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TIMES MEDIA GROUP LIMITED - Disposal Of Interest In I-Net Bridge Proprietary Limited

Release Date: 08/08/2013 08:30
Code(s): TMG     PDF:  
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Disposal Of Interest In I-Net Bridge Proprietary Limited

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
Ordinary share ISIN: ZAE 000169272
(“the Company”)

DISPOSAL OF INTEREST IN I-NET BRIDGE PROPRIETARY LIMITED

1.   DISPOSAL OF 100% INTEREST IN I-NET BRIDGE PROPRIETARY LIMITED

     Shareholders are advised that the Company, through its wholly-
     owned subsidiaries Avusa Media Proprietary Limited, BDFM
     Publishers Proprietary Limited and Library Network Proprietary
     Limited (individually referred to as “the Seller” and
     collectively referred to as “Times Media”), has entered into
     an agreement (“the Sale Agreement”) with McGregor BFA
     Proprietary Limited (“the Purchaser”), in terms of which Times
     Media has disposed of its 100% shareholding in and all claims
     of whatsoever nature against I-Net Bridge Proprietary Limited
     (“I-Net”) to the Purchaser for a total purchase consideration
     of R115 000 000 (“the I-Net Disposal”).

2.   THE BUSINESS OF I-NET AND THE RATIONALE FOR THE I-NET DISPOSAL

     I-Net provides a wide range of investment products comprising
     real-time and historical market data, packaged with breaking
     news and powerful analytical tools, allowing investors to make
     informed decisions.

     I-Net’s future prospects are dependent on being able to
     compete in a relatively small, proprietary market with major
     international players. I-Net further requires investment and a
     global presence to help retain a competitive offering and
     improve its prospects for sustainable growth. Times Media is
     of the view that the Purchaser is better placed to position I-
     Net to achieve the aforegoing.

3.   DETAILS OF THE I-NET DISPOSAL

3.1. Purchase Consideration

3.1.1.    Times Media will dispose of its 100% shareholding in and
          all claims of whatsoever nature against I-Net to the
          Purchaser for an aggregate purchase consideration of
          R115 000 000; plus or minus;
3.1.2.    the face value of any surplus cash reserves or deficit
          (“the Surplus Cash Reserves/Deficit”), as at June 30,
          2013 of the I-Net Disposal; and
3.1.3.    the purchase consideration shall, in addition, increase
          by up to R10 million in the event of I-Net recovering,
          within a period of 12 months after the Closing Date,
          between 10% and 100% or more of the net income which it
          lost by reason of the changes to the shareholding data
          provided by STRATE to I-Net, which were implemented on 3
          June 2013.

3.2. Use of Purchase Consideration

     The proceeds of the I-Net Disposal will be used to reduce
     gearing and for potential future acquisitions more aligned to
     the Company’s core business.

3.3. Effective Date

     The effective date of the I-Net Disposal is the last day on
     which the suspensive conditions (set out in 3.4 below) or
     November 30, being the last day on which the suspensive
     conditions are capable of fulfilment or waiver (or such other
     date as the Purchaser and Times Media may agree in writing
     from time to time).

3.4. Suspensive conditions

     The I-Net Disposal is subject to the fulfilment of the
     following outstanding suspensive conditions:

3.4.1.    the competition authorities approving the I-Net Disposal,
          conditionally or unconditionally;

3.4.2.    each Seller and the Company entering into a restraint of
          trade agreement in favour of the Purchaser and I-Net on
          terms agreed between the Seller and I-Net and approved by
          the Purchaser;

3.4.3.    the landlord of the leased premises which I-Net leases
          and where it conducts its business, entering into a new
          lease agreement with Times Media for a portion of the
          premises not occupied by I-Net; and


3.4.4.    each Seller waiving in writing any and all rights of pre-
          emption that it may have in respect of the sale shares
          and delivering the written waivers to the Purchaser in
          respect of the sale of the sale shares.

4.   FINANCIAL EFFECTS OF THE I-NET DISPOSAL

     The pro forma financial effects of the I-Net Disposal are
     presented for illustrative purposes only and because of their
     nature may not give a fair reflection of the Company’s
     financial position nor of the effect on future earnings after
     the I-Net Disposal. Set out below are the unaudited pro forma
     financial effects of the I-Net Disposal, based on the
     unaudited interim results for the period ended 31 December
     2013. The directors of the Company are responsible for the
     preparation of the unaudited pro forma financial information.

                         Reviewed      Unaudited Pro   Change (%)
                       before the I-    Forma after
                       Net Disposal      the I-Net
                          (cents)         Disposal
                                          (cents)
     Basic                 (17)             (16)           6%
     earnings/(loss)
     per share
     Basic headline         28                27         (4%)
     earnings    per
     share
     Net asset value       891             951             7%
     per share
     Net    tangible       179             248            39%
     asset value per
     share

     Notes and assumptions:
     1.   The basic earnings/(loss) per share and basic headline
          earnings per share figures in the “Pro Forma after the I-
          Net Disposal” column have been calculated on the basis
          that the Disposal was effected on 1 July 2012.
     2.   The net asset value per share and net tangible asset
          value per share figures in the “Pro forma after the I-Net
          disposal” column have been calculated on the basis that
          the I-Net Disposal was effected on 31 December 2012.
     3.   The total proceeds for the I-Net Disposal is assumed to
          be R115 million and the proceeds after transaction costs
          of R1.15 million are assumed to be used for the reduction
          of borrowings. Financing costs saved on borrowings were
          calculated based on an interest rate of 8.325% per annum.
     4.    The taxation rate applicable is assumed to be 28%.
     5.   The basic earnings/(loss) per share and basic headline
          earnings per share figures are calculated based on
          weighted average number of shares in issue of 155 395 129
          at 31 December 2012.
     6.   The net asset value per share and net tangible asset
          value per share have been calculated based on 127 077 145
          shares in issue at 31 December 2012.
     7.   All adjustments, with the exception of transaction costs,
          are expected to have a continuing effect.

5.   WARRANTIES AND MATERIAL TERMS

     The I-Net Disposal is subject to warranties that are normal
     for a transaction of this nature.

6.   I-NET DISPOSAL CATEGORISATION

     In terms of section 9 the Listings Requirements of the JSE
     Limited, the I-Net Disposal is categorised as a category 2
     transaction.

By order of the board

8 August 2013
Johannesburg

Sponsor
PSG Capital Proprietary Limited

Legal advisor to TMG
Fasken

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