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TMG
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
ISIN code: ZAE000169272
('TMG') or ('the Company')
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA.
THE CONTENTS OF THIS ABRIDGED PROSPECTUS AND PRE-LISTING STATEMENT
HAVE BEEN PREPARED BY AND ARE THE SOLE RESPONSIBILITY OF TMG
ABRIDGED PROSPECTUS AND PRE-LISTING STATEMENT
1. Introduction
This abridged prospectus and pre-listing statement relates to the listing of all of TMG's issued
ordinary shares of no par value ('TMG Shares') by way of introduction (the 'Listing'), on the main
board of the securities exchange operated by the JSE Limited ('JSE') in the 'Media' sector under
the share code TMG and the abbreviated name TIMESG, with effect from the commencement of
business on Monday, 10 September 2012 (the 'Date of Listing') or such other date as may be
announced in the press.
TMG issued a prospectus and pre-listing statement on Wednesday, 18 July 2012 (the
"Prospectus"), relating to its offer to acquire the entire issued and to be issued share capital of
Avusa Limited ('Avusa') that it does not beneficially own pursuant to a scheme of arrangement
proposed by the Avusa board between Avusa and the Avusa shareholders (the 'Scheme') for a
consideration ('Scheme Consideration'), at the election of Avusa shareholders, consisting of:
' a cash consideration of R24.00 per Avusa ordinary share ('Cash Consideration'), which Cash
Consideration shall be limited to a maximum aggregate of R1 130 000 000 ('Maximum Cash
Consideration'), subject to increase if the Scheme does not become operative by 30
September 2012, by an amount equivalent to the prime overdraft rate, as published by
FirstRand Bank Limited from time to time, plus 2% calculated daily from 1 October 2012, to
the date of actual payment, inclusive of 1 October 2012 and exclusive of the date of actual
payment; or
' a share consideration of 1.47707 TMG ordinary shares for every Avusa ordinary share
('Share Consideration'), provided that such Share Consideration will be limited to a maximum
of 67.7% of the Avusa ordinary shares ('Maximum Share Consideration'); or
' a combination of the Cash Consideration and the Share Consideration;
provided that where an Avusa shareholder does not make a valid election by 12:00 on Friday 14
September 2012 (the 'scheme consideration record date'), the Avusa shareholder shall be
deemed to have elected to receive the Cash Consideration. The Prospectus also contains the
information required in terms of Section 6 of the JSE Listings Requirements ('Listings
Requirements') in relation to the Listing under the 'Media' sector of the main board of the JSE.
The information in this abridged prospectus and pre-listing statement has been extracted from the
Prospectus.
This abridged prospectus and pre-listing statement is not an invitation to the general public in
South Africa to subscribe for TMG Shares and is issued in compliance with the Companies Act,
71 of 2008 as amended ('Companies Act') and the Listings Requirements for the purpose of
giving information to Avusa shareholders who elect to receive the Share Consideration.
It is proposed that subject to the Listing being implemented and the Scheme becoming operative,
Mvelaphanda Group Limited ("Mvela Group") will distribute of all of the TMG Shares held by it,
constituting 100% of the issued ordinary share capital of TMG, to Mvela Group ordinary
shareholders (the "Unbundling'). The Listing, the Scheme and the Unbundling shall constitute an
inter-conditional and indivisible transaction to be implemented in that order by Avusa, Mvela
Group and the Company (the "Transaction").
The JSE has required the Company, as a condition of the Listing, to ensure that the board of
directors of the Company (the 'Board') is constituted in order to comply with the corporate
governance requirements of the Listings Requirements and the King Report on Governance for
South Africa and the King Report and Code of Governance Principles (King III) _as amended or
replaced from time to time ("King Report and Code"), to the extent applicable. In this regard, the
Board has committed to, by no later than 48 hours before the Date of Listing, appoint additional
directors and otherwise to comply with the other corporate governance requirements of the
Listings Requirements and the King Report and Code, to the extent applicable. The Company
has undertaken to make announcements on the Securities Exchange News Service of the JSE
('SENS') and in the press in this regard. The new Board, once constituted as discussed above,
will, prior to the Listing, accept responsibility for the Prospectus as required by the Listings
Requirements.
