Joint Announcement - Thembeka Scheme of Arrangement and Specific Repurchases of Shares by PSG
 
 
PSG Group Limited
 
(Incorporated in the Republic of South Africa)
 
Registration number: 1970/008484/06
 
Share code: PSG
 
ISIN code: ZAE000013017
 
(“PSG”)
 
 
Thembeka Capital Limited (RF)
 
(Incorporated in the Republic of South Africa)
 
Registration number: 2005/016065/06
 
(“Thembeka”)
 
 
JOINT ANNOUNCEMENT OF THE FIRM INTENTION OF PSG TO MAKE AN
 
OFFER TO ACQUIRE ALL THE ORDINARY SHARES IN THEMBEKA, NOT
 
ALREADY HELD BY PSG OR ITS SUBSIDIARIES, BY WAY OF A SCHEME OF
 
ARRANGEMENT AND INCLUDING SPECIFIC REPURCHASES OF SHARES BY PSG
 
 
1. INTRODUCTION
 
 
1.1 Thembeka wishes to unwind its investment portfolio in a
 
manner that realises value for its shareholders
 
(“Unwinding”). The Unwinding will be implemented in
 
consecutive transaction steps.
 
 
1.2 In terms of the Unwinding, Thembeka will, inter alia,
 
transfer its interests in its investments that are
 
subject to black economic empowerment (“BEE”) lock-in
 
periods, being Pioneer Food Group Limited and Kaap Agri
 
Limited and only those shares in Curro Holdings Limited
 
that are subject to a BEE lock-in period (“BEE Lock-in
 
Shares”), to a new black-owned and controlled company
 
at a determined value (“Lock-in Investments Transfer”),
 
the shareholding of which will ultimately be held by
 
the Stellenbosch BEE Education Trust (“SBET”), as to
 
51%, and PSG, as to the remaining 49%. SBET is a
 
broad-based BEE trust of which 100% of the
 
beneficiaries are black students.
 
 
1.3 Shareholders are hereby notified of PSG’s firm
 
intention to make an offer (“Firm Intention Offer”) to
 
acquire all the ordinary shares in Thembeka, not
 
already held by PSG or its subsidiaries, by way of a
 
scheme of arrangement in terms of section 114 of the
 
Companies Act, 2008 (“Companies Act”) (“Scheme”). For
 
the avoidance of doubt, the Scheme will only be
 
implemented post the implementation of the Lock-in
 
Investments Transfer and only after 31 December 2014.
 
 
1.4 The implementation of the Scheme will amount to a
 
category 2 acquisition by PSG in terms of the Listings
 
Requirements of the JSE Limited (“JSE”) (“JSE Listings
 
Requirements”). The Unwinding will include a specific
 
repurchase of shares by PSG from Thembeka (“Thembeka
 
Specific Repurchase”) and SBET (“SBET Specific
 
Repurchase”). The Thembeka Specific Repurchase will be
 
implemented after the Lock-in Investment Transfer but
 
before the implementation of the Scheme and the SBET
 
Specific Repurchase will be implemented after the
 
implementation of the Scheme.
 
 
1.5 It is important to note that the values of Thembeka and
 
PSG are relative, given that Thembeka and PSG have
 
similar investment exposures, and therefore movements
 
in the share price of PSG and/or the underlying
 
investments of Thembeka and PSG from now until the
 
implementation date of the Scheme should not have a
 
material impact on the scheme consideration ratio set
 
out below.
 
 
1.6 The purpose of this announcement is to advise PSG
 
shareholders and Thembeka shareholders of the terms and
 
conditions of the Firm Intention Offer and to advise
 
PSG shareholders of the terms and conditions of the
 
Thembeka Specific Repurchase and the SBET Specific
 
Repurchase.
 
