Wrap Text
Sale of Gallo Music Asset
TISO BLACKSTAR GROUP SE
(Incorporated in England and Wales)
(Registration number SE000110)
(Registered as an external company with limited
liability in the Republic of South Africa under
registration number 2011/008274/10)
JSE share code: TBG ISIN: GB00BF37LF46
("Tiso Blackstar" or "the Company")
SALE OF GALLO MUSIC GROUP
1. INTRODUCTION
Tiso Blackstar is pleased to announce that the Company, through its wholly-owned
indirect subsidiary Blackstar Holdings Group Proprietary Limited (“BHG”), entered into a
written sale of shares and claims agreement (“Sale Agreement”) with Arena Holdings
Proprietary Limited (“Purchaser”), Gallo Music Investments Proprietary Limited ("GMI")
and Indigenous Film Distribution Proprietary Limited ("IFD"), in terms of which BHG will
sell all shares held by it in GMI and IFD (collectively, the “Companies”), constituting the
entire issued share capital of the Companies, as well as all loan and other claims of
whatever nature owing by them to BHG (collectively, the “Sale Equity”), to the Purchaser
for a total purchase consideration of ZAR 75 000 000 (“Purchase Consideration”)
(“Disposal”).
2. DESCRIPTION OF THE ASSETS
2.1. GMI is a full service music publishing and record company, whose business involves
the acquisition and/or exploitation of all rights of ownership, including copyrights, in
music compositions (both the musical works and lyrics), as well as representing artists,
recording, manufacturing, distributing digitally and physically and selling pre-recorded
music and video in South Africa and internationally under the names of "Gallo Record
Company" and "Gallo Music Publishers".
2.2. The business of IFD involves the acquisition, marketing and distribution of motion
pictures and other film media produced in South Africa and the African continent and
distributed globally.
3. RATIONALE FOR THE DISPOSAL
Following the sale of the Media business and as published in the Company’s 2019
Integrated Annual Report, Tiso Blackstar’s 100% interest in the Gallo Businesses were
considered to be part of the media structure and the Tiso Blackstar Board elected to
dispose of this investment separately.
4. CONSIDERATION
4.1. The Purchase Consideration of ZAR 75 000 000 is allocated as follows –
4.1.1. in respect of the Sale Equity relating to GMI: ZAR 65 000 000; and
4.1.2. in respect of the Sale Equity relating to IFD: ZAR 10 000 000,
and has been calculated on the basis that, on the Closing Date (as defined in
paragraph 7.1 below), the Companies will not be indebted in respect of any debt that
has been outstanding for more than 12 months (excluding the sale claims and any
unpaid royalty amounts).
4.2. Payment of the full Purchase Consideration will occur on the Closing Date (as defined
below), at which time the Sale Equity shall be delivered to the Purchaser.
5. APPLICATION OF THE PURCHASE CONSIDERATION
The majority of the Purchase Consideration will be utilised to reduce the Group’s debt to
appropriate levels.
6. CONDITIONS PRECEDENT
The Disposal is not subject to any outstanding conditions precedent and is, accordingly,
unconditional.
7. EFFECTIVE DATE OF THE DISPOSAL
7.1. It is anticipated that the Disposal will be implemented on Tuesday, 10 March 2020
(“Closing Date”), whereupon ownership of and all risk in and all benefit attaching to
the Sale Equity will, against receipt of the full Purchase Consideration, pass to the
Purchaser.
7.2. Possession and effective control of the Sale Equity will likewise be given to the
Purchaser on the Closing Date.
8. FINANCIAL INFORMATION
The value of the net assets being disposed of, as at 30 June 2019, being the date of the
last audited annual financial statements, was ZAR 37 364 000.
The audited profits after tax attributable to the Sale Equity for the financial year ended 30
June 2019, was ZAR 2 631 000, based on the audited annual financial statements of the
Companies for the year ended 30 June 2019, which were prepared in terms of IFRS.
9. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The Sale Agreement contains representations, warranties and restraints by BHG in favour
of the Purchaser which are standard for a transaction of this nature.
10. CLASSIFICATION OF THE DISPOSAL
The Disposal constitutes a category 2 transaction in terms of the JSE Limited Listings
Requirements.
London
6 March 2020
Sponsor and Corporate Adviser
PSG Capital
Date: 06-03-2020 05:00:00
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.
Sharenet Sites 