2. The Scheme
Following the implementation of the Scheme, the Company will become the registered and
beneficial owner of the entire issued ordinary share capital of Avusa and accordingly, Avusa will
become a wholly owned subsidiary of the Company and the listing of Avusa on the main board of
the JSE will be terminated.
The Company is not seeking to raise any funds through the offer set out in the Prospectus.
3. Overview of TMG
The Company was incorporated in the Republic of South Africa on 11 April 2008. The Company
is an investment holding company whose sole investment is its effective 21.29% interest in
Avusa. The Avusa ordinary shares held by the Company are encumbered in favour of Nedbank
Bank Limited, the subscriber of the cumulative redeemable preference shares in the issued share
capital of the Company ('Preference Shares'), through its wholly owned subsidiary Depfin
Investments Proprietary Limited. The Preference Shares are to be redeemed by the Company by
no later than one day following the Scheme operative date.
Immediately following the Scheme becoming operative, the Company's sole asset will be its
investment in Avusa and it will have no other operations or interests.
3.1 About Avusa
Avusa is a leading South African media and entertainment company with prominent brands
offering innovative media content which is delivered across a variety of platforms.
Avusa's business units consist of the following:
' Media;
' Entertainment;
' Books; and
' Retails Solutions.
Media
Avusa's Media business comprises more than 20 national, regional and community
newspapers, over 25 magazines in consumer, business and specialist fields, as well as
digital and broadcasting enterprises. The business unit is home to the Sunday Times, The
Times, Sowetan, Sunday World, and Avusa's interest in the Business Day, Avusa's interest
in the Financial Mail, Daily Dispatch and the Herald. Magazine brands include SA Home
Owner, Longevity, Elle Decoration and Soccer Life. The digital and broadcast enterprises
include I-Net Bridge, Career Junction, Summit Television and Learning Channel.
Entertainment
The Entertainment business unit includes Nu Metro Theatres, Popcorn Cinema
Advertising, Nu Metro Home Entertainment, Nu Metro Interactive and Nu Metro
Distribution. Nu-Metro Theatres operates cinema multiplexes in South Africa and shows
the latest releases from Hollywood, Bollywood and independent studios. Popcorn
Advertising is Nu Metro's cinema advertising sales division. Nu Metro
Home Entertainment markets and distributes primarily DVD products into the rental and
retail trade and holds distribution licences for 20th Century Fox, Disney, Warner, the BBC,
Universal and various independent studios. Nu Metro Interactive distributes interactive
games into the South African market. Nu Metro Distribution is responsible for fi lm
distribution in the South African market.
The Gallo Music Group, custodian of an archive of more than 80 years of South African
music, is a leading producer, publisher and distributor of recorded music. The music
business unit holds a 40% interest in Warner Music Gallo Africa, a company which has the
exclusive South African rights to Warner Music's international repertoire.
CDT is a manufacturer of CD and DVD products in Africa and maintains state-of-the-art
equipment and systems that are internationally recognised.
Retail
Retail consists of Exclusive Books and Van Schaik Bookstores. Exclusive Books is South
Africa's leading book retailer, with 50 stores in upmarket shopping centres and at major
South African airports. Van Schaik is a national chain of 44 bookstores.
Books and maps
Struik Publishing has five major publishing imprints: Struik, Struik Christian Books, Zebra,
Oshun and Two Dogs. Books and Maps also include South Africa's largest trade book
distributor and warehousing facility, Booksite Afrika. Map Studio is the biggest compiler
and publisher of maps on the African continent, while MAPIT is at the forefront of digital
mapping and services fleet and logistics managers, satellite navigation providers, and
vehicle and asset trackers.
Retail solutions
The Retail Solutions business unit consists of Hirt & Carter, Universal Print, Media Digital,
Collage Litho and Tupper. The business unit is a diversified media business operating in
the retail, liquor, beverage, FMCG supplier and manufacturer, financial, publication and
related markets. The business unit is involved in the development and implementation of
retail marketing solutions and the execution of below-the-line and point of sale solutions.