 
2. RATIONALE FOR THE UNWINDING
 
 
2.1 Rationale for Thembeka
 
 
Thembeka was established in 2005 to provide BEE parties
 
with a vehicle to participate in the opportunities
 
created by the BEE Act, No 53 of 2003, read together
 
with the BEE Codes of Good Practice. Thembeka has
 
successfully over the past 9 years concluded quality
 
BEE transactions that have contributed towards
 
Thembeka’s successes to date. Set out below are the key
 
reasons that the board of Thembeka (“Thembeka Board”)
 
considered when resolving to proceed with the
 
Unwinding:
 
 
2.1.1 the BEE landscape in corporate South Africa has
 
changed over the past few years, with many companies
 
changing the way in which they conclude BEE
 
ownership transactions, which makes Thembeka’s
 
business model less viable;
 
 
2.1.2 Thembeka has grown its assets under management
 
substantially over the years. In order to
 
participate in sizeable transactions that may have
 
an impact on its underlying intrinsic value Thembeka
 
would require substantial capital injections. Given
 
Thembeka’s unique shareholding structure, wherein
 
51% of its shareholding is black owned, the scarcity
 
of black capital and stringent bank funding
 
requirements, Thembeka’s board recognises that
 
Thembeka’s ability to raise additional capital to
 
pursue new sizeable investments will be restricted;
 
and
 
 
2.1.3 Thembeka, currently restricts the trading of its
 
shares to black individuals only. As such Thembeka
 
has historically traded over-the-counter, at a
 
substantial discount to its underlying intrinsic
 
value. Further the recent Financial Services Board
 
directive that prohibits over-the-counter trading in
 
its current form, makes it difficult for Thembeka’s
 
BEE shareholders to exit and/or realise value. The
 
Scheme, if implemented, will seek to remedy these
 
effective “lock-in’s” created for Thembeka’s black
 
shareholders and will result in Thembeka’s black
 
shareholders realising Thembeka’s underlying
 
intrinsic value at a fair price. Thembeka’s black
 
shareholders will receive a more liquid and
 
tradeable instrument, being new JSE-listed shares in
 
PSG. As an example and based on the over the counter
 
traded Thembeka share price at 30 June 2014,
 
Thembeka’s black shareholders will effectively
 
realise (in PSG shares) a 56.3% premium to the
 
Thembeka 30 trading day VWAP at 30 June 2014.
 
 
2.2 Rationale for PSG
 
 
The Unwinding as proposed is marginally positive for
 
PSG. However, as PSG was instrumental in the
 
establishment of Thembeka, together with various BEE
 
parties, and PSG has derived an indirect benefit from
 
the commitment of Thembeka’s BEE shareholders since
 
2006, PSG has elected to assist Thembeka in the
 
implementation of the Unwinding.
 
 
3. MECHANICS OF THE SCHEME
 
 
3.1 The Scheme will constitute an “affected transaction” as
 
defined in section 117(c) of the Companies Act and will
 
be regulated by the Companies Act, the Companies
 
Regulations, 2011 (“Companies Regulations”) and the
 
Takeover Regulation Panel (“TRP”).
 
 
3.2 The Scheme will be implemented in terms of section 114
 
of the Companies Act and will be proposed by the
 
Thembeka Board between Thembeka and its shareholders
 
other than PSG Group.
 
 
3.3 The Firm Intention Offer will be subject to the
 
condition precedent set out in paragraph 4.2 below
 
("Firm Intention Offer Condition").
 
 
3.4 The Scheme will be subject to the conditions precedent
 
set out in paragraph 5.1 below ("Scheme Conditions").
 
 
4. THE FIRM INTENTION OFFER
 
 
4.1 MATERIAL TERMS OF THE FIRM INTENTION OFFER
 
 
4.1.1 The Firm Intention Offer will be made on the basis
 
that –
 
 
4.1.1.1 PSG will acquire all ordinary shares in Thembeka
 
not already held by PSG or its subsidiaries
 
(“Scheme Shares”), being 6,880,047 Thembeka
 
shares;
 
 
4.1.1.2 following the implementation of the Scheme,
 
Thembeka will be a wholly-owned subsidiary of
 
PSG (PSG confirms that it will adhere to the
 
provisions of paragraph 10.21 of Schedule 10 of
 
the JSE Listings Requirements, in this regard);
 
