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MONEYWEB/AFRICAN - Firm Intention by AME to make an offer to acquire all of the issued ordinary shares of Moneyweb
MONEYWEB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/025067/06)
Share code: MNY ISIN code: ZAE000025409
("Moneyweb" or "the company")
AFRICAN MEDIA ENTERTAINMENT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1926/008797/06)
Share code: AME SIN code: ZAE000055802
("AME" or "the Offeror")
ANNOUNCEMENT OF FIRM INTENTION BY AME TO MAKE AN OFFER TO ACQUIRE ALL OF THE ISSUED ORDINARY SHARES OF MONEYWEB OTHER
THAN SHARES ALREADY HELD BY AME AND TREASURY SHARES
1. INTRODUCTION
Shareholders are advised that on 5 May 2017 the board of directors of the company ("the board") received from AME a
firm intention to make an offer ("the Offer") to acquire all of the issued ordinary shares of the company, excluding 1 000 000
ordinary shares already held by AME and 1 197 196 treasury shares held by Moneyweb ("the offer shares" and "the Proposed
Transaction").
It is intended that the Proposed Transaction will be implemented by way of a scheme of arrangement in terms of section 114
of the Companies Act, 2008 ("the Act" and "the Scheme").
The proposed transaction constitutes an affected transaction in terms of sections 117 and 118 of the Act, and the board
has therefore appointed a sub-committee of the board, comprising of independent non-executive directors Ms SJ Gordon
and Messers VW Mcobothi and L Sipoyo ("the independent committee"), to oversee the process, which will involve the
appointment of an independent expert acceptable to the Takeover Regulation Panel ("the TRP" and "the Expert"). The
expert will provide the independent committee with advice in regard to the offer and the Scheme and make appropriate
recommendations to the independent committee on behalf of Moneyweb shareholders.
The recommendations of the board and the independent committee and the report of the Expert will be included in a circular
to the shareholders of Moneyweb containing the terms and conditions governing the offer and the Scheme
("the Scheme circular") which will be distributed to shareholders subject to the fulfilment of the conditions set out in paragraph 4 below.
2. TRANSACTION RATIONALE
AME is an established player in the South African media industry, operating mainly in radio and ancillary services. AME has
decided to expand its sphere of operations within the media space and, as such, the acquisition of Moneyweb by AME is
advantageous to the respective shareholders of AME and Moneyweb for the following reasons, inter alia:
- it enables AME to continue to build scale and presence in the South African media space;
- it provides Moneyweb and AME with the opportunity to provide an integrated and personalised service to their
respective target audiences;
- it provides economies of scale and efficiencies;
- it provides Moneyweb with the opportunity to have a single shareholder who will have a vested interest in its growth
and development;
- it provides Moneyweb shareholders with an opportunity to benefit from AME's relatively higher market rating;
- it provides Moneyweb shareholders with an opportunity to acquire shares in a larger group of companies with
exposure to a wider range of businesses; and
- it provides to Moneyweb shareholders a participation in a more liquid share, given the larger shareholder base in AME
post the acquisition.
3. MECHANICS OF THE ACQUISITION BY AME OF THE SCHEME SHARES
The Proposed Transaction will be implemented by way of the Scheme.
The Proposed Transaction and Scheme will be subject to the conditions precedent set out in paragraphs 4.2 ("Proposed
Transaction Offer Conditions") and 5 ("the Scheme Conditions") (collectively, "the Proposed Transaction Conditions
Precedent").
4. THE PROPOSED TRANSACTION OFFER CONDITIONS
The Offer is subject to fulfilment of the Offer Conditions. AME proposes a cash-based offer with a share alternative. The
cash-based offer will be priced at R0.26 per Moneyweb share whilst the offer to be settled in AME shares will be priced at
R0.28 per Moneyweb share. The Firm Intention Offer will, subject to the fulfilment of the Proposed Transaction Conditions
Precedent, result in R0.26 being payable per Scheme Share in terms of the cash alternative and R0.28 per Scheme Share
being discharged in accordance with the share alternative ("the Scheme Consideration").
