting threshold.
6. MONTE DISPOSAL CATEGORISATION AND RELATED PARTY TRANSACTION
6.1. The Purchaser holds 49% of the total issued share capital
of Monte Cinemas and as such, is a material shareholder in
Monte Cinemas. The Purchaser is therefore viewed as a
related party in terms of the Listings Requirements of the
JSE Limited (“JSE”) and the Monte Disposal is therefore
viewed as a related party transaction.
6.2. Due to the size of the Monte Disposal, the Monte Disposal
is categorised as a small related party transaction in
terms of the JSE Listings Requirements. Accordingly,
shareholder approval is not required in order to implement
the Monte Disposal and this announcement is for information
purposes only.
7. MONTE DISPOSAL INDEPENDENT EXPERT VALUATION
7.1. In terms of section 10.4(f) of the JSE Listing Requirements
the Company has appointed PSG Capital as the independent
expert in order to provide an opinion on the fairness of
the Monte Disposal insofar as the shareholders of the
Company are concerned. Based on the opinion provided, the
board of TMG has found the Monte Disposal to be fair to
shareholders.
7.2. The said fairness opinion has been approved by the JSE and
will lie open for inspection at the Company’s registered
office for a period of 28 (twenty eight) days from the date
of this announcement.
8. DISPOSAL OF 50% OF SUNCOAST CINEMAS
8.1. In addition to the Monte Disposal, Times Media has also
disposed of its 50% shareholding in Three Groups Cinemas
Proprietary Limited (“Suncoast Cinemas”) to Whitehorse
Investments Proprietary Limited and Avalon Three Groups
Investments Proprietary Limited, the other shareholders of
Suncoast Cinemas in equal shares (“the Suncoast
Disposal”)for a total consideration of R17 million. The
Suncoast Disposal does not require shareholder approval and
is disclosed to shareholders herein for information
purposes only.
8.2. Suncoast Cinemas also provides film entertainment and
related services to the South African market and as such,
is similarly not aligned to TMG’s core businesses as
described above.
8.3. In terms of the Suncoast Disposal, TMG’s co-shareholder in
Suncoast Cinemas elected to exercise its pre-emptive right
and acquire Times Media’s entire shareholding in Suncoast
Cinemas.
8.4. It should be noted that the Suncoast Disposal does not form
part of the disposal of Nu Metro Cinemas referred to above.
By order of the board
25 June 2013
Johannesburg
Sponsor: PSG Capital Proprietary Limited
Legal Advisor: Edward Nathan Sonnenbergs Inc.
Date: 25/06/2013 04:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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