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Announcement of a firm intention to make a cash offer to acquire all the issued shares in Muvoni Technology Group
Muvoni Technology Group Limited
(formerly known as “Ideco Group Limited”)
Incorporated in the Republic of South Africa
Registration number 2001/023463/06
Share code: MTG
ISIN code: ZAE000167268
("Muvoni” or the “Company")
ANNOUNCEMENT OF A FIRM INTENTION TO MAKE A CASH OFFER TO ACQUIRE
ALL THE ISSUED SHARES IN MUVONI TECHNOLOGY GROUP LIMITED, SAVE FOR
THE SHARES HELD BY THE EXCLUDED SHAREHOLDERS (DEFINED BELOW)
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
1.1. Muvoni is pleased to announce (the “Firm Intention Announcement”)
that it has received written notice of a firm intention to make an offer
(the “Firm Intention to make an Offer Letter”) from Horizon Investments
& Financial Services (Pty) Ltd, a private company incorporated in South
Africa under registration number 2002/008259/07 (the party making
the offer to be hereinafter referred to as the "Offeror" or "Horizon") to
acquire (the “Horizon Offer”), subject to the applicable terms and
conditions referred to in this Firm Intention Announcement, all the
issued ordinary shares in the capital of Muvoni Technology Group
Limited (“Muvoni”) save for the Muvoni shares held by Muvoni
Investment Holdings (Pty) Ltd (“MIH”), Vhonani Mufamadi (“Vhonani”)
and ZNG Technologies AG (“ZNG”)(collectively the “Excluded
Shareholders”).
1.2. This Firm Intention Announcement is made pursuant to Regulation 101
of the Takeover Regulations (the “Takeover Regulations”) issued in
terms of section 120 of the Companies Act, 2008, as amended (the
“Companies Act”).
2. The Horizon Offer
2.1. The purpose of the Horizon Offer to the shareholders of Muvoni is to
enable the Offeror to acquire, subject to the applicable terms and
conditions as set out in this Firm Intention Announcement, all the issued
ordinary shares in the capital of Muvoni (‘’Muvoni Shares”), save for the
Muvoni Shares held by the Excluded Shareholders (collectively the
“Excluded Shares”). The Horizon Offer will, subject to paragraph 14, be
implemented by way of a scheme of arrangement (the “Scheme”)
between Muvoni and its shareholders registered as such on the scheme
record date (to be published in due course, as envisaged in paragraph
13), other than the Excluded Shareholders, in terms of section 114 of the
Companies Act (read with section 115 of the Companies Act) (all
inclusive “the Transaction”). The Muvoni Shares held by the Excluded
Shareholders will not form part of the Scheme.
2.2. The authorized and issued capital of Muvoni comprises ordinary shares
and Muvoni does not have any other class of shares in its authorized or
issued capital.
2.3. The Muvoni Shares that will form part of the Scheme (being all the
Muvoni Shares other than the Excluded Shares) are referred to as the
“Scheme Shares”.
2.4. The implementation of the Scheme will result in the de-listing of
Muvoni from the Alt-X board (“the De-listing”) of the securities exchange
owned and operated by JSE Limited (“JSE”). The intention is to convert
Muvoni to a private company (subject to the provisions of the
Companies Act) subsequent to the implementation of the De-listing.
3. Scheme consideration for the Horizon Offer
3.1. The offer price is 20 cents per Scheme Share and is payable in cash. It
represents a:
3.1.1. 55% premium to the 9 cents closing price of a Muvoni Share on 12
April 2013;
3.1.2. 20% premium to the 30 day volume weighted average closing price of
16 cents per Muvoni Share;
3.1.3. 35% premium to the 60 day volume weighted average closing price of
13 cents a Muvoni Share;
3.1.4. 65% premium to the 90 day volume weighted average closing price of
7 cents a Muvoni Share;
3.1.5. 65% premium to the 120 day volume weighted average closing price
of 7 cents a Muvoni Share; and
3.1.6. 60% premium to the 180 day volume weighted average closing price
of 8 cents a Muvoni Share.
3.2. The Horizon Offer thus provides Muvoni shareholders (other than the
Excluded Shareholders) with a cash exit opportunity at an attractive
premium to the current and historical market prices of the Muvoni
Shares.
4. Information regarding Horizon
Horizon is a private property investment company, established in 2002
by its sole shareholder the Keating Family Trust IT 6771/00. Mr Keith
Warren Keating is the only director of Horizon.
5. Terms of the Horizon Offer
The Horizon Offer is made on the following basis:
5.1. the Offeror will pay 20 cents cash for each Scheme Share (“Scheme
Consideration”) on the implementation date of the Scheme
(“Implementation Date”). Payment of the Scheme Consideration will
be administered by Muvoni;
5.2. the Scheme Consideration was determined on the basis that Muvoni will
not make any distributions (as defined in the Companies Act) between
the date of signature of the Firm Intention to make an Offer Letter by the
last party signing, being 15 April 2013, (the “Initial Date”) and the
Implementation Date. The Muvoni board does not intend to declare a
dividend or make any other distribution to Muvoni shareholders
between the Initial Date and the Implementation Date. Should Muvoni
declare or pay any dividend or make any other distribution to its
shareholders (“Excess Payment”), then the Scheme Consideration will
be reduced by an amount equal to such Excess Payment(s), and further
decreased by any amount for which Muvoni or any subsidiary of Muvoni
is itself liable by way of taxes on such payment(s) (that is, excluding any
obligation on Muvoni or any of its subsidiaries to withhold any amount
payable by any Muvoni shareholder).
6. The Muvoni shareholder base after the implementation of the
Transaction
Following implementation of the Scheme, the shareholders of Muvoni
will be:
6.1. Horizon 31 153 348 shares (15,41%);
6.2. MIH 83 762 634 shares (41,42%);
6.3. ZNG 81 069 856 shares (40,09%); and
6.4. Vhonani 31 153 348 shares (3,08%)
7. Funding
7.1. Horizon will provide the funding for the Scheme.
7.2. Rand Merchant Bank has provided the Takeover Regulation Panel,
established by section 196 of the Companies Act ("Takeover Regulation
Panel"), with an irrevocable bank guarantee as contemplated in
Regulations 111(4) and 111(5) of the Takeover Regulations, read with
the guidelines issued by the Takeover Regulation Panel in terms of
section 201(2)(b) of the Companies Act.
8. Shareholder support
Horizon has obtained irrevocable undertakings from Coronation Fund
Managers, Mr CJ Viljoen and Mr WI RautenBach in terms of which,
amongst other things, they have undertaken to vote in favour of the
Scheme and all related resolutions on the condition that a fair and
reasonable opinion is obtained as provided for in paragraph 10.1.1
below. These shareholders hold, in aggregate, 30% of the Muvoni Shares
which Horizon believe to be eligible to vote at the shareholders meeting
which will be convened in relation to the Scheme (on a date to be
published in due course, as envisaged in paragraph 13).
9. Merger notification
To the extent that the parties meet the asset and turnover thresholds
prescribed for a notifiable merger in terms of the Competition Act, 1998,
then the Transaction will be subject to the approval by the South African
competition authorities, as envisaged in paragraph 10.2.2.
10. Pre-conditions and Suspensive conditions to the Scheme
10.1. The Horizon Offer (and thus the posting of the circular to Muvoni
shareholders in relation to the Scheme) is subject to the fulfillment or, to
the extent possible in law, the written waiver (in whole or in part) by the
Offeror of the following pre-conditions precedent, at the cost of Muvoni,
within the period permitted by regulation-
10.1.1. the receipt by Muvoni of a “fair and reasonable” opinion in relation to
the Scheme from an independent expert appointed by the
independent board of Muvoni, and such opinion confirming to
Muvoni’s independent board and Muvoni shareholders that the
Scheme Consideration is fair and reasonable;
10.1.2. the independent board of Muvoni proposing the Scheme and
recommending that Muvoni’s shareholders vote in favour of the
Scheme; and
10.1.3. the eligible directors of Muvoni who are also direct or indirect
shareholders of Muvoni agreeing to vote in favour of the Scheme in
respect of the Muvoni Shares under their direct and indirect control.
