MARSHALL MONTEAGLE PLC - disposal of shares in a subsidiary and withdrawal of cautionary

disposal of shares in a subsidiary and withdrawal of cautionary

Marshall Monteagle PLC
(Incorporated in Jersey)
(Registration No. 102785)
(External Registration No: 2010/024031/10)
JSE code: MMP ISIN: JE00B5N88T08
(“Marshall” or “the Company”)



DISPOSAL OF SHARES IN A SUBSIDIARY

WITHDRAWAL OF CAUTIONARY



1.     Introduction
       Shareholders are referred to the cautionary announcement dated 18 September 2019 and are
       advised that the Company, via its wholly owned subsidiary Monteagle Consumer Group Limited
       (“Monteagle Consumer”) has entered into an agreement with The SPAR Group Limited, (“SPAR”)
       to dispose of its entire 50% interest in Monteagle Africa Limited (“Monteagle Africa”), (“the
       Disposal”) to SPAR for a maximum amount of US$ 11 764 706 (R180 000 000 at an exchange rate
       of ZAR15.30 /US$1 on 3 October 2019).
2.     Background
       SPAR is a public listed company which specialises in the wholesaling and distribution of groceries,
       fast moving consumer goods, liquor, pharmaceutical and goods required for the building industry.
       Monteagle Africa offers end-to-end private label supply chain services.
3.     Rationale for the disposal
       Monteagle Africa have for many years supplied SPAR with private label consumer products
       predominantly sourced in South Africa and the Disposal reinforces this long-term relationship.
       The proceeds of the Disposal will be utilised by Monteagle Consumer to increase working capital
       for its ongoing local and international trade in fast moving consumer goods.
4.     Disposal consideration
       Subject to the fulfilment of the conditions precedent set out in paragraph 5 below, the
       consideration shall be calculated using a consideration calculation formula of a multiple of 2 times
       the profit after taxation of Monteagle Africa and its subsidiary, Monteagle Merchandising Services
       Proprietary Limited (“MMS”) for the financial year ending 30 September 2019 plus the net asset
       value of Monteagle Africa and MMS, as it will be reported on in the Annual Financial Statements
       of Monteagle Africa for the year ending 30 September 2019, subject thereto that the
       consideration shall not exceed US$ 11 764 706 (R180 000 000).



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           The consideration shall be paid by SPAR in cash on the date of fulfilment of the conditions
           precedent set out in paragraph 5 below.


5.         Conditions precedent
           The Disposal is subject to the following outstanding conditions precedent:

     5.1           that by no later than 30 October 2019:

                   5.1.1    the Takeover Regulation Panel established under the Companies Act, Act 71 of
                            2008 (“Companies Act”), either approves or exempts the Disposal as provided for
                            in section 115(1)(b) of the Companies Act, resulting from an application to be
                            made in this regard, by and at the cost of Monteagle Consumer;
                   5.1.2    SPAR provides written confirmation to Monteagle Consumer that it has obtained
                            approval for this Disposal from relevant financial institutions; and

     5.2           that by no later than 31 December 2019 or if applicable, by such later date as the parties
                   may agree upon in writing, the Competition authorities unconditionally approve this
                   Disposal in terms of the Competition Act, Act 89 of 1998, evidenced by the issue of a
                   merger clearance certificate, or it becomes apparent that such approval is not required.
6.         Effective date
           The effective date of the transaction is 1 October 2019.
7.         Unaudited pro forma financial effects
           The pro forma financial effects of the transaction on the Company’s earnings per share, headline
           earnings per share, net asset value per share and net tangible asset value per share are not
           significant. The value of the net assets that are the subject of the transaction is US$5 000 989
           (ZAR76 515 137) and the profits attributable to the net assets that are the subject of the
           transaction is US$2 426 002 (ZAR37 117 835).
8.         Categorisation
           This announcement is published in terms of the JSE Listings Requirements. The Disposal
           constitutes a category 2 transaction for the Company and does not require shareholder approval.


9.         Withdrawal of Cautionary
           Shareholders are advised that caution is no longer required to be exercised by shareholders
           when dealing in their securities


Johannesburg
4 October 2019



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Sponsor                               Legal Advisor
Sasfin Capital                        Shepstone & Wylie,
(A division of Sasfin Bank Limited)




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Date: 04/10/2019 12:37:00
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