 
4.1.1.3 once the Firm Intention Offer Condition and the
 
Scheme Conditions have been fulfilled and the
 
Scheme is implemented, Thembeka shareholders
 
will receive the scheme consideration of 1.7
 
(one point seven) PSG ordinary shares for every
 
1 (one) unlisted Scheme Share disposed of in
 
terms of the Scheme, rounded to the nearest
 
whole number and credited as fully paid (“Scheme
 
Consideration”);
 
 
4.1.1.4 the Scheme Consideration will not have a cash
 
alternative;
 
 
4.1.1.5 the Scheme Consideration will be issued on
 
market and will be listed on the main board of
 
the JSE; and
 
 
4.1.1.6 a total of 11,696,079 PSG shares will be issued
 
as the Scheme Consideration.
 
 
4.1.2 The Scheme Consideration has been calculated on the
 
basis set out below –
 
 
4.1.2.1 the Scheme Consideration has been calculated
 
based on the intrinsic value of R168.03 per
 
Thembeka ordinary share as at 30 June 2014,
 
after providing for capital gains tax and
 
discounts on the BEE Lock-in Shares. For the
 
avoidance of doubt, the Scheme Consideration has
 
been calculated post the Lock-in Investments
 
Transfer; and
 
 
4.1.2.2 the 30-day volume weighted average share price
 
of R97.56 per PSG ordinary share for the 30-day
 
period ended 30 June 2014.
 
 
4.1.3 It is important to note that the values of Thembeka
 
and PSG are relative, given that Thembeka and PSG
 
have similar investment exposures, and therefore
 
movements in the share price of PSG and/or the
 
underlying investments of Thembeka and PSG from now
 
until the implementation date of the Scheme should
 
not have a material impact on the Scheme
 
Consideration ratio.
 
 
4.2 FIRM INTENTION OFFER CONDITION
 
 
4.2.1 The posting of the circular to Thembeka
 
shareholders, other than PSG, in relation to the
 
Scheme ("Scheme Circular") is subject to the
 
fulfilment of the Firm Intention Offer Condition
 
that, by no later than 31 October 2014, all
 
requisite approvals have been received from the JSE,
 
the TRP and the Financial Surveillance Department of
 
the South African Reserve Bank for the posting of
 
the Scheme Circular, to the extent required.
 
 
4.2.2 The Firm Intention Offer Condition cannot be waived.
 
 
4.2.3 PSG will be entitled to extend the date for the
 
fulfilment of the Firm Intention Offer Condition by
 
up to 30 days, in its own discretion, upon written
 
notice to Thembeka, but shall not be entitled to
 
extend the date to a date later than the aforesaid
 
30-day period without the prior written consent of
 
Thembeka.
 
 
5. THE SCHEME CONDITIONS
 
 
5.1 The Scheme will be subject to (and will become
 
operative on the relevant operative date upon) the
 
fulfilment of the following conditions precedent on or
 
before 31 December 2014 –
 
 
5.1.1 that PSG shareholders approve all resolutions
 
required in order to implement the Unwinding;
 
 
5.1.2 that the Scheme be approved by the requisite
 
majority of Thembeka shareholders, as contemplated
 
in section 115(2)(a) of the Companies Act, and, to
 
the extent required, by a High Court in terms of
 
section 115(2)(c) of the Companies Act, and, if
 
applicable, that Thembeka does not treat the
 
aforesaid shareholder resolution as a nullity, as
 
contemplated in section 115(5)(b) of the Companies
 
Act;
 
 
5.1.3 that, in relation to any objections to the Scheme by
 
Thembeka shareholders –
 
 
5.1.3.1 no Thembeka shareholders give notice objecting
 
to the Scheme, as contemplated in section 164(3)
 
of the Companies Act and vote against the
 
resolution proposed at the general meeting to
 
approve the Scheme (“Scheme Meeting”); or
 
 
5.1.3.2 if Thembeka shareholders give notice objecting
 
to the Scheme, as contemplated in section 164(3)
 
of the Companies Act, and vote against the
 
resolution proposed at the Scheme Meeting,
 
Thembeka shareholders holding no more than 5% of
 
all Scheme Shares eligible to be voted at the
 
Scheme Meeting give such notice and vote against
 
the resolutions proposed at the Scheme Meeting;
 
or
 
 
5.1.3.3 if Thembeka shareholders holding more than 5% of
 
all Scheme Shares eligible to vote at the Scheme
 
Meeting give notice objecting to the Scheme, as
 
contemplated in section 164(3) of the Companies
 
Act, and vote against the resolution proposed at
 
the Scheme Meeting, the relevant Thembeka
 
shareholders do not exercise their appraisal
 
rights, by giving valid demands in terms of
 
sections 164(5) to 164(8) of the Companies Act
 
within 30 business days following the Scheme
 
Meeting, in respect of more than 5% of the
 
Scheme Shares eligible to be voted at the Scheme
 
Meeting; and
 
 
5.1.4 that, in respect of the implementation of the Scheme
 
and only to the extent that same may be applicable,
 
the approval of the JSE, the TRP, the South African
 
competition authorities and any other relevant
 
regulatory authorities (either unconditionally or
 
subject to conditions acceptable to PSG) be
 
obtained.
 
 
5.2 The Scheme Conditions in paragraphs 5.1.1, 5.1.2 and
 
5.1.4 cannot be waived.
 
 
5.3 The Scheme Condition in paragraph 5.1.3 may be waived
 
by PSG upon written notice to Thembeka, prior to the
 
date for fulfilment of the relevant Scheme Condition.
 
 
5.4 PSG will be entitled to extend the date for the
 
fulfilment of any of the Scheme Conditions, by up to 60
 
days, in its own discretion, upon written notice to
 
Thembeka, but shall not be entitled to extend the date
 
to a date later than the aforesaid 60-day period
 
without the prior written consent of Thembeka.
 
 
6. SHAREHOLDINGS IN THEMBEKA AND ACTING AS PRINCIPAL
 
 
6.1 Currently PSG, through its wholly owned subsidiary PSG
 
Private Equity (Proprietary) Limited, holds 49% of the
 
issued share capital of Thembeka.
 
 
6.2 PSG confirms that it is the ultimate prospective
 
purchaser of the Scheme Shares and is acting alone and
 
not in concert with any party.
 
 
7. AUTHORISED SHARE CAPITAL
 
 
PSG confirms that it has sufficient authorised share
 
capital available to settle the Scheme Consideration shares
 
to be issued to Thembeka shareholders in terms of the
 
Scheme.
 
 
8. THEMBEKA INDEPENDENT BOARD, OPINION AND RECOMMENDATIONS
 
 
8.1 In accordance with the Companies Regulations, an
 
independent Thembeka board, comprised of independent
 
non-executive directors, has been appointed by the
 
Thembeka Board to evaluate the Scheme (“Thembeka
 
Independent Board”).
 
 
8.2 The Thembeka Independent Board will appoint an
 
independent expert acceptable to the TRP to provide the
 
Thembeka Independent Board with external advice in
 
regard to the Scheme and to make appropriate
 
recommendations to the Thembeka Independent Board for
 
the benefit of Thembeka shareholders. The substance of
 
the external advice and the opinion of the Thembeka
 
Independent Board on the Scheme will be detailed in the
 
Scheme Circular.
 
 
9. FURTHER DOCUMENTATION AND SALIENT DATES
 
 
9.1 Further details of the Scheme will be included in the
 
Scheme Circular that will, subject to the fulfilment of
 
the Firm Intention Offer Condition, be posted to
 
Thembeka shareholders in due course. The Scheme
 
Circular will, inter alia, also contain a notice of the
 
Scheme Meeting, a form of proxy and a form of surrender
 
and transfer.
 
 
9.2 The Scheme will become effective and be implemented
 
following the fulfilment of the Firm Intention Offer
 
Condition and the Scheme Conditions. The salient dates
 
in relation to the Scheme will be published in due
 
course.
 