10.2. The Scheme will be subject to the fulfillment or, to the extent
permissible in law, the written waiver by the Offeror (in whole or in
part) of the following suspensive conditions, at the cost of Muvoni, by no
later than 30 June 2013, or such later date as Horizon and Muvoni may
agree (subject to a corresponding extension of the cash confirmation
referred to in paragraph 7.2) –
10.2.1. the Offeror obtaining such approval of the Financial Surveillance
Department of the South African Reserve Bank or its authorised
agents in terms of the South African exchange control regulations
promulgated under the Currency and Exchanges Act, 1933 and in
accordance with the requirements of those regulations and
accompanying directives and rulings, as may be necessary or
reasonably advisable in order to implement the Transaction; either -
10.2.1.1. on an unconditional basis; or
10.2.1.2. subject to conditions as may be imposed by the authorities
referred to in clause 10.2.1 above, and the person on whom such
conditions are imposed has approved such conditions;
10.2.2. to the extend required, the Transaction being –
10.2.2.1. unconditionally approved by the South African Competition
Commission and/or Competition Tribunal, as the case may be; or
10.2.2.2. approved by the South African Competition Commission and/or the
Competition Tribunal, subject to conditions and the person on whom
such conditions are imposed approves such conditions and
undertakes in writing to comply therewith;
10.2.2.3. approved by the JSE, either unconditionally or subject to such
conditions as the person on whom such conditions are imposed may
approve;
10.2.3. the Scheme being proposed at the shareholders meeting convened to
consider the Scheme (the "Scheme Meeting") and approved in
accordance with its terms by a special resolution of the Muvoni
shareholders entitled to vote at the Scheme Meeting (the "Special
Resolution"), at which sufficient shareholders are present in person
or by proxy to exercise in aggregate at least 25% (twenty-five
percent) of all the voting rights that are entitled to be exercised on the
Special Resolution, as required by section 115(2) (a) read with
section 115(4) of the Companies Act;
10.2.4. if the provisions of section 115(2) (c) of the Companies Act apply -
10.2.4.1. the Scheme being approved by the court unconditionally, or subject to
conditions and the person on whom such conditions are imposed
approves such conditions and undertakes in writing to comply
therewith; and
10.2.4.2. if applicable, Muvoni not treating the Special Resolution as a nullity
in terms of section 115(5) (b) of the Companies Act;
10.2.5. within the period prescribed by section 164(7) of the Companies Act,
no valid demands having been received by Muvoni in terms of that
section read with section 115(8) of the Companies Act which in
aggregate represent more than 5% of the issued Muvoni Shares as at
the date of the Scheme Meeting;
10.2.6. the securing of any third party consents which may be required by
Muvoni, arising from contractual obligations which become
applicable in the event of a change of control of Muvoni, including the
consent of Muvoni`s bankers and relevant licensors, lessors and
suppliers;
10.2.7. no material breach of a warranty or representation in paragraph 11
coming to the attention of the Offeror before the issue by the
Takeover Regulation Panel of the compliance certificate referred to in
10.2.12, where materiality is defined as a divergence of 15% from
warranted information;
10.2.8. the Excluded Shareholders provide (i) binding written
acknowledgement that they will not participate in the Horizon Offer
(i.e. that they are excluded from the Horizon Offer) and (ii) binding
writing undertaking that they will support the Horizon Offer process
so as to enable regulatory compliance and the implementation of the
Transaction (all inclusive the “Agreements”);
10.2.9. to the extent applicable, the Takeover Regulation Panel exempting the
Offeror and the Horizon Offer from the requirements of Part B and
Part C of Chapter 5 of the Companies Act and the Takeover
Regulations to the extent required in terms of the Agreements
referred to in paragraph 10.2.8 above between Horizon and the
Excluded Shareholders.
10.2.10. the Muvoni Board will in the alternative to the Scheme propose a
resolution to De-list as provided for in terms of paragraphs 1.13 to
1.15 of the JSE Listings Requirements in the Scheme Circular to
Muvoni Shareholders as contemplated in 14 (a “De-listing in terms of
paragraphs 1.13 to 1.15 of the JSE Listings Requirements”);
10.2.11. The Offeror may not make any claim or institute any proceedings of
any kind in respect of any claim for breach of the aforementioned
warranties and representations after the period which shall expire
two months after the Implementation Date. The maximum aggregate
liability of Muvoni for all claims which may be made against it under
the aforementioned warranties and representations or at law, shall be
limited to R250 000 in aggregate, so that Muvoni shall not be liable
for any amount above R250 000;
10.2.12. the issue by the Takeover Regulation Panel of a compliance certificate
in relation to the Transaction as required by section 115(1)(b) read
with section 119(4) (b) and section 121(b) of the Companies Act; and
10.2.13. to the extent required, compliance with section 44 of the Companies
Act, approving the provision by Muvoni of financial assistance, by way
of the giving of the warranties and representations to the Offeror, as
envisaged in paragraph 11 below, and the payment of all the costs of
and incidental to the Scheme, for the purpose of, or in connection
with, the acquisition of Scheme Shares by the Offeror.
