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TMT - Trematon - Firm Intention By Tremgrowth (Proprietary) Limited to make an

Release Date: 07/06/2010 17:00
Code(s): TMT
Wrap Text

TMT - Trematon - Firm Intention By Tremgrowth (Proprietary) Limited to make an offer to shareholders of Club Mykonos Langebaan Limited by way of a scheme of arrangement in terms of section 311 of The Companies Act 61 Of 1973, as amended Trematon Capital Investments Limited (Incorporated in the Republic of South Africa) Registration number 1997/008691/06 Share code: TMT ISIN: ZAE000013991 ("Trematon" or "the Company") FIRM INTENTION BY TREMGROWTH (PROPRIETARY) LIMITED TO MAKE AN OFFER TO SHAREHOLDERS OF CLUB MYKONOS LANGEBAAN LIMITED BY WAY OF A SCHEME OF ARRANGEMENT IN TERMS OF SECTION 311 OF THE COMPANIES ACT 61 OF 1973, AS AMENDED 1. INTRODUCTION 1.1 Further to the cautionary announcements released on SENS on 18 May and 24 May 2010 by Trematon, the company hereby announces that a notice of firm intention to make an offer to acquire the entire issued share capital of Club Mykonos Langebaan Limited ("CML") has been delivered to the board of directors of CML by Tremgrowth (Proprietary) Limited ("Tremgrowth"), a wholly owned subsidiary of Trematon ("the transaction"). 1.2 The purpose of this announcement is to provide Trematon shareholders with the salient terms of the offer. 2. The transaction 2.1 It is proposed that Tremgrowth will acquire, by way of a scheme of arrangement in terms of section 311 of the Companies Act, No. 61 of 1973, as amended (the "Companies Act") ("the scheme"), all the issued ordinary shares in the capital of CML ("CML shares") from CML shareholders other than Tremgrowth ("CML shareholders"). Tremgrowth currently holds CML shares representing 34,61% of the issued share capital of CML. 2.2 The implementation of the offer and scheme will be subject to the conditions precedent referred to in paragraph 10 below. 3. Terms of the offer 3.1 In terms of the transaction CML shareholders may elect to receive a cash consideration per CML share of R2.00 ("cash consideration") or to retain their CML shares ("scheme retention alternative"). If a CML shareholder fails to make a valid election he will be deemed to have elected the cash consideration. 3.2 The operative date of the transaction is expected to be during the third quarter of 2010. 4. Rationale 4.1 Trematon is a JSE Limited ("JSE") listed investment group with investments, subsidiaries and associates engaged in a variety of industries which make up its investment portfolio. Most of the investments are in the Western Cape and are related in some way to property or leisure. The company also engages in investment and trading in shares which are not specific to any industry. The primary aim of the group is to generate superior risk-adjusted long- term returns for its shareholders. 4.2 CML is an unlisted public company with more than 7 000 shareholders. Until 2005 there was no trade in CML shares and it was only thereafter that informal, and at times inefficient and illiquid, "over the counter" trading in CML shares took place. Since the contraction in the property market around 2008 and 2009, the marketability and the market value of CML shares has substantially decreased. The major assets of CML are undeveloped land in the Club Mykonos Resort and a minority stake (29.6%) in the Mykonos Casino. 4.3 Tremgrowth currently holds a 34,61% interest in CML. Trematon would like to consolidate its control of the operations of CML and the acquisition of more than 50% of the issued shares would achieve this objective. This would enable more efficient decision making with regard to strategy and/or major capital projects. Trematon wishes to buy more shares in CML and there appears to be a large body of CML shareholders who wish to sell their shares from time to time but no efficient, cost-effective mechanism exists to conclude these transactions on a material scale. The proposed scheme achieves the objectives of both Trematon and shareholders who wish to sell at a fair price. 5. Pro forma financial effects of the transaction on Trematon shareholders The unaudited pro forma financial effects of the transaction on Trematon shareholders set out below are based on the published unaudited Trematon results and the published unaudited CML results for the six and eight months ended 28 February 2010 respectively. The unaudited pro forma financial effects are the responsibility of the board of directors of Trematon and have been prepared for illustrative purposes only and because of their pro forma nature may not give a fair reflection of Trematon`s financial position or results of operations after the transaction. Before After % change