 
10. THE THEMBEKA SPECIFIC REPURCHASE AND SBET SPECIFIC
 
REPURCHASE
 
 
10.1 As steps in the Unwinding, PSG will repurchase
 
9,902,349 ordinary shares (representing 4.5% of the
 
issued shares of PSG) from Thembeka (“Thembeka
 
Repurchase Shares”) at R97.56 per share and 1,785,850
 
ordinary shares (representing 0.8% of the issued shares
 
of PSG) from SBET and its subsidiary (“SBET Repurchase
 
Shares”) at R97.56 per share.
 
 
10.2 The purchase consideration in respect of the Thembeka
 
Repurchase Shares, being R966 million, shall be settled
 
by way of the creation of a loan account against PSG in
 
favour of Thembeka, and the purchase consideration in
 
respect of the SBET Repurchase Shares, being R174
 
million, shall be settled by way of the creation of a
 
loan account against PSG in favour of SBET.
 
 
10.3 The Thembeka Specific Repurchase and the SBET Specific
 
Repurchase (“Specific Repurchases”) will be subject to
 
the following conditions precedent:
 
 
10.3.1 the approval of the Specific Repurchases by the
 
requisite majority of PSG shareholders, as
 
contemplated in section 48(8) and 115(2)(a) of the
 
Companies Act, and, to the extent required, by a
 
High Court in terms of section 115(2)(c) of the
 
Companies Act, and, if applicable, that PSG does not
 
treat the aforesaid shareholder resolutions as a
 
nullity, as contemplated in section 115(5)(b) of the
 
Companies Act; and
 
 
10.3.2 that, in respect of the implementation of the
 
Specific Repurchases and only to the extent that
 
same may be applicable, the approval of the JSE, the
 
TRP, the South African competition authorities and
 
any other relevant regulatory authorities (either
 
unconditionally or subject to conditions acceptable
 
to PSG) be obtained.
 
 
10.4 Subsequent to the implementation of the Specific
 
Repurchases, the Thembeka Repurchase Shares and the
 
SBET Repurchase Shares shall be cancelled.
 
 
10.5 The effective date of the Thembeka Specific Repurchase
 
is expected to be during January 2015 and will take
 
place prior to the implementation of the Scheme. The
 
effective date of the SBET Specific Repurchase is
 
expected to be during January 2015 and will take place
 
post implementation of the Scheme.
 
 
10.6 Given that the Specific Repurchases will entail the
 
acquisition of more than 5% of the issued share capital
 
of PSG, the Specific Repurchases are subject to the
 
requirements of section 114 and 115 of the Companies
 
Act. In terms of section 115 of the Companies Act and
 
section 5.69 of the JSE Listings Requirements, the
 
Specific Repurchases will require shareholder approval
 
by way of a special resolution.
 
 
10.7 In accordance with the Companies Regulations, an
 
independent PSG board, comprised of independent non-
 
executive directors, has been appointed by the board of
 
directors of PSG to evaluate the Specific Repurchases
 
(“PSG Independent Board”).
 
 
10.8 The PSG Independent Board will appoint an independent
 
expert acceptable to the TRP to provide the PSG
 
Independent Board with external advice in regard to the
 
Specific Repurchases and to make appropriate
 
recommendations to the PSG Independent Board for the
 
benefit of PSG shareholders. The substance of the
 
external advice and the opinion of the PSG Independent
 
Board on the Specific Repurchases will be detailed in
 
the circular referred to in paragraph 10.9 below.
 
 
10.9 A circular containing full information on the Specific
 
Repurchases and also incorporating a notice of general
 
meeting (“General Meeting”) of PSG shareholders will be
 
posted to PSG shareholders in due course (“Repurchase
 
Circular”). The required resolutions authorising the
 
Specific Repurchases will be tabled at the General
 
Meeting.
 
 
10.10 It is important to note that PSG will issue 11,696,079
 
PSG shares in terms of the Scheme but PSG acquires
 
9,902,349 PSG shares in terms of the Thembeka Specific
 
Repurchase and 1,785,850 PSG shares in terms of the
 
SBET Specific Repurchase. Accordingly, any movement in
 
the PSG share price from now until the implementation
 
date of the Unwinding should not have a material
 
financial impact on PSG.
 