The Scheme Consideration is equivalent to a 53% premium in terms of the cash alternative and a 65% premium in terms of
the share alternative, determined with reference to the 30-day volume-weighted average price ("VWAP") on 8 May 2017 of
R0.17 per Moneyweb share.
The Scheme Consideration is equivalent to a 53% premium in terms of the cash alternative and a 65% premium in terms of
the share alternative, determined with reference to the closing share price on 8 May 2017 of R0.17 per Moneyweb share.
The share-based Scheme Consideration is to be settled by the issue of shares in AME, based on a Scheme Consideration
amount of R0.28 per Moneyweb share and R70.00 per AME share, which equates to an exchange ratio of 250 Scheme
Shares for each AME share. The cash-based Scheme Consideration will be settled in cash. Should a Moneyweb shareholder,
hold an insufficient number of Moneyweb shares to exchange into an AME share ("fraction of an AME share"), then that
portion of the Moneyweb shareholding which is insufficient to exchange into an AME share shall be settled in cash as if that
shareholder had elected the cash alternative in respect of the number of Moneyweb shares in question.
Implementation of the Scheme will not affect the earnings or net asset value of Moneyweb securities and the provisions for
pro forma financial effects contemplated in Regulation 101(7)(b)(iv) are therefore not applicable.
However, the illustrative effects on a Moneyweb shareholder accepting the Scheme consideration are set out below:
Before the offer (based After the offer (based on the
on Moneyweb's financial companies' latest financial
year ended 30 June 2016) year ends consolidated)
250 Moneyweb 250 Moneyweb
shares shares 1 AME share 1 AME share
Cents Cents Cents Cents
NAV earnings/(loss) NAV EPS
250 Moneyweb shares/cash 4 116.12 (1 151.77) 6 500.00 -
of 26 cents per share
250 Moneyweb shares/ 4 116.12 (1 151.77) 2 843.23 502.30
1 AME share
AME is of the view that the Scheme Consideration reflects the full and fundamental value of Moneyweb and will be attractive
to the scheme participants, being those shareholders who hold Scheme Shares and who are entitled to vote on the Scheme
("the Scheme Members").
AME confirms that it has sufficient authorised and unissued AME shares to settle the share-based Scheme Consideration
and adequate cash resources to settle the cash-based Scheme Consideration, and it has provided the TRP with a bank
guarantee from Absa Bank Limited to this effect in accordance with Regulations 111(4) and 111(5).
4.1 Basis on which the Offer will be made
The Offer is made on the basis that:
(a) the entire issued share capital of Moneyweb comprises of 107 771 800 ordinary shares in issue, of which
1 197 196 are treasury shares held by Moneyweb Proprietary Limited and 1 000 000 are held by AME, thus
leaving a balance of 105 574 604 Moneyweb shares to be acquired by AME ("the Scheme Shares");
(b) Moneyweb shall be entitled, prior to the approval of the Scheme, to make dividend payments to Moneyweb
shareholders in the ordinary course and on the same basis as dividends have been calculated and paid
historically ("Normal Dividends"). Should Moneyweb declare Normal Dividends after the date hereof but before
the date on which the Scheme Consideration is to be paid or discharged in terms of the Scheme ("Actual
Payment Date"), the Scheme Consideration will be reduced by an amount equal to the dividend per Moneyweb
share which has been paid to Moneyweb shareholders;
(c) no payments or other distributions, other than the Normal Dividends, will be declared or paid between the date
hereof and the Actual Payment Date;
(d) Moneyweb and its subsidiaries shall not repurchase any Moneyweb shares between the date hereof and the
Actual Payment Date;
(e) Moneyweb will not incur any further indebtedness, encumber its assets or provide any guarantee or like
instrument between the date hereof and the Actual Payment Date, unless with the prior written consent of AME;
(f) Moneyweb will not enter into any corporate actions (including, the issue of shares, the granting of share
options or warrants or the acquisition of any company or business) between the date hereof and the Actual
Payment Date;
(g) no material contracts or arrangements of Moneyweb will be capable of being terminated by the counterparties
thereto as a result of a change of control of Moneyweb;
(h) the Scheme meeting will be convened by the Moneyweb Board to be held by no later than 31 July 2017, or such
other date as agreed between Moneyweb and AME in writing;
(i) the Scheme will be finally implemented by no later than 31 August 2017 or such later date as agreed between
Moneyweb and AME in writing; and
(j) upon implementation of the Scheme, application will be made to the JSE to terminate the listing of all the issued
shares of Moneyweb.