4. Prospects of the Company
The prospects of the Company are inextricably linked to Avusa. If the Scheme is implemented,
Avusa will become a wholly owned subsidiary of the Company. The Company's Shares will be
listed on the JSE in terms of the Listing and Avusa's ordinary Shares will be delisted from the
JSE.
It is intended that the business of Avusa will continue in its current form post implementation of
the Transaction. It is intended that, following the implementation of the Transaction, certain of
Avusa's subsidiaries will enter into a sale agreement with a wholly owned subsidiary of TMG
('New Opco') ('the Sale of Business Agreement') in terms of which they will dispose of their
businesses to New Opco. The sale of the respective businesses will be subject to New Opco
obtaining approval from the South African Revenue Service (in terms of section 23K(2) of the
Income Tax Act, 1962 as amended ('Income Tax Act') confirming that any interest incurred by
New Opco on the long-term debt raised to finance the acquisition of such businesses will be tax
deductible. The Sale of Business Agreement will be implemented using the roll-over relief
provisions contained in section 46 of the Income Tax Act, in so far as this is possible.
5. Proposed group structure post implementation of the Transaction
Shareholders are referred to the press publication of this abridged prospectus and pre-listing
statement for the diagram depicting the Company's corporate structure.
6. Share Capital
All of the Shares will be listed and the authorised and issued share capital of TMG, as at the Date
of Listing (prior to implementation of the Scheme) will be as follows:
R
Authorised share capital
500 000 000 ordinary shares of no par value
Issued share capital
52 013 862 ordinary shares of no par value 1 568 930 666
16 900 cumulative redeemable A Preference Shares 169
10 500 cumulative redeemable B Preference Shares 105
Total issued share capital 1 568 930 940
The Company has no classes of securities listed on any stock exchange. It is, however recorded
that the TMG Shares are, subject to the Scheme becoming operative, proposed to be listed on
the JSE in terms of the Listing, as envisaged in the Prospectus.
By no later than one day following the Scheme operative date, the Preference Shares will be
redeemed and cancelled.
7. Directors
The names, ages, nationalities, business addresses and functions of the directors of TMG are set
out below:
Executive directors
Andrew Bonamour (41)
Nationality: South African
Business address: 2nd Floor, 11 Crescent Drive, Melrose Arch,
Johannesburg, 2076
Appointed: 19 January 2012
Qualifications: B.Com
Occupation: Director of the Company
Position/principal activities: CEO
William Marshall-Smith (34)
Nationality: South African
Business address: 2nd Floor, 11 Crescent Drive, Melrose Arch,
Johannesburg, 2076
Appointed: 31 May 2012
Qualifications: B.Com, PGDA, CA(SA)
Occupation: Director of the Company
Position/principal activities: Financial Director
Non-executive director
Kuseni Dlamini (45)
Nationality: South African
Business address: 2nd Floor, 11 Crescent Drive, Melrose Arch,
Johannesburg, 2076
Appointed: 11 July 2012
Qualifications: MPhil
Occupation: Independent non-executive director of the
Company
Position/principal activities: Interim Chairman of the Board
8. Corporate governance
Prior to the implementation of the Scheme, Mvela Group owns all of the issued Shares in the
Company and consequently the Company is a wholly owned subsidiary of Mvela Group. The
Company's sole purpose has been to hold Avusa ordinary shares. The Company has been non-
operational, and the Board is newly constituted. As a result, the directors have not yet applied any
of the principles of the King Report and Code. The Board confirms its commitment to the
principles of fairness, accountability, responsibility and transparency as advocated in the King
Report and Code and will embrace the principles and recommendations of the King Report and
Code. The JSE has required the Company, as a condition of the Listing, to ensure that the Board
is constituted in order to comply with the corporate governance requirements of the Listings
Requirements and the King Report and Code, to the extent applicable. In this regard, the Board
has committed to, by no later than 48 hours before the Date of Listing, to appoint additional
directors and otherwise to comply with the other corporate governance requirements of the
Listings Requirements and the King Report and Code, to the extent applicable. The Company
has undertaken to make announcements on SENS and in the press in this regard. The new
Board, once constituted as discussed above, will, prior to the Listing, accept responsibility for the
Prospectus as required by the Listings Requirements.
