Confirmation of swap ratio relating to scheme of arrangement with New Bond Capital Ltd shareholders
New Bond Capital Limited
(Previously Mvelaphanda Group Limited)
Incorporated in the Republic of South Africa
Registration number: 1995/004153/06
Share code: NBC
(“New Bond Capital” or “NBC”)
Blackstar Group SE
(Previously Blackstar Group PLC)
(Registered in Malta with registration number SE 4)
(Registered as an external company with limited liability in the Republic of South Africa
under registration number 2011/008274/10)
Share code: BCK / BLCK
JOINT ANNOUNCEMENT OF THE ADJUSTED SWAP RATIO RELATING TO THE OFFER MADE BY BLACKSTAR TO
ACQUIRE THE ENTIRE ISSUED ORDINARY SHARE CAPITAL OF NEW BOND CAPITAL BY WAY OF A SCHEME
OF ARRANGEMENT (THE "SCHEME")
1.1. Shareholders of NBC (“NBC Shareholders”) are referred to the joint announcement
by NBC and Blackstar published on SENS on Monday, 4 March 2013 and in the
press on Friday, 8 March 2013 (“the Firm Intention Announcement”), advising of the
firm intention of Blackstar to make an offer for the acquisition by Blackstar, or one
of its wholly owned subsidiaries, of the entire issued ordinary share capital of NBC
(other than treasury shares held by subsidiaries of NBC and shares already held by
Blackstar in NBC) (the “Target Shares"), by way of a scheme of arrangement in
terms of section 114 of the Companies Act 71 of 2008, as amended (the
1.2. If implemented, the Scheme will result in those NBC Shareholders participating in
the Scheme receiving 1.12000 (one point twelve) newly issued ordinary shares in
Blackstar (“Blackstar Shares”) for every 100 (one hundred) Target Shares disposed
of in terms of the Scheme (“the Swap Ratio”), provided that any fraction of a
Blackstar Share which an NBC Shareholder (participating in the Scheme) becomes
entitled to will be rounded-off such that if it comprises 0.5 (zero point 5) or –
1.2.1. more of a Blackstar Share, it will be rounded upwards; and
1.2.2. less of a Blackstar Share, it will be rounded downwards
(“the Scheme Consideration”).
1.3. The mechanism for the calculation of the Swap Ratio is set out in more detail in
paragraph 4 of the Firm Intention Announcement.
1.4. The Scheme Consideration has been calculated with reference to the intrinsic net
asset value per ordinary share (“NAV”) of each of Blackstar and NBC as at
31 December 2012, less a 10% (ten percent) discount on each such NAV.
2. CALCULATION OF THE ADJUSTED SWAP RATIO
2.1. Further to paragraph 4.4 of the Firm Intention Announcement, in the event that the
NAV of either Blackstar or NBC had increased or decreased by more than 10% (ten
percent) as at the agreed date of 28 February 2013, from the NAV of either
Blackstar or NBC as at 31 December 2012, Blackstar and NBC would have
recalculated the Scheme Consideration by applying the methodology for the
calculation of the Swap Ratio set out in paragraph 4 of the Firm Intention
Announcement ("Adjusted Swap Ratio").
2.2. The NAV of Blackstar and NBC as at 28 February 2013 did not reflect an increase
or decrease by more than 10% from the NAV of either Blackstar or NBC as at 31
December 2012 and a recalculation of the Swap Ratio is not required and the
Adjusted Swap Ratio is therefore not applicable. Accordingly, the Swap Ratio
remains as set out in paragraph 1.2 above.
3. PRO FORMA FINANCIAL EFFECTS OF THE SCHEME
3.1. The table below sets out the unaudited pro forma financial effects of the Scheme for
a NBC Shareholder. The Blackstar financial information is based on the Blackstar
unaudited results for the six months ended 30 June 2012 which have been prepared
using accounting policies that comply with International Financial Reporting
Standards and that are consistent with those applied in the audited financial
statements of Blackstar for the year ended 31 December 2011. The NBC financial
information is based on the unaudited results of NBC for the six months ended 31
December 2012 which have been prepared in accordance with International
Financial Reporting Standards. The accounting for the acquisition of the Target
Shares by Blackstar is in accordance with International Financial Reporting
Standard 3: Business Combinations, being IFRS 3R (IFRS 3 as revised and re-
issued in January 2008 and amended in May 2010).
3.2. The preparation of unaudited pro forma financial information in respect of NBC is
the responsibility of the NBC directors and the unaudited pro forma financial
information in respect of Blackstar is the responsibility of the Blackstar directors.
This unaudited pro forma financial information is provided for illustrative purposes
only in order to provide information about how the Scheme may have affected NBC
Shareholders. Due to the nature of unaudited pro forma financial information, it may
not be a true reflection of the actual impact of the Scheme.