4.2 The Offer Conditions
The Offer is made subject to fulfilment of the following Offer Conditions:
(a) By no later than the day before the Offer is announced on the JSE Stock Exchange News Service ("SENS") or
in the press, a statement is made by the majority of those directors of Moneyweb who are entitled to vote on
the Scheme, that:
(i) given the circumstances and the market conditions prevailing at the date of this Firm Intention Offer,
they have considered the terms and conditions of the Proposed Transaction and at the time of such
statement they are, subject to the favourable opinion of the Independent Expert to be appointed in terms
of sections 114(2) and (3) of the Act who will be providing the appropriate independent advice to the
independent Moneyweb Board, satisfied with the terms and conditions of the Proposed Transaction;
(ii) they intend to support the Scheme and to facilitate the Scheme, to the extent that a board of directors will
normally be required to do for purposes of implementation of a scheme; and
(iii) they intend to recommend that Scheme Members vote in favour of the Scheme.
(b) AME will be entitled to waive any one or more of the Offer Conditions or part thereof upon written notice to that
effect to Moneyweb prior to the date upon which the Offer Conditions are required to be fulfilled.
(c) AME will be entitled, in its discretion, to extend the date for the fulfilment of any of the Offer Conditions, for a
period of not exceeding 30 days upon written notice to that effect to Moneyweb.
5. THE SCHEME CONDITIONS
The Scheme will be subject to (and will become operative on the relevant operative date upon) the fulfilment of the following
Scheme Conditions:
(a) No distributions (as such term is defined in the Act) having been declared and or paid, other than the Normal
Dividends, between the date of the Firm Intention Offer and the Actual Payment Date.
(b) No increase in or amendments to the share capital of Moneyweb having been effected between the date of the Firm
Intention Offer and the Actual Payment Date.
(c) The Scheme having been approved by a majority representing not less than 75% (seventy five percent) of the votes
exercised by the Scheme Members present and voting, either in person or by proxy, at the Scheme meeting.
(d) The Scheme not having been opposed by 15% (fifteen percent) or more of the voting rights exercised by Scheme
Members present and voting, or, should the Scheme have been opposed by 15% (fifteen percent) or more of
the voting rights exercised by Scheme Members present and voting, no Scheme Member who voted against the
Scheme requires Moneyweb to seek court approval in terms of section 115(3) of the Act. This condition may be
waived by AME.
(e) If the Scheme is opposed by 15% (fifteen percent) or more of the voting rights exercised by Scheme Members
present and voting, and a Scheme Member who voted against the Scheme requires Moneyweb to seek court
approval and AME waives the condition precedent set out in paragraph (d) above and Moneyweb does not elect to
treat the special resolution as a nullity in terms of section 115(5) of the Act, the court having approved the special
resolution in terms of section 115(3) of the Act.
(f) No leave to review the Scheme being granted by a court on an application within 10 (ten) business days after the
vote, to any person who voted against the Scheme and who applied to the court for a review of the Scheme in terms
of section 115(7) of the Act. This condition may be waived by AME on condition that the court approves the special
resolution in terms of section 115(3) of the Act.