 
11. PRO FORMA FINANCIAL EFFECTS ON THEMBEKA SHAREHOLDERS
 
 
11.1 The pro forma financial effects on Thembeka
 
shareholders are the responsibility of the Thembeka
 
directors and have been prepared for illustrative
 
purposes only to provide information about how the
 
Scheme, incorporating the Thembeka Specific Repurchase
 
and the SBET Specific Repurchase, may affect the
 
financial position of the Thembeka shareholders. The
 
pro forma financial effects on Thembeka shareholders
 
have been calculated in respect of 1 (one) Thembeka
 
Scheme Share held before the Scheme and 1.7 (one point
 
seven) PSG shares held after the Scheme.
 
 
11.2 The pro forma financial effects are presented for
 
illustrative purposes only and, because of their
 
nature, may not fairly present the actual financial
 
effects of the Scheme, incorporating the Thembeka
 
Specific Repurchase and the SBET Specific Repurchase,
 
on Thembeka shareholders.
 
 
 
Audited
 
results for
 
the year
 
ended
 
February Pro forma
 
2014 (1) after (2) Change
 
 
Net asset value per
 
share (R) 146.42 63.44 (56.7%)
 
 
Tangible net asset value
 
per share (R) 146.42 46.36 (68.3%)
 
 
Recurring headline
 
earnings per share
 
(cents) 673.6 773.3 14.8%
 
 
Headline earnings per
 
share – basic (cents) 3,613.7 935.5 (74.1%)
 
 
Attributable earnings
 
per share – basic
 
(cents) 3,692.9 992.6 (73.1%)
 
 
Sum-of-the-Parts value
 
per share at 30 June
 
2014 (R) before tax 216.75 198.40 (8.5%)
 
 
30-day volume weighted
 
average over-the-counter
 
price per share at 30
 
June 2014 (R) (3) 106.12 165.85 56.3%
 
 
Notes and assumptions:
 
 
1. Extracted, without adjustment, from the audited results
 
of Thembeka for the year ended 28 February 2014, except
 
for the sum-of-the-parts value per share at 30 June
 
2014, which was calculated using quoted market prices
 
for all JSE-listed and over-the-counter traded
 
investments, with unquoted investments being valued
 
using market-related multiples.
 
 
2. The “Pro forma after” column sets out the position of a
 
Thembeka shareholder following implementation of the
 
Scheme, now owning PSG shares. The financial information
 
is based on PSG’s pro forma financial effects for the
 
year ended 28 February 2014 (refer paragraph 12 below),
 
pursuant to implementation of the Scheme, multiplied by
 
the scheme consideration of 1.7 PSG ordinary shares in
 
order to provide the pro forma financial effects for
 
Thembeka shareholders. The predominant reason for the
 
decrease in pro forma net asset value and net tangible
 
asset value per share as well as headline and
 
attributable earnings per share results from Thembeka
 
having accounted for substantial marked-to-market
 
profits on its JSE-listed equity investments, whereas
 
PSG either equity accounted or consolidated the majority
 
of its underlying investments for the financial year
 
ended 28 February 2014. Thembeka and PSG’s accounting
 
treatment of similar underlying investments in
 
accordance with International Financial Reporting
 
Standards thus differed during the aforementioned
 
financial period.
 
 
3. The 30-day volume weighted average price of R106.12 per
 
share was calculated with reference to Thembeka shares
 
traded over-the-counter until 30 June 2014. The R165.85
 
per share was calculated with reference to PSG’s JSE-
 
listed 30-day volume weighted average price of R97.56
 
per share being multiplied by the 1.7 exchange ratio.
 
 
 
12. PRO FORMA FINANCIAL EFFECTS ON PSG SHAREHOLDERS
 
 
12.1 The pro forma financial effects on PSG shareholders are
 
the responsibility of the PSG directors and have been
 
prepared for illustrative purposes only to provide
 
information about how the Scheme, incorporating the
 
Thembeka Specific Repurchase and the SBET Specific
 
Repurchase, may affect the financial position of PSG
 
shareholders.
 