3.3. For the purposes of earnings and headline earnings per share, it was assumed that
the Scheme became operative on 1 January 2012 and for the purposes of net asset
value and net tangible asset value per share it was assumed that the Scheme
became operative on 30 June 2012. The unaudited pro forma financial effects are
presented in a manner consistent with the basis on which the historical financial
information of Blackstar has been prepared and in terms of Blackstar’s accounting
3.4. The pro forma financial effects on NBC Shareholders have been calculated in
respect of 100 (one hundred) NBC shares held before implementation of the
Scheme and 1.12000 Blackstar shares held after implementation of the Scheme.
before the after the
Scheme Scheme Change %
Notes and assumptions a) b)
Number of ordinary shares 100 1.12000
(Losses)/Earnings for number of ordinary shares
reflected above (cents)
Basic and diluted (losses)/earnings (34) 373 1,197
Basic and diluted headline (losses)/earnings (583) 470 181
Net asset value for number of ordinary shares reflected
above (cents) 1,548 1,981 28
Net tangible asset value for number of ordinary shares
reflected above (cents) 1,548 1,875 21
Notes and assumptions:
a) The financial information in the “NBC Shares before the Scheme” column is based on
financial information extracted, without adjustment, from NBC’s published interim
unaudited results for the six months ended 31 December 2012.
b) The financial information in the “Blackstar Shares after the Scheme” column is based
on financial information extracted from Blackstar’s interim unaudited results for the six
months ended 30 June 2012, adjusted for the following:
i. share-buy backs which took place in February 2013. A total of 5.9 million shares
were bought back at a cost of £4,670,000. The shares are held by Blackstar as
treasury shares. This adjustment will have a continuing effect on Blackstar’s
ii. the disposal of Blackstar’s services derivative investment in October 2012 for cash
proceeds of £9,727,000. The investment had a carrying value of £8,519,000 at 30
June 2012 and thus a profit of £1,208,000 has been recognised. Linked to this
investment was a loan receivable with a carrying value of £1,294,000 as at 30
June 2012. This loan was also settled in cash on disposal of the services
derivative investment. This adjustment will not have a continuing effect on
Blackstar’s financial result;
iii. the receipt of a capital distribution as a result of NBC unbundling TMG shares to
shareholders. Through its 28.3% shareholding in NBC, Blackstar received
14,692,305 ordinary shares in Times Media Group Limited (“TMG”) with a fair
value of £15,757,000 calculated based on the prevailing TMG share price and
exchange rate on the date of distribution being 25 September 2012. This
adjustment will not have a continuing effect on Blackstar’s financial result;
iv. the disposal of Blackstar’s shareholding in NBC (amounting to 28.3% of the issued
ordinary share capital of NBC) in November 2012. Cash proceeds of £23,639,000
(calculated based on actual proceeds of R332,682,000 translated at the prevailing
exchange rate of date of receipt). The investment in NBC (included in investments
at fair value through profit and loss) had a carrying value of £38,983,000 as at 30
June 2012 and the resulting loss on disposal of £15,344,000 is recognised. This
adjustment will not have a continuing effect on Blackstar’s financial result; and
v. effects of the Scheme, which includes, inter alia, once-off transaction costs of
R1,330,000 which have been set-off against share premium, acquiring 100%
interest in NBC and the issuing of a total of 5,831,934 Blackstar shares (currently
held by Blackstar as treasury shares) in settlement of the Scheme Consideration
(this adjustment will have a continuing effect on Blackstar’s financial results).
c) 520,708,365 NBC shares were in issue before the implementation of the Scheme and
82,020,356 Blackstar shares will be in issue (net of 68,066 treasury shares) after the
implementation of the Scheme.
4. AMENDMENT TO SCHEME CONDITIONS
4.1. The following Scheme condition precedent, as detailed in paragraph 6.1.1 of the
Firm Intention Announcement and repeated below for ease of reference, is for the
reasons stated below no longer applicable –
“the passing of all resolutions required to implement the Scheme by the requisite
majority of Blackstar Shareholders, which resolutions will include, inter alia, the
increase of Blackstar's authorised share capital and the authority to issue the
Scheme Consideration by Blackstar”.
4.2. Blackstar has, subsequent to the issue of the Firm Intention Announcement,
advised NBC in writing that it has sufficient ordinary shares in its capital to issue in
favour of scheme participants as Scheme Consideration, and that it does not
require any authority from the Blackstar ordinary shareholders to issue the Scheme
Consideration. Accordingly, the Scheme condition precedent that Blackstar
receives authority from Blackstar ordinary shareholders in order to increase its
share capital and/or issue the Scheme Consideration has become unnecessary.
4.3. As stated in paragraph 6.2 of the Firm Intention Announcement this Scheme
condition precedent cannot be waived.
4.4. Blackstar and NBC have accordingly agreed to dispense with this Scheme
5. FURTHER DOCUMENTATION AND SALIENT DATES
Further details of the Scheme will be included in a scheme circular, which is expected to
be posted to New Bond Capital Shareholders on or about 29 March 2013. The salient
dates in relation to the Scheme will be announced at the time of the issuing of the
aforementioned scheme circular.
6. NBC INDEPENDENT BOARD RESPONSIBILITY STATEMENT
The NBC independent board of directors accepts responsibility for the information
contained in this announcement which relates to NBC and confirms that, to the best of
its knowledge and belief, such information which relates to NBC is true and the
announcement does not omit anything likely to affect the importance of such information.
7. BLACKSTAR RESPONSIBILITY STATEMENT
The board of directors of Blackstar accepts responsibility for the information contained in
this announcement which relates to Blackstar and confirms that, to the best of its
knowledge and belief, such information which relates to Blackstar is true and the
announcement does not omit anything likely to affect the importance of such information.
Johannesburg & London
15 March 2013
Transaction advisor to New Bond Capital: PKF Corporate Finance (Pty) Ltd
Sponsor to New Bond Capital: PSG Capital (Pty) Ltd
Legal advisor to New Bond Capital: Cliffe Dekker Hofmeyr Inc.
Sponsor to Blackstar: PSG Capital (Pty) Ltd
Nomad to Blackstar: Liberum Capital Limited
Legal advisors to Blackstar: Paul Hastings (Europe) LLP
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