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Declaration and Finalisation Relating to the Proposed Unbundling by Seardel of Shares in Deneb Investments Ltd
SEARDEL INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1968/011249/06)
Share code: SER ISIN Code: ZAE000029815
Share code: SRN ISIN Code: ZAE000030144
(“Seardel” or “the Company” or “the Group”)
DECLARATION AND FINALISATION ANNOUNCEMENT RELATING TO THE
PROPOSED UNBUNDLING BY SEARDEL OF 557 892 317 SHARES IN DENEB
INVESTMENTS LIMITED (“Deneb”) TO ITS SHAREHOLDERS
1. Introduction
Shareholders are referred to the SENS announcement of 28
August 2014, wherein shareholders were advised of the
intention of Seardel to unbundle its non-media assets,
through its interest in Deneb to its shareholders and to
list Deneb as a separate entity on the JSE Limited
(“Unbundling”).
Shareholders are advised that the board of directors of
Seardel has resolved to proceed with the Unbundling and to
unbundle 557 892 317 shares in Deneb, which equates to
100% of the issued share capital of Deneb (“Deneb Shares”)
to its ordinary and N-class ordinary shareholders, in
terms of section 46 of the Companies Act No 71 of 2008 and
section 46 of the Income Tax Act No 58 of 1962 (“Income
Tax Act”).
2. Rationale for the Unbundling
Seardel has taken a strategic decision to be a focussed
media investment company allowing it to concentrate its
resources on growing Seardel’s media businesses while
providing Seardel shareholders direct access to the
underlying media investments.
The listing and Unbundling of Deneb will have the
following positive outcomes:
• it will provide Seardel shareholders with the
flexibility to maintain, increase or decrease their
investments in Seardel’s media and non-media assets,
based on their specific investments preferences;
• it will enable Deneb to develop a shareholder base
that has an appetite for the non-media assets of
Seardel, being property, branded products and
manufacturing assets;
• Deneb management will be allowed to pursue a focused
strategy without having to consider the impact on
Seardel’s media business; and
• the management of Deneb can be appropriately
incentivised given the characteristics of its
industry.
3. Details of the Unbundling ratio
Seardel will unbundle the Deneb Shares to its ordinary and
N-class ordinary shareholders by way of a dividend-in-
specie in the ratio of 12.91952 (twelve comma nine one
nine five two) Deneb Shares for every 100 shares held in
Seardel on Friday, 5 December 2014 (“Unbundling Record
Date”), rounded to the nearest whole number.
4. Tax consequences
The summary below represents general comments and is not
intended to constitute a complete analysis of the taxation
consequences of the unbundling provisions for shareholders
in terms of South African taxation law. It is not intended
to be, nor should be considered as legal or taxation
advice. Seardel, its directors, employees or advisors
cannot be held responsible for the taxation consequences
of the Unbundling and therefore shareholders are advised
to consult their own tax advisors in this regard.
The Unbundling will be implemented in terms of section 46
of the Income Tax Act and will have the following tax
consequences for the shareholders of Seardel:
The distribution of the Deneb Shares to ordinary and N-
class ordinary shareholders of Seardel in terms of the
Unbundling must be disregarded in determining any
liability for dividends tax and will qualify for an
exemption from Securities Transfer Tax.
Seardel shares held as trading stock:
Any Seardel shareholder holding Seardel shares as trading
stock will be deemed to acquire the unbundled Deneb Shares
as trading stock. The combined expenditure of such Seardel
and Deneb shares will be the amount taken into account by
the shareholder in respect of those Seardel shares for the
purposes of section 11(a), section 22(1), or section 22(2)
of the Income Tax Act. The portion of the above combined
expenditure to be allocated to the unbundled Deneb Shares,
will be determined by applying the ratio that the market
value of the Deneb Shares, as at the end of the day after
the Unbundling, being Monday, 1 December 2014, bears to
the sum of the market value of Seardel and Deneb shares as
at the end of that day. The expenditure allocated to the
unbundled Deneb Shares will reduce the expenditure of the
Seardel shares held. Seardel will advise shareholders of
the specified ratio by way of announcement to be released
on SENS once the Unbundling has been finalised.
Seardel shares held as capital assets:
Any Seardel shareholder holding Seardel shares as capital
assets will be deemed to acquire the unbundled Deneb
Shares as capital assets. The combined expenditure of such
Seardel and Deneb shares will be the expenditure incurred
in respect of the Seardel shares prior to the Unbundling
that is allowable in terms of paragraph 20 of the Eighth
Schedule to the Income Tax Act. Market value in relation
to Seardel shares acquired before 1 October 2001 means the
market value adopted or determined by the shareholder in
respect of those shares within the period contemplated in
paragraph 29(4) of the Eighth Schedule to the Income Tax
Act. The portion of the above combined expenditure and
market value to be allocated to the unbundled Deneb Shares
will be determined by applying the ratio that the market
value of Deneb Shares, as at the end of the day after the
Unbundling, being Monday, 1 December 2014, bears to the
sum of the market value of Seardel and Deneb shares at the
end of that day. The expenditure and market value
allocated to the unbundled Deneb Shares will reduce the
expenditure and market value of the Seardel shares held.
Seardel will advise shareholders of the specified ratio by
way of announcement to be released on SENS once the
Unbundling has been finalised.
Seardel shareholders will be deemed to have acquired the
unbundled Deneb Shares on the date on which the Seardel
shares were originally acquired, other than for purposes
of determining whether the Deneb shares are qualifying
shares as defined in section 9C of the Income Tax Act.
Non-resident Seardel shareholders:
Seardel shareholders who are non-resident for tax purposes
in South Africa are advised to consult their own
professional tax advisors regarding the tax treatment of
the Unbundling in their respective jurisdictions, having
regards to the laws in their jurisdiction and any
applicable tax treaties between South Africa and their
country of residence.
5. Salient Dates and Times
The salient dates and times of the Unbundling are as set
out below:
Publication of Unbundling Friday, 14 November 2014
declaration and finalisation
announcement on SENS
Pre-listing statement posted to Friday, 21 November 2014
shareholders on
Abridged pre-listing statement Friday, 21 November 2014
published on SENS on
Abridged pre-listing statement Monday, 24 November 2014
published in the press on
Last day to trade for Seardel Friday, 28 November 2014
shareholders to be entitled to
participate in the Unbundling
Listing of Deneb Shares under Monday, 1 December 2014
share code “DNB” and ISIN
ZAE000197398 on the JSE expected
at commencement of trade on
Commencement of trading of Deneb Monday, 1 December 2014
shares
Seardel shares commence trading Monday, 1 December 2014
“ex” their entitlement to Deneb
Shares
Record date for the Unbundling Friday, 5 December 2014
Accounts at CSDPs/brokers Monday, 8 December 2014
updated in respect of
dematerialised shareholders on
Share certificates posted to Monday, 8 December 2014
certificated shareholders by
registered post on or about
Notes:
These dates are subject to change. Any material change
will be released on SENS and published in the press.
6. Posting and availability of Pre-Listing Statement
The Deneb pre-listing statement will be posted to
shareholders on Friday, 21 November 2014 and will be
available on the Deneb website on www.deneb.co.za and the
Seardel website on www.seardel.co.za.
Cape Town
14 November 2014
Transaction Adviser and Sponsor to Deneb
PSG Capital (Proprietary) Limited
Sponsor to Seardel
Investec Bank Limited
Date: 14/11/2014 10:05:00 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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