Sharenet Sites 
Sharenet Sites
Disposal of shareholding in Random House Struik Proprietary Limited to a Related Party
TIMES MEDIA GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2008/009392/06)
Ordinary Share Code: TMG
Ordinary share ISIN: ZAE000169272
(“TMG” or “the Company”)
DISPOSAL OF SHAREHOLDING IN RANDOM HOUSE STRUIK PROPRIETARY
LIMITED TO A RELATED PARTY
1. INTRODUCTION
Shareholders are advised that the Company, through its
wholly-owned subsidiary New Holland Publishing (South Africa)
Proprietary Limited (“NHP”), has entered into an agreement
dated 13 December 2013, in terms of which it will dispose of
its 50,1% (fifty comma one percent) shareholding in Random
House Struik Proprietary Limited (“RHS”) to The Random House
Group Limited (“Random House”) (“the Disposal”).
2. RATIONALE FOR THE 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 RHS, which falls within the Company’s
Books division and which forms the subject matter of the
Disposal.
2.2. RHS is a local publishing company, which promotes books
written in both English and Afrikaans and is underpinned by
a 50-year heritage in general book publishing under the
Struik, Zebra Press and Umuzi imprints. In addition, the
company sells Random House titles published internationally
in the South African market.
3. DETAILS OF THE DISPOSAL
3.1. Purchase Consideration
3.1.1. NHP will dispose of its 50,1% (fifty comma one percent)
shareholding and all claims in RHS to Random House for a
purchase consideration of R36 000 000 (thirty six million
rand)payable in cash.
3.1.2. The proceeds of the Disposal will be used to reduce
acquisition leverage with respect to future acquisitions
more aligned to TMG’s core business.
3.2. Dividend
3.2.1. RHS declared and paid a dividend to its shareholders in
the sum of R9.9 million prior to the effective date of
the Disposal.
3.2.2. The portion of such dividend, attributable to NHP (and
TMG) as a shareholder, is the amount of R5,0 million.
3.3. Conditions Precedent and Effective Date
The Disposal is not subject to any conditions precedent and
the effective date of the Disposal is 25 November 2013.
4. FINANCIAL EFFECTS OF THE DISPOSAL
The table below sets out the pro forma financial effects of
the Disposal on the headline earnings and earnings per shares
and the net asset value and net tangible asset value per
share of TMG, and is based on the audited consolidated group
financial results for the year ended 30 June 2013. The pro
forma financial effects are the responsibility of the
directors of the Company and have been prepared for
illustrative purposes only. Due to their nature, the pro
forma financial effects may not give a true reflection of the
Company`s financial position as at 30 June 2013. The
unaudited pro forma financial effects contained in this
announcement are presented in a manner consistent with the
format and accounting policies adopted by TMG.
Notes Before the Pro forma Percentage
Disposal after the increase /
Disposal (decrease)
Headline 1 and 3 17 13 (24)%
earnings
per share
(cents)
Earnings 1 and 3 (11) (21) (91)%
/(loss) per
share
(cents)
Net asset 2 951 926 (3%)
value per
share
(cents)
Tangible 2 245 233 (5%)
net asset
value per
share
(cents)
Number of 127 077 127 077 -
shares in
issue,
excluding
treasury
shares
(‘000)
Weighted 141 230 141 230 -
average
number of
shares in
issue
(‘000)
Notes and assumptions:
1. The headline earnings and earnings/(loss) per share in the
“Before the Disposal” column are based on the assumption that
the Disposal was effective on 1 July 2012.
2. The net asset value and tangible net asset value per share in
the “Before the Disposal” column are based on the assumption
that the Disposal was effective on 30 June 2013 and that all
transaction costs were paid on the 30 June 2013.
3. Shareholders are referred to the published audited
consolidated group financial results for the year ended 30
June 2013 (specifically notes 13 thereof) for a detailed
determination of headline earnings and earnings/(loss) per
share.
4. Proceeds for NHP’s 50,1% interest is assumed to be R36
million.
5. Transaction costs of R150 000 are assumed and are viewed as
capital expenses and therefore not deductible for income tax
purposes.
6. Capital Gains Tax (“CGT”) is calculated at R1 million.
7. Proceeds (net of transaction costs) from the sale are assumed
to be used to reduce TMG’s borrowings. Interest savings are
calculated at 8,3% per annum net of tax at 28%.
5. CATEGORISATION AND RELATED PARTY TRANSACTION
5.1. Random House holds 49,9% of the total issued share capital
of RHS and as such is a material shareholder in RHS. Random
House is therefore viewed as a related party in terms of
the JSE Listings Requirements and the Disposal is therefore
viewed as a related party transaction.
5.2. Due to the size of the Disposal, the Disposal is
categorised as a small related party transaction.
Accordingly, shareholder approval is not required in order
to implement the Disposal and this announcement is for
information purposes only.
6. INDEPENDENT EXPERT VALUATION
6.1. In terms of section 10.4(f) of the JSE Listing Requirements
the Company appointed PSG Capital as the independent expert
in order to provide an opinion on the fairness of the
Disposal. Based on the opinion provided, the board has
found the Disposal to be fair to shareholders.
6.2. The said fairness opinion 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.
By order of the board
13 December 2013
Johannesburg
Sponsor
PSG Capital
Date: 13/12/2013 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