TMG's existing articles of association are not compliant with schedule 10 of the Listings
Requirements. The JSE has conditionally approved the new Memorandum of Incorporation
('MOI') subject to the redemption of the Preference Shares and the removal of the provisions in
the MOI relating to the Preference Shares. The shareholder of TMG has passed the special
resolutions required to adopt the MOI and to remove the Preference Share terms, which will
come into effect following the implementation of the Scheme. To the extent that the existing
articles of association may conflict with or be contrary to the Listings Requirements, TMG has
undertaken to the JSE to comply with the Listings Requirements from the Date of Listing to the
date of registration of the new JSE approved MOI.
9. Copies of the Prospectus
The Prospectus is only available in English and copies thereof may be obtained during the normal
business hours from Wednesday, 18 July 2012 until Monday, 17 September 2012 from TMG's
registered office, Rand Merchant Bank (a division of FirstRand Bank Limited) and Computer
share Investor Services Proprietary Limited, at their respective offices, the addresses of which
appear below:
The registered office of TMG The office of Rand Merchant Bank
2nd Floor 15th Floor
11 Crescent Drive 1 Merchant Place
Melrose Arch Cnr Fredman Drive and Rivonia Road
Johannesburg, 2076 Sandton, 2196
The office of Computer Share Investor
Services Proprietary Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
Melrose Arch
18 July 2012
Financial advisor and lead debt arranger Legal advisor to the Company
to the Company Webber Wentzel
Rand Merchant Bank, a division of First
Rand Bank Limited
Promoter and Arranger Auditors and reporting accountants to the
Blackstar Group Proprietary Limited Company
PKF JHB Inc.
Sponsor to the Company Transfer Secretary
PSG Capital Computer Share Investor Services
Communication advisor to the company
Brunswick South Africa Limited
This abridged prospectus and pre-listing statement does not constitute an offer of securities for
sale in the United States. Securities may not be offered or sold in the United States absent
registration or an exemption from registration under the U.S. Securities Act of 1933, as amended
(the 'Securities Act'). The securities being offered have not and will not be registered under the
Securities Act. There will be no public offering in the United States.
The Share Consideration has not and will not be, registered under the US Securities Act, 1933 or
with the regulatory authority of any state or jurisdiction of the United States of America or under
the applicable laws of the United Kingdom, Canada, Australia or Japan and may not be offered,
sold, pledged or otherwise transferred in the United States of America or to any national, resident
or subject of the United Kingdom, Canada, Australia or Japan (unless they receive and accept the
offer in terms of the Scheme in South Africa). Neither this document nor any copy of it may be
sent to or taken into the United State of America, Canada, Australia or Japan.
If the offer to and/or receipt by an Avusa Shareholder of the Share Consideration would require
the Company to comply with filing and/or other regulatory obligations in the jurisdiction in which
such Avusa Shareholder is resident or has its registered address (including, but not limited to, the
United States of America, Canada, Australia and Japan) (a 'Cash-Only Shareholder'), it will be
deemed to have elected to receive the Cash Consideration. If, as a result of the number of Avusa
Shareholders who elect the Cash Consideration, the Cash Consideration is insufficient to settle
the Scheme Consideration due to Cash-Only Shareholders in full, any Share Consideration which
would otherwise be due to Cash-Only Shareholders will not be issued to such Cash-Only
Shareholders personally, but shall instead be retained by the Company or a third party in South
Africa nominated by the Company, which shall in each case hold such Share Consideration on
behalf of such Cash-Only Shareholders. The Company, or the third party to whom such Share
Consideration is issued, shall be obliged to dispose thereof as soon as practicable and to remit
the proceeds of such disposal (net of applicable fees, expenses, taxes and charges) to such
Cash-Only Shareholders, at such Cash-Only Shareholders' risk.
Date: 19/07/2012 07:05:00 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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