(g) Within the period prescribed under section 164(7) of the Act, no valid demands are received by Moneyweb in terms
of such section in respect of Moneyweb shares representing, in aggregate, more than 5% (five percent) of the total
issued shares in Moneyweb. This condition may be waived by AME on written notice to Moneyweb to that effect.
(h) The receipt of, inter alia, the following regulatory approvals in respect of the implementation of the Scheme (either
conditionally or subject to conditions acceptable to the party on whom the condition will be enforceable):
(i) The TRP.
(ii) The Johannesburg Stock Exchange ("the JSE"), to the extent necessary.
(iii) The South African Competition Authorities, to the extent necessary.
(iv) The Financial Surveillance Department of the South African Reserve Bank.
(v) Any other regulatory approvals that may be required in order for AME to take control of Moneyweb.
(i) AME will be entitled to waive those Scheme Conditions which are capable of being waived in law.
(j) AME will be entitled, in its discretion, to extend the date for the fulfilment of any of the Scheme Conditions for a period
not exceeding 30 days upon written notice to that effect to Moneyweb.
6. SHAREHOLDER UNDERTAKING
Once the independent committee of Moneyweb has resolved to proceed with the Scheme (after a positive fair and reasonable
opinion from the independent Expert and approval from the independent committee), AME will obtain an irrevocable
undertaking in writing from Moneyweb's holding company, Caxton and CTP Publishers and Printers Limited, to the effect that:
1. it will not dispose of any Scheme Shares prior to the Scheme Meeting; and
2. it will accept AME shares in respect of all its Scheme Shares.
The irrevocable undertaking will not be capable of amendment or withdrawal for a period of six months after its issue.
7. INDICATIVE TIMING
AME envisages the following key dates in regard to the Scheme, namely:
Event Indicative date
Formal JSE/TRP approval of the Scheme circular 25 May 2017
Scheme circular posted to shareholders, including notice of General Meeting 29 May 2017
General Meeting to approve Scheme 30 June 2017
Expected date of receipt of compliance certificate from Takeover Regulation Panel (assuming no
shareholders exercise their rights in terms of section 115(3)(a) and (b)) 31 July 2017
Expected Operative Date/Delisting date 7 August 2017
Termination of Moneyweb listing on the JSE 8 August 2017
Please note that this indicative timeline is subject to timing of regulatory approvals.
8. TERMINATION OF THE LISTING OF MONEYWEB
Should the Scheme be implemented as contemplated in this announcement, Moneyweb will become a wholly-owned
subsidiary of the Offeror and the listing of the company on the JSE will be terminated.
9. SCHEME CIRCULAR
The Scheme circular relating to the Proposed Transaction incorporating the terms of the Scheme the notice of the Scheme
meeting, a form of proxy, a form of election and a form of surrender will be posted to Moneyweb shareholders on or
about Monday, 29 May 2017. The salient dates and times in relation to the Scheme will be published on the date of posting
the Scheme circular and will also be contained in the Scheme circular.
10. RESPONSIBILITY STATEMENT
The boards of Moneyweb and AME and the independent committee accept responsibility for the information contained in
this announcement, and certify that, to the best of their respective knowledge and belief, the information is true and, where
appropriate, this announcement does not omit anything likely to affect the importance of the information included.
11. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Following the release of this firm intention announcement, the cautionary announcements previously published by the
company, the last of which appeared on 6 April 2017, are hereby withdrawn.
Johannesburg
16 May 2017
Designated Advisor to Moneyweb and Sponsor to AME
ARBOR CAPITAL
Corporate Advisor to AME
PWC
Attorneys to Moneyweb and AME
FLUXMANS ATTORNEYS
Auditors to Moneyweb
BDO
Auditors and Reporting Accountants to AME
GRANT THORNTON
Date: 16/05/2017 05:05:00 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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