 
12.2 The pro forma financial effects are presented for
 
illustrative purposes only and, because of their
 
nature, may not fairly present the actual financial
 
effects of the Scheme, incorporating the Thembeka
 
Specific Repurchase and the SBET Specific Repurchase,
 
on PSG shareholders.
 
Audited
 
results
 
for the
 
year ended
 
February Pro forma
 
2014 (1) after (2) Change
 
 
Net asset value per
 
share (R) 37.48 37.32 (0.4%)
 
 
Tangible net asset value
 
per share (R) 26.03 27.27 4.8%
 
 
Recurring headline
 
earnings per share
 
(cents) 446.9 454.9 1.8%
 
 
Headline earnings per
 
share – basic (cents) 551.3 550.3 (0.2%)
 
 
Attributable earnings
 
per share – basic
 
(cents) 574.9 583.9 1.6%
 
 
Sum-of-the-Parts value
 
per share at 30 June
 
2014 (R) 116.13 116.71 0.5%
 
 
Notes and assumptions:
 
 
1. Extracted, without adjustment, from the audited results
 
of PSG for the year ended 28 February 2014, except for
 
the sum-of-the-parts value per share at 30 June 2014,
 
which was calculated using quoted market prices for all
 
JSE-listed and over-the-counter traded investments,
 
whilst unquoted investments were valued using market-
 
related multiples.
 
 
2. The “Pro forma after” column sets out the results of the
 
Scheme and incorporates the following financial effects:
 
 
a. The Lock-in Investments Transfer (refer paragraph
 
1.2 above) being implemented at a transaction value
 
of R825 million and that SBET is treated as an
 
associate of PSG.
 
 
b. The Thembeka Specific Repurchase (refer paragraph
 
10 above) being implemented.
 
 
c. The acquisition of 6,880,047 Thembeka shares, being
 
those not already held by PSG and its subsidiaries,
 
settled by way of issuing 11,696,079 PSG shares.
 
 
d. The elimination of Thembeka’s equity and reserves
 
in accordance with standard consolidation
 
procedures.
 
 
e. The SBET Specific Repurchase (refer paragraph 10
 
above) being implemented.
 
 
f. Capitalised transaction costs are estimated to be
 
R8 million.
 
 
g. All adjustments are expected to have a continuing
 
effect.
 
 
13. THEMBEKA INDEPENDENT BOARD RESPONSIBILITY STATEMENT
 
 
The Thembeka Independent Board accepts responsibility for
 
the information contained in this announcement which
 
relates to Thembeka in connection with the Scheme and
 
confirms that, to the best of its knowledge and belief,
 
such information is true and the announcement does not omit
 
anything likely to affect the importance of such
 
information.
 
 
14. PSG INDEPENDENT BOARD RESPONSIBILITY STATEMENT
 
 
The PSG Independent Board accepts responsibility for the
 
information contained in this announcement which relates to
 
PSG in connection with the Specific Repurchases and
 
confirms that, to the best of its knowledge and belief,
 
such information is true and the announcement does not omit
 
anything likely to affect the importance of such
 
information.
 
 
15. PSG BOARD RESPONSIBILITY STATEMENT
 
 
The board of directors of PSG accepts responsibility for
 
the information contained in this announcement which
 
relates to PSG in connection with the Scheme and confirms
 
that, to the best of its knowledge and belief, such
 
information is true and the announcement does not omit
 
anything likely to affect the importance of such
 
information.
 
 
16. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS
 
 
Thembeka shareholders are referred to Thembeka’s voluntary
 
cautionary announcement on 15 July 2014 and the further
 
announcement on 17 July 2014, and are advised that, whereas
 
the terms of the Scheme have now been announced, caution is
 
no longer required to be exercised by shareholders.
 
 
Stellenbosch
 
10 September 2014
 
 
PSG Capital: Transaction adviser and sponsor to PSG
 
 
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