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MMG - MICROmega Holdings Limited - Acquisition of GIM Holdings (Proprietary) Limited ("GIM Holdings") MICROmega HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 1998/003821/06) (Share code: MMG ISIN: ZAE000034435) ("MICROmega" or "the group") ACQUISITION OF GIM HOLDINGS (PROPRIETARY) LIMITED ("GIM Holdings") 1. INTRODUCTION MICROmega shareholders are advised that MICROmega has entered into an agreement with Ian Gregory Morris ("Vendor") to acquire 86% of the issued share capital of GIM Holdings , with effect from 15 October 2010, for a total consideration of R7 240 000 as detailed in paragraph 4 ("the Acquisition") below. The Vendor will retain a 14% interest in GIM Holdings and a lease agreement for the next 12 months has been signed with the Vendor at a rental of R60 000 per month ("the Rental"). 2. NATURE OF BUSINESS OF GIM HOLDINGS GIM Holdings is a property investment company with an investment property consisting of a residential abode situated on Erf 278, Hyde Park Ext 47. The total property size is around 3 600 square Metres. 3. RATIONALE FOR THE ACQUISITION The group see development in this area in the future adding better than average returns to shareholders. Similar development has occurred within the suburb and has been successful. 4. TERMS OF THE ACQUISITION 4.1 Acquisition, consideration and settlement terms The acquisition consideration of R7 240 000 million will be settled as follows: 4.1.1 First payment - R7 240 000 in cash will be paid to the Vendor of GIM Holdings on the closing date of the agreement. A monthly rental of R60 000 has been secured from the Vendor whilst the group commences with the development plans for the property. 5. CONDITIONS PRECEDENT The implementation of the acquisition is subject to the Vendor writing off all and any claims against the company and retaining all obligations of settlement of any financing structures used to fund the deal, limited to the amount owed to third parties on the closing date of the transaction. We confirm that all conditions precedent have been fulfilled. 6. FINANCIAL EFFECTS OF THE ACQUISITION The table below shows the per share effect of the acquisition of GIM Holdings for the six months ended 30 June 2010. The pro forma financial effects, which are the responsibility of the directors of MICROmega, have been prepared for illustrative purposes only and, because of their nature, may not fairly present MICROmega`s financial position as at 30 June 2010, or the effect of future earnings. The financial effects are determined in accordance with the Listing Requirements of the JSE. Notes Unaudited Pro forma Change (%)
At At 30 June 30 June 2010 2010 After GIM Holdings
Acquisition Earnings per share (cents) 3 8.10 8.17 0.86 Headline earnings per share (cents) 4 7.66 7.72 0.83
Net asset value per share (cents) 5 288.42 288.42 Net tangible asset value per share 6 219.86 219.86 (cents) Weighted average number of shares 7 96 953 96 953 Total number of shares in issue 7 96 948 96 948 Notes: 1.The figures in the "Audited" column are extracted from the published unaudited abridged results of MICROmega for the six months ended 30 June 2010. 2.The figures in the "After acquisition" column are adjusted for the inclusion of the financial results as reflected in the management accounts of GIM Holdings for the period commencing 1 January 2010 and ending 30 June 2010. 3.Earnings per share calculations in the "After acquisition" column are based on the following assumptions: -The acquisition was effective 1 January 2010. -The net profit after tax of GIM Holdings for the six months ended 30 June 2010 was R58 851. 4.Headline earnings per share calculations in the "After acquisition" column have been based on the following assumptions: -None of the earnings of GIM Holdings are to be excluded for Headline Earnings calculations. 5.The net asset value is calculated on the assumption that GIM Holdings` investment in residential property is fairly valued at R9.5 million and GIM Holdings` net asset value is R8.38 million. The acquisition consideration is based on the net asset value of GIM Holdings and no premium is payable. 6.The net intangible asset value is calculated on the assumption that GIM Holdings` investment in residential property is fairly valued at R9.5 million and GIM Holdings` net asset value is R8.38 million. The acquisition consideration is based on the net asset value of GIM Holdings and no intangible assets arise based on the transaction. 7.The weighted average number of shares and the actual number of shares in issue have not been changed as securities of the company do not form part of the purchase consideration. 7. OTHER MATTERS The articles of GIM Holdings will be amended to comply with the JSE`s Listing Requirements. 8. RELATED PARTY TRANSACTION Shareholders are advised that Ian Gregory Morris is the Executive Chairman of MICROmega, and as such this is a related party transaction in terms of the JSE Limited Listing Requirements. This transaction is classified as a small related party transaction and thus the provisions of 10.4 do not apply. Paragraph 10.7 (b) has been complied with, and both the Acquisition and the Rental have been declared to be fair by an independent professional expert, namely Arcay Moela Sponsors (Proprietary) Limited and the fairness opinion has been submitted to the JSE for review and approval. The fairness opinion will lie for inspection at MICROmega`s registered office for a period of 28 days from the date of announcement. Sandton 12 October 2010 Transactional Sponsor Arcay Moela Sponsors (Proprietary) Limited Independent Professional Expert Arcay Moela Sponsors (Proprietary) Limited Date: 12/10/2010 10:12:22 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.
