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BCK - Blackstar Group - SE Acquisition of a 28% interest in Mvelaphanda Group
Limited ("MVG") and appointment to the board of directors of MVG
Blackstar Group SE
Previously Blackstar Group PLC
(Incorporated in England and Wales)
(Company number SE 30)
(registered as an external company with limited liability in the Republic of
South Africa under registration number 2011/008274/10)
Share code: BCK
ISIN: GB00B0W3NL87
("Blackstar" or "the Company")
ACQUISITION OF A 28% INTEREST IN MVELAPHANDA GROUP LIMITED ("MVG") AND
APPOINTMENT TO THE BOARD OF DIRECTORS OF MVG
Blackstar, the African focussed investment company, is pleased to announce
that it has acquired 146,423,470 ordinary shares in MVG (the "Shares"),
representing c.28% of MVG`s issued ordinary share capital (excluding treasury
shares), for R3.20 per share (the "Acquisition"). The Shares have been
acquired from funds managed by Coronation Fund Managers for a total cash
consideration of c.R470 million (c.GBP38 million).
MVG is an iconic South-Africa focused broad-based black economically-empowered
investment holding company listed on the Main Board of the Johannesburg Stock
Exchange. Since September 2009, MVG has implemented an investment strategy
focussed on unlocking value for MVG shareholders. Today, MVG maintains its
focus on gradually unbundling the Group`s assets to realise value and generate
a return on capital for shareholders. As at 17 January 2012, MVG`s
diversified portfolio included significant investments in South Africa`s
financial, media, entertainment, construction and healthcare sectors.
On 8 December 2011, Blackstar announced its firm intention to make an offer to
acquire the entire issued share capital of MVG (the "Original Offer") by way
of a scheme of arrangement. This Original Offer was withdrawn on 20 December
2011. Whilst the proposed acquisition of the entire issued share capital of
MVG would have given Blackstar additional scale, the Acquisition gives the
Company similar benefits to the Original Offer but has a lower risk profile
and offers Blackstar shareholders a greater discount to NAV than under the
Original Offer.
Following the Acquisition Blackstar has become the largest single investor in
MVG and has acquired its stake at an 8% discount to the 5 day volume weighted
average price per share of R3.46 and a 16% discount to the estimated MVG NAV
per share of R3.81 as at 17 January 2012. It is estimated that Blackstar`s
investment in MVG will constitute c.46% of Blackstar`s NAV. The Board of
Blackstar believe this transaction will be NAV enhancing for Blackstar
shareholders.
To fund the Acquisition, Blackstar has used R150 million (c.GBP12 million) of
its own cash resources and will draw down R320 million (c.GBP26 million) on a
debt facility provided by Investec Bank Limited for the purpose of this
transaction (the "Investec Facility"). The Investec Facility has a term of two
years and accrues interest at the South African Prime Rate (currently 9%) plus
fifteen basis points per annum; interest is payable semi-annually in arrears.
It is planned that cash returned to MVG shareholders as a consequence of its
stated realisation and unbundling strategy will be applied against the
Investec Facility enhancing the effective discount to NAV of the Acquisition.
In addition, as announced today by MVG, Messrs Andrew Bonamour and William
Marshall-Smith, Chief Executive Officer and Director of Blackstar Group (Pty)
Limited respectively have been appointed to the MVG Board with effect from
Thursday, 19 January 2012. Andrew Bonamour will assume the role of interim
chief executive officer of MVG. Their appointments will be subject to
shareholder approval at the next annual general meeting of MVG. It should be
noted that all directors fees received by Messrs Bonamour and Marshall-Smith
in relation to MVG shall be for the benefit of Blackstar.
The new board of MVG will conduct a strategic review to map the future of the
company and confirm its executive management structure. The results of this
review will be made shortly.
Commenting on the Acquisition, Andrew Bonamour, Director of Blackstar, said:
"We believe MVG is an exciting investment opportunity. While the proposed
merger would have given us additional scale, this investment gives us similar
benefits that the merger would have, albeit on a smaller scale, but at a lower
cost to Blackstar. We think our investment breathes new life into Mvela where
we think there is a lot of value to be unlocked for all parties."
and Mikki Xayiya, Executive Chairman of the Board of MVG, said:
"We welcome Blackstar as an interested and committed MVG shareholder. I have
been impressed with the Blackstar team and believe their experience and track
record of extracting value will be beneficial to the MVG board and MVG`s
remaining assets. MVG has been without a dedicated management team since
December 2010 and therefore the involvement of the Blackstar representatives
will be highly beneficial. The initial objective for the new MVG board will be
to map the future strategy for the company and its investments and we look
forward to doing this in a short frame of time."
18 January 2012
London
Media enquiries contact: Andrew Bonamour +27 (0) 82 389 9850
Legal advisors to Blackstar: Werksmans Inc.
Banker to Blackstar: Investec Bank Limited
For further information, please contact:
Blackstar Group SE John Kleynhans +352 402 505 427
PSG Capital (Pty) Limited Sponsor
David Tosi +27 (0) 21 877 9602
Liberum Capital Limited AIM Nomad and
Chris Bowman / Broker +44 (0) 20 3100 2222
Christopher Britton
Date: 18/01/2012 15:15:01 Supplied by www.sharenet.co.za
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