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Updated detailed cautionary announcement
M&S Holdings Limited
Incorporated in the Republic of South Africa
(Registration Number 2006/011359/06)
Share Code: MSA ISIN: ZAE000165411
(“M&S” or “the Company”)
UPDATED DETAILED CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
1.1 Shareholders are referred to the cautionary announcement released by
the Company on 29 May 2013, wherein shareholders were advised that
the Company had entered into discussions, which if successful could
have an impact on the Company’s share price.
1.2 In expansion of the aforesaid cautionary announcement, the Company
hereby advises shareholders that it is at an advanced stage of
finalising formal agreement (s) with BDM Holdings (Pty) Ltd (“BDM”)
regarding a proposed transaction in terms whereof the Company will
acquire BDM and its subsidiaries (“the BDM Group”). The Company and
BDM have concluded a binding heads of agreement setting out the
salient terms of the proposed transaction which will effectively
result in a merger of the two businesses (“the Transaction”).
1.3 The heads of agreement is conditional upon the parties concluding
formal agreement(s), regulating the Transaction and obtaining all
regulatory approvals as may be required for implementation of the
Transaction, including but not limited to the approval of the JSE
Limited (“JSE”) and competition approval.
1.4 The formal agreement(s), if successfully concluded, may contain
further conditions precedent in relation to the implementation of the
Transaction.
2. BUSINESS OF THE BDM GROUP
BDM Group provides outsourced personnel, industrial and mining
services and contract catering and food services to mines, industrial
and manufacturing sites, transport businesses, retail outlets,
hospitals, schools and various other clients.
The personnel services include the provision of temporary outsourced
personnel, permanent placements, time keeping and payroll services
and human resource and industrial relations services.
The industrial and mining services include plant cleaning, factory,
industrial site and office cleaning, equipment hire, mining
construction and engineering services, remote site accommodation
(village) construction and operation and management services.
The contract catering and food services include managing staff
canteens, supplying meals to students, patients in hospitals,
corporate head offices, mines and construction sites.
3. RATIONALE FOR THE TRANSACTION
The Transaction will result in a more substantial business, which is
expected to facilitate the accelerated growth of the combined group.
Synergies which are expected to be captured include cross-selling of
services to the larger client base, the leveraging of expertise
across the combined group as well as capitalising on potential cost
synergies.
Should the Transaction be implemented, it is intended that the name
of the Company will change to a name that appropriately reflects the
combined group, subject to obtaining the requisite shareholder
approval for such change of name, and it is intended to apply, in due
course, to the JSE for approval to move the listing of the Company to
the main board.
4. CONSIDERATION
It is anticipated that should the conditions precedent of the heads
of agreement and of the formal agreement(s) (if successfully
concluded) be fulfilled and the Transaction be implemented, the
purchase price payable by the Company for the acquisition of the BDM
Group will be settled by issuing shares in the Company to the
relevant shareholders of the BDM Group. The purchase price will be
calculated a “like-for-like” earnings basis using the consolidated
group results for the BDM Group as at 28 February 2013 and the
consolidated group results of M&S for the year ended 30 June 2013.
Further details regarding the purchase price will be released in due
course.
5. CAUTIONARY ANNOUNCEMENT REMAINS OF FULL FORCE AND EFFECT
Shareholders are advised to continue exercising caution when trading
in their M&S shares until a further more detailed announcement is
made by the Company regarding the Transaction, including the pro
forma financial effects of the proposed Transaction on the financial
position of the Company.
21 June 2013
Johannesburg
Designated Adviser: Sasfin Capital (a division of Sasfin Bank Limited)
Transaction and corporate adviser: PSG Capital
Date: 21/06/2013 01:03:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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