{"id":15189,"date":"2012-06-12T12:36:24","date_gmt":"2012-06-12T10:36:24","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=15189"},"modified":"2012-06-12T13:38:16","modified_gmt":"2012-06-12T11:38:16","slug":"mvelaphanda-in-cash-and-share-offer-for-avusa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/15189\/mvelaphanda-in-cash-and-share-offer-for-avusa\/","title":{"rendered":"Mvelaphanda in cash and share offer for Avusa"},"content":{"rendered":"

Mvelaphanda Group<\/a>\u201a which owns about 21% of Avusa<\/a>\u201a announced on Tuesday that it is making a cash and share offer to acquire all the shares in issue in the media and entertainment company that it does not already own in a deal worth about R3 billion.<\/p>\n

The cash offer of R24 per Avusa share is being made through Mvela\u2019s wholly owned subsidiary\u201a Richtrau No. 229 (Proprietary) Limited.<\/p>\n

Blackstar Group SE<\/a>\u201a a listed investment company that controls 28% of Mvela Group\u201a is the arranger and promoter of the transaction and will assist management in driving the turnaround strategy in Avusa.<\/p>\n

The transaction comprises a series of interconditional steps that will result in Richtrau becoming a listed entity on the JSE<\/a>\u201a housing all of Avusa\u2019s assets.<\/p>\n

Andrew Bonamour<\/a>\u201a CEO of Blackstar Group \u00a0and Interim CEO of Mvelaphanda Group\u201a said: \u201cThe transaction presents a unique opportunity to consolidate South Africa\u2019s leading media and entertainment company through a single listed entity\u201a and to partner with a strong management team in accelerating a turnaround and new growth strategy for the business. This transaction further demonstrates the value unlock strategy for Mvela Group shareholders\u201a which has been my key objective since becoming interim CEO.\u201d<\/p>\n

The offer comprises a cash offer of R24.00 per Avusa ordinary share and a share exchange of Avusa ordinary shares (or a portion thereof) for ordinary shares in Richtrau. The cash offer represents a premium of 19.6% to the Avusa 30 day volume weighted average price (VWAP) per ordinary share of R20.07 as at close of business on 11 June 2012. The share exchange ratio is 1.478 Richtrau ordinary shares for every one Avusa ordinary share. The exchange ratio is based on Richtrau\u2019s net asset value (existing Avusa ordinary shares owned plus cash less debt) and Avusa\u2019s 30-day VWAP of R20.07.<\/p>\n

In order to fund the cash offer\u201a Mvela Group is injecting R480 million of equity into Richtrau and raising R650m of bridge funding to finance the cash offer to Avusa shareholders.<\/p>\n

In terms of the composite transaction\u201a Richtrau proposes to implement the offer through a scheme of arrangement\u201a the listing of all the ordinary shares of Richtrau on the JSE and Mvela Group unbundling its shares in Richtrau to its shareholders.<\/p>\n

Upon listing\u201a Richtrau will have a smaller board (maximum of 9 people) that will consist of an independent chairperson and other experienced business professionals to support management and provide the necessary strategic guidance to the business.<\/p>\n

Richtrau has chosen Colin Cary as the new head of Avusa following the conclusion of the proposed transaction. Cary\u201a who is currently managing director of Avusa Retail Solutions\u201a is the founder and former CEO of Hirt and Carter\u201a which Avusa acquired with UHC in November 2010.<\/p>\n

Bonamour said: \u201cThe intention is for the management of Avusa to drive a more collaborative approach to achieve cross-selling and synergy benefits between the businesses and accelerate Avusa\u2019s cost savings and turnaround strategy. Blackstar has agreed to remain invested in Avusa for a minimum period of three years to ensure that the operational turnaround is achieved.\u201d<\/p>\n

Richtrau has secured irrevocable undertakings from a number of key Avusa shareholders to vote in favour of the offer\u201a which shareholders collectively hold 65.0% of those Avusa shares eligible to vote at the scheme meeting.<\/p>\n

The scheme circular is expected to be sent to Avusa shareholders around 16 July 2012 with the salient dates in relation to the scheme to be published in the media prior to posting the circular.<\/p>\n

Commenting on the offer\u201a Avusa said it provided Avusa reholders with the flexibility to realise their shareholding in Avusa at a substantial premium and\/or continue to retain their shareholding in Avusa through listed Richtrau shares.<\/p>\n

It added that Avusa would be delisted from the JSE and Richtrau would be listed on the bourse and unbundled to Mvela\u2019s shareholders\u201a pursuant to the transaction.<\/p>\n

Mike Robertson \u2013 acting group CEO of Avusa Limited and MD of the Avusa Media Division said: \u201cThe independent board of Avusa is supportive of the transaction and the flexibility offered to shareholders under the offer\u201a subject to a fair and reasonable assessment by our appointed independent advisers Ernst & Young.<\/p>\n

\u201cThe new shareholders have committed to upholding and abiding by the spirit and principles of the Avusa Media Editorial Charter\u201a which promotes a free media and editorial independence.<\/p>\n

\u201cWe look forward to working with Blackstar and the new shareholders of Avusa towards positioning the group to capitalise on its key competitive strengