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BLACKSTAR GROUP SE - Confirmation of swap ratio relating to scheme of arrangement with New Bond Capital Ltd shareholders

Release Date: 15/03/2013 16:00
Code(s): BCK NBC     PDF:  
Wrap Text
Confirmation of swap ratio relating to scheme of arrangement with New Bond Capital Ltd shareholders

New Bond Capital Limited
(Previously Mvelaphanda Group Limited)
Incorporated in the Republic of South Africa
Registration number: 1995/004153/06
Share code: NBC
ISIN: ZAE000170726
(“New Bond Capital” or “NBC”)


Blackstar Group SE
(Previously Blackstar Group PLC)
(Registered in Malta with registration number SE 4)
(Registered as an external company with limited liability in the Republic of South Africa
 under registration number 2011/008274/10)
Share code: BCK / BLCK
ISIN: MT0000620105
("Blackstar")


JOINT ANNOUNCEMENT OF THE ADJUSTED SWAP RATIO RELATING TO THE OFFER MADE BY BLACKSTAR TO
ACQUIRE THE ENTIRE ISSUED ORDINARY SHARE CAPITAL OF NEW BOND CAPITAL BY WAY OF A SCHEME
OF ARRANGEMENT (THE "SCHEME")

1.   INTRODUCTION

     1.1. Shareholders of NBC (“NBC Shareholders”) are referred to the joint announcement
          by NBC and Blackstar published on SENS on Monday, 4 March 2013 and in the
          press on Friday, 8 March 2013 (“the Firm Intention Announcement”), advising of the
          firm intention of Blackstar to make an offer for the acquisition by Blackstar, or one
          of its wholly owned subsidiaries, of the entire issued ordinary share capital of NBC
          (other than treasury shares held by subsidiaries of NBC and shares already held by
          Blackstar in NBC) (the “Target Shares"), by way of a scheme of arrangement in
          terms of section 114 of the Companies Act 71 of 2008, as amended (the
          "Companies Act").

     1.2. If implemented, the Scheme will result in those NBC Shareholders participating in
          the Scheme receiving 1.12000 (one point twelve) newly issued ordinary shares in
          Blackstar (“Blackstar Shares”) for every 100 (one hundred) Target Shares disposed
          of in terms of the Scheme (“the Swap Ratio”), provided that any fraction of a
          Blackstar Share which an NBC Shareholder (participating in the Scheme) becomes
          entitled to will be rounded-off such that if it comprises 0.5 (zero point 5) or –

          1.2.1. more of a Blackstar Share, it will be rounded upwards; and

          1.2.2. less of a Blackstar Share, it will be rounded downwards
                (“the Scheme Consideration”).

     1.3. The mechanism for the calculation of the Swap Ratio is set out in more detail in
          paragraph 4 of the Firm Intention Announcement.

     1.4. The Scheme Consideration has been calculated with reference to the intrinsic net
          asset value per ordinary share (“NAV”) of each of Blackstar and NBC as at
          31 December 2012, less a 10% (ten percent) discount on each such NAV.

2.   CALCULATION OF THE ADJUSTED SWAP RATIO

     2.1. Further to paragraph 4.4 of the Firm Intention Announcement, in the event that the
          NAV of either Blackstar or NBC had increased or decreased by more than 10% (ten
          percent) as at the agreed date of 28 February 2013, from the NAV of either
          Blackstar or NBC as at 31 December 2012, Blackstar and NBC would have
          recalculated the Scheme Consideration by applying the methodology for the
          calculation of the Swap Ratio set out in paragraph 4 of the Firm Intention
          Announcement ("Adjusted Swap Ratio").
     
     2.2. The NAV of Blackstar and NBC as at 28 February 2013 did not reflect an increase
          or decrease by more than 10% from the NAV of either Blackstar or NBC as at 31
          December 2012 and a recalculation of the Swap Ratio is not required and the
          Adjusted Swap Ratio is therefore not applicable. Accordingly, the Swap Ratio
          remains as set out in paragraph 1.2 above.

3.   PRO FORMA FINANCIAL EFFECTS OF THE SCHEME

     3.1. The table below sets out the unaudited pro forma financial effects of the Scheme for
          a NBC Shareholder. The Blackstar financial information is based on the Blackstar
          unaudited results for the six months ended 30 June 2012 which have been prepared
          using accounting policies that comply with International Financial Reporting
          Standards and that are consistent with those applied in the audited financial
          statements of Blackstar for the year ended 31 December 2011. The NBC financial
          information is based on the unaudited results of NBC for the six months ended 31
          December 2012 which have been prepared in accordance with International
          Financial Reporting Standards. The accounting for the acquisition of the Target
          Shares by Blackstar is in accordance with International Financial Reporting
          Standard 3: Business Combinations, being IFRS 3R (IFRS 3 as revised and re-
          issued in January 2008 and amended in May 2010).
     
     3.2. The preparation of unaudited pro forma financial information in respect of NBC is
          the responsibility of the NBC directors and the unaudited pro forma financial
          information in respect of Blackstar is the responsibility of the Blackstar directors.
          This unaudited pro forma financial information is provided for illustrative purposes
          only in order to provide information about how the Scheme may have affected NBC
          Shareholders. Due to the nature of unaudited pro forma financial information, it may
          not be a true reflection of the actual impact of the Scheme.
     
     3.3. For the purposes of earnings and headline earnings per share, it was assumed that
          the Scheme became operative on 1 January 2012 and for the purposes of net asset
          value and net tangible asset value per share it was assumed that the Scheme
          became operative on 30 June 2012. The unaudited pro forma financial effects are
          presented in a manner consistent with the basis on which the historical financial
          information of Blackstar has been prepared and in terms of Blackstar’s accounting
          policies.
     
     3.4. The pro forma financial effects on NBC Shareholders have been calculated in
          respect of 100 (one hundred) NBC shares held before implementation of the
          Scheme and 1.12000 Blackstar shares held after implementation of the Scheme.

                                                              NBC     Blackstar
                                                           shares        shares
                                                       before the     after the
                                                           Scheme        Scheme    Change %

 Notes and assumptions                                         a)           b)

 Number of ordinary shares                                    100      1.12000
 
(Losses)/Earnings for number of ordinary shares
 reflected above (cents)

 Basic and diluted (losses)/earnings                         (34)          373       1,197
 
 Basic and diluted headline (losses)/earnings               (583)          470         181

 Net asset value for number of ordinary shares reflected
 above (cents)                                              1,548        1,981          28

 Net tangible asset value for number of ordinary shares
 reflected above (cents)                                    1,548        1,875          21


Notes and assumptions:

     a) The financial information in the “NBC Shares before the Scheme” column is based on
        financial information extracted, without adjustment, from NBC’s published interim
        unaudited results for the six months ended 31 December 2012.
     b) The financial information in the “Blackstar Shares after the Scheme” column is based
        on financial information extracted from Blackstar’s interim unaudited results for the six
        months ended 30 June 2012, adjusted for the following:
          i. share-buy backs which took place in February 2013. A total of 5.9 million shares
             were bought back at a cost of £4,670,000. The shares are held by Blackstar as
             treasury shares. This adjustment will have a continuing effect on Blackstar’s
             financial results;
         ii. the disposal of Blackstar’s services derivative investment in October 2012 for cash
             proceeds of £9,727,000. The investment had a carrying value of £8,519,000 at 30
             June 2012 and thus a profit of £1,208,000 has been recognised. Linked to this
             investment was a loan receivable with a carrying value of £1,294,000 as at 30
             June 2012. This loan was also settled in cash on disposal of the services
             derivative investment. This adjustment will not have a continuing effect on
             Blackstar’s financial result;
        iii. the receipt of a capital distribution as a result of NBC unbundling TMG shares to
             shareholders. Through its 28.3% shareholding in NBC, Blackstar received
             14,692,305 ordinary shares in Times Media Group Limited (“TMG”) with a fair
             value of £15,757,000 calculated based on the prevailing TMG share price and
             exchange rate on the date of distribution being 25 September 2012. This
             adjustment will not have a continuing effect on Blackstar’s financial result;
        iv.  the disposal of Blackstar’s shareholding in NBC (amounting to 28.3% of the issued
             ordinary share capital of NBC) in November 2012. Cash proceeds of £23,639,000
             (calculated based on actual proceeds of R332,682,000 translated at the prevailing
             exchange rate of date of receipt). The investment in NBC (included in investments
             at fair value through profit and loss) had a carrying value of £38,983,000 as at 30
             June 2012 and the resulting loss on disposal of £15,344,000 is recognised. This
             adjustment will not have a continuing effect on Blackstar’s financial result; and
         v.  effects of the Scheme, which includes, inter alia, once-off transaction costs of
             R1,330,000 which have been set-off against share premium, acquiring 100%
             interest in NBC and the issuing of a total of 5,831,934 Blackstar shares (currently
             held by Blackstar as treasury shares) in settlement of the Scheme Consideration
             (this adjustment will have a continuing effect on Blackstar’s financial results).
     c) 520,708,365 NBC shares were in issue before the implementation of the Scheme and
        82,020,356 Blackstar shares will be in issue (net of 68,066 treasury shares) after the
        implementation of the Scheme.

4.    AMENDMENT TO SCHEME CONDITIONS

     4.1. The following Scheme condition precedent, as detailed in paragraph 6.1.1 of the
          Firm Intention Announcement and repeated below for ease of reference, is for the
          reasons stated below no longer applicable –
          
            “the passing of all resolutions required to implement the Scheme by the requisite
             majority of Blackstar Shareholders, which resolutions will include, inter alia, the
             increase of Blackstar's authorised share capital and the authority to issue the
             Scheme Consideration by Blackstar”.

     4.2. Blackstar has, subsequent to the issue of the Firm Intention Announcement,
          advised NBC in writing that it has sufficient ordinary shares in its capital to issue in
          favour of scheme participants as Scheme Consideration, and that it does not
          require any authority from the Blackstar ordinary shareholders to issue the Scheme
          Consideration. Accordingly, the Scheme condition precedent that Blackstar
          receives authority from Blackstar ordinary shareholders in order to increase its
          share capital and/or issue the Scheme Consideration has become unnecessary.

     4.3. As stated in paragraph 6.2 of the Firm Intention Announcement this Scheme
          condition precedent cannot be waived.

     4.4. Blackstar and NBC have accordingly agreed to dispense with this Scheme
          condition precedent.

5.   FURTHER DOCUMENTATION AND SALIENT DATES

     Further details of the Scheme will be included in a scheme circular, which is expected to
     be posted to New Bond Capital Shareholders on or about 29 March 2013. The salient
     dates in relation to the Scheme will be announced at the time of the issuing of the
     aforementioned scheme circular.

6.   NBC INDEPENDENT BOARD RESPONSIBILITY STATEMENT

     The NBC independent board of directors accepts responsibility for the information
     contained in this announcement which relates to NBC and confirms that, to the best of
     its knowledge and belief, such information which relates to NBC is true and the
     announcement does not omit anything likely to affect the importance of such information.

7.   BLACKSTAR RESPONSIBILITY STATEMENT

     The board of directors of Blackstar accepts responsibility for the information contained in
     this announcement which relates to Blackstar and confirms that, to the best of its
     knowledge and belief, such information which relates to Blackstar is true and the
     announcement does not omit anything likely to affect the importance of such information.


Johannesburg & London
15 March 2013
Transaction advisor to New Bond Capital: PKF Corporate Finance (Pty) Ltd
Sponsor to New Bond Capital: PSG Capital (Pty) Ltd
Legal advisor to New Bond Capital: Cliffe Dekker Hofmeyr Inc.
Sponsor to Blackstar: PSG Capital (Pty) Ltd
Nomad to Blackstar: Liberum Capital Limited
Legal advisors to Blackstar: Paul Hastings (Europe) LLP

Date: 15/03/2013 04:00:00 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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