Profit per share 10.6 9.0 (15.1%) (cents) Headline profit 17.7 16.1 (9.0%) per share (cents) NAV and tangible 92.0 92.0 0% NAV per share (cents) Number of shares 174 872 545 174 872 545 0% in issue Weighted average 174 872 545 174 872 545 0% number of shares in issue Notes and assumptions: 1.) The financial information in the "Before" column is based on the published unaudited interim results of Trematon for the six months ended 28 February 2010. 2.) The financial information in the "After" column assumes that: a. Trematon acquired CML with effect from 1 September 2009 for income statement purposes, and with effect from 28 February 2010
for balance sheet purposes; b. Trematon will acquire all of the CML shares not already held by Tremgrowth, excluding those shares in respect of which irrevocable undertakings were received in terms of paragraph 9
below and that a total of 17 164 867 (48.76%)CML shares are therefore eligible to elect acceptance of the cash consideration of R2,00 for each CML share. c. The 12 183 065 (34.61%)shares already held by Tremgrowth are excluded; d. A total of 5 852 566 (16.63%)CML shares have irrevocably undertaken to elect the scheme retention alternative as set out in paragraph 9 below;
e An after-tax cost of capital of 10% was applied to the cash consideration of the offer. 6. CATEGORISATION OF TRANSACTION
In terms of the JSE Listings Requirements, the transaction will be a category 2 transaction and will not require the approval of Trematon shareholders. 7. SCHEME MEETING FOR CML SHAREHOLDERS CML shareholders will be required to consider and approve the scheme in a scheme meeting. A circular with details of the scheme, its salient dates and a notice of the scheme meeting will be posted to CML shareholders in terms of the provisions of the Securities Regulation Panel ("SRP") Code on Takeovers and Mergers ("SRP Code"). In terms of S 311(2)(b) of the Companies Act, the scheme must be approved by a majority representing not less than three-fourths of the votes exercisable by the CML shareholders (other than Tremgrowth) present and voting, either in person or by proxy, at the scheme meeting. 8. Guarantee As required under the Code, Trematon has provided confirmation to the satisfaction of the SRP (in the form of an irrevocable bank guarantee) that it has sufficient financial resources to pay the cash consideration in respect of the CML scheme shares having regard to the irrevocable undertakings detailed in paragraph 9 below. 9. CML Shareholder undertaking As at the date of this announcement 13 CML shareholders, holding 5 852 566 CML shares, being 16.63% of the total issued share capital of CML, have irrevocably undertaken (without affecting their right to vote on the scheme at the scheme meeting) to elect the scheme retention alternative in the event that the scheme is sanctioned by the High Court. 10. Conditions precedent to the scheme The implementation of the scheme is subject to the following conditions precedent:- 10.1 the SRP approving the necessary documentation to be distributed to CML shareholders to the extent required in law; 10.2 the High Court of South Africa (Western Cape High Court, Cape Town) ("the Court") ordering the convening of a scheme meeting to approve the scheme; 10.3 the approval of the scheme by a majority of scheme members, representing not less than three-fourths of the votes exercisable by the scheme members present and voting, either in person or by proxy, at the scheme meeting; 10.4 the Court sanctioning the scheme in terms of the Companies Act; 10.5 the lodging of a certified copy of the Order of Court sanctioning the scheme with, and registration thereof by, the Companies and Intellectual Properties Registration Office in terms of the Companies Act; 10.6 Tremgrowth upon completion of the scheme, and having regard to the CML shares already held by it, being the holder of not less than 50% plus 1 CML share of the entire issued share capital of CML. Trematon will be entitled to waive the condition in 10.6. The fulfilment or otherwise of the conditions precedent will be announced by CML in the press. 11. OPINIONS AND RECOMMENDATIONS In terms of the Code, the directors of CML must obtain appropriate external advice as to how the transaction will affect CML shareholders, and must disclose the substance of such advice to CML shareholders. The directors of CML have appointed PKF (Cpt) to provide such advice and their full report will be included in the circular to be sent to CML shareholders in connection with the transaction. 12. Withdrawal of cautionary announcement Trematon shareholders are advised that, as a result of the publication of this announcement, the relevant cautionary announcement is now withdrawn. Cape Town 7 June 2010 Sponsor Sasfin Capital (A division of Sasfin Bank Limited) Attorneys to the Scheme Bernadt Vukic Potash & Getz Date: 07/06/2010 17:00:01 Supplied by www.sharenet.co.za 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.

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