11. Warranties and representations
Muvoni has represented and warranted in favour of the Offeror, that on
the Initial Date and at all times from the Initial Date to the date on which
the Transaction fails or is implemented, as the case may be –
11.1. the 2012 annual report of Muvoni, for Muvoni`s financial year ended 31
August 2012, was certified without qualification by Muvoni’s auditors
and prepared –
11.1.1. in accordance with generally accepted and sound accounting
practices;
11.1.2. in a manner such as to fairly and accurately present the state of
affairs, operations and results of Muvoni and its subsidiaries as at the
date thereof and for the period to which it relates;
11.1.3. in accordance with the provisions of the Companies Act;
11.1.4. unless inconsistent with 11.1.1, on the same basis and applying the
same criteria as applied in the preparation of the audited financial
statements of Muvoni during previous years,
and reflects all liabilities at that date and since then no other liabilities,
whether actual or contingent, have arisen other than in the ordinary
course of conduct of the business of Muvoni and its subsidiaries;
11.2. no one has or will acquire any rights (of any nature whatsoever) to
obtain from Muvoni or any of its subsidiaries any shares (of any
description) or any convertible instruments (of any description) and/or
loan capital of Muvoni or any of Muvoni`s subsidiaries;
11.3. neither Muvoni nor any of its subsidiaries is or will be under any
obligation (whether contingent or otherwise) to issue any shares (of any
description) or any convertible instruments (of any description) to any
person and no person will acquire any such shares or instruments;
11.4. the issued and authorised shares of Muvoni and each of its subsidiaries
is and will be as reflected in the 2012 annual report of Muvoni;
11.5. no dividend will be declared or paid and no other distribution of any
kind will be made to Muvoni`s shareholders;
11.6. without the prior written consent of the Offeror neither Muvoni nor any
of its subsidiaries will –
11.6.1. dispose of any of its assets other than in the ordinary course of
business; or
11.6.2. dispose of any of their assets, the value of which exceed R7.5 million;
11.7. all agreements entered into by Muvoni and by Muvoni`s subsidiaries
have been entered into in the ordinary course of their businesses;
11.8. neither Muvoni nor any of its subsidiaries will -
11.8.1. take any steps to initiate a buy-back of any of its shares from any of its
shareholders; or
11.8.2. buy back any of its shares (including, without limitation, any treasury
shares) from any of its shareholders;
11.9. neither Muvoni nor any of its subsidiaries will enter into any agreements
or incur any liabilities or obligations outside the ordinary and normal
course of conduct of their business;
11.10. neither Muvoni nor any of its subsidiaries will commit itself to or
implement any capital expenditure in excess of R 10 million; and
11.11. the business of Muvoni will be conducted in the ordinary course and no
extraordinary investments will be made by Muvoni.
In terms of the Firm Intention to make an Offer Letter the Offeror may
not make any claim or institute any proceedings of any kind in respect of
any claim for breach of the aforementioned warranties and
representations after the period which shall expire two months after the
Implementation Date. The maximum aggregate liability of Muvoni for all
claims which may be made against it under the aforementioned
warranties and representations or at law, shall be limited to R250 000 in
aggregate, so that Muvoni shall not be liable for any amount above R250
000.
12. Concert parties
12.1. MIH and Vhonani approached the Offeror with a request to facilitate the
De-listing of Muvoni from the JSE. The Takeover Regulations Panel has
expressed the view that in doing so the Excluded Shareholders have
come into concert with Horizon and MIH and Vhonani have therefore
made declarations in the required form to Muvoni and the Takeover
Regulation Panel, as required by Regulation 84(5) of the Takeover
Regulations.
12.2. The beneficial interests of the Excluded Shareholders in Muvoni are as
follows-
12.2.1. MIH 83 762 634 shares (41.42%);
12.2.2. ZNG 81 069 856 shares (40.09%); and
12.2.3. Vhonani 6 236 384 shares (3.08%).
12.3. In terms of section 115(4) and 115(4A) of the Companies Act, the Muvoni
Shares held by the Excluded Shareholders will not be included in
calculating the percentage of the voting rights required to be present, or
actually present, in determining whether the applicable quorum
requirements for the Scheme Meeting is satisfied, or required to be
voted in support of a resolution, or actually voted in support of a
resolution relating to the Scheme.
12.4. If the Horizon Offer is proposed as an offer in terms of paragraph 1.14(c)
of the JSE Listings Requirements, in terms of section 1.15 of the JSE
Listings Requirements the shares held by the Excluded Shareholders
shall not be taken into account for the purposes of determining
acceptances required by the relevant sections of the JSE Listings
Requirements for a De-listing in terms of paragraph 1.13. to 1.15 of the
JSE Listings Requirements.
13. Anticipated key dates for the Scheme
Assuming that the provisions of section 115(3) of the Companies Act do
not become applicable, we envisage the following key dates (which may
be subject to change) in regard to the Scheme, namely-
13.1. the date of the announcement of the Transaction on SENS in terms of
Regulation 101 of the Takeover Regulations is anticipated to be within
one business day from the Initial Date and the date of the announcement
in the English press is anticipated to be within two business days of the
Initial Date, and the date of the announcement in the Afrikaans press (if
required by the Take-over Regulations) is anticipated to be within three
business days of the Initial Date;
13.2. the circular is expected to be issued to Muvoni shareholders on or about
the date which falls 20 business days after the publication of the
announcement of the Transaction;
13.3. the salient dates in relation to the Scheme will be published prior to the
posting of the circular and will be contained in the circular to
shareholders relating to the Scheme.
14. A de-listing in terms of the JSE Limited Listings Requirements
14.1. The Muvoni Board may in the alternative to the Scheme propose a
resolution to de-list in terms of paragraphs 1.13 to 1.15 of the JSE
Listings Requirements.
14.2. The resolution to de-list in terms of paragraphs 1.13 to 1.15 of the JSE
Listings Requirements is proposed should the required 75% level of
shareholder support as envisaged in paragraph 10.2.3 above not be
obtained.
14.3. A 50% vote in favour of a resolution to de-list is required from
shareholders other than the Excluded Shareholders voting in a Muvoni
shareholder meeting in person or by way of proxy in terms of paragraph
1.15 of the JSE Listings Requirements.
14.4. In the circumstances the Horizon Offer will therefore in the alternative be
proposed as an offer in terms of paragraph 1.14 (c) of the JSE Listings
Requirements on, mutatis mutandis, the same terms and conditions as
are contained in this Firm Intention Announcement.
15. Muvoni undertakings
Muvoni has consented to the Offeror proceeding as proposed and has
irrevocably undertakes in favour of the Offeror –
15.1. to comply timeously with all Muvoni’s obligations under the Companies
Act and the Takeover Regulations and other applicable laws in relation
to the Horizon Offer, including –
15.1.1. issuing the required circular/s to Muvoni shareholders;
15.1.2. issuing the required announcements;
15.1.3. convening the required shareholders meeting/s, including the Scheme
Meeting; and
15.1.4. doing all such things as may be required by or in relation to the terms of
the Scheme or general offer envisaged in paragraph 14, as the case
may be, to enable the successful implementation of the Transaction,
or as may otherwise be reasonably requested by the Offeror.
16. De-listing of Muvoni
Following the implementation of the Transaction, application will be
made by the Offeror to the JSE to terminate the listing of the Muvoni
Shares on the JSE.
17. Shareholding in Muvoni and acting as principal
Horizon currently owns no shares in Muvoni. Neither the Offeror nor
any of its directors currently holds or controls any options to acquire
any Muvoni Shares. The Offeror will be the ultimate purchaser of the
Muvoni Shares, other than the Excluded Shares and it is, subject to what
is stated in paragraph 12, acting alone and not in conjunction with, or as
agent or broker, for any other party.
18. Recommendation and fairness opinion
18.1. The Independent Board intends, based on the information currently
available to it, to make a unanimous recommendation to Muvoni
Shareholders to vote in favour of the resolutions to be proposed at the
shareholders meeting/s (including the Scheme Meeting) to approve the
Scheme, provided that the Independent Board receives an opinion from
the independent expert who is to be appointed by the Independent
Board, to the effect that the Scheme Consideration is fair and reasonable.
18.2. The substance of the external advice and the views of the Independent
Board will be detailed in the circular to be sent to Muvoni shareholders
in relation to the Scheme.
19. Documentation
Further details of the Scheme will be included in the Circular to be sent
to Muvoni Shareholders, containing, inter alia, a notice of the meeting/s
of Muvoni Shareholders, a form of proxy and a form of surrender and
transfer. The Circular is expected to be posted to Muvoni Shareholders
on or about 10 May 2013 The salient dates in relation to the Scheme
will be published prior to the posting of the Circular and will be
contained in the Circular.
20. Withdrawal of cautionary announcement
Following the release of this Firm Intention Announcement, the
cautionary announcement originally published by Muvoni on or about
28 March 2013 is hereby withdrawn and caution is no longer required
to be exercised by Muvoni shareholders when dealing in Muvoni Shares.
21. Responsibility statement
The Independent Board and the Offeror accepts responsibility for the
information contained in this Firm Intention Announcement. To the best
of its respective knowledge and belief, the information contained in this
Firm Intention Announcement is true and nothing has been omitted
which is likely to affect the import of the information contained herein.
Rosebank
15 April 2013
Transactional Designated Advisor to Muvoni: PSG Capital
Legal advisor to Muvoni: ENS
Corporate Advisor to Muvoni: DEA-RU
Date: 15/04/2013 04:10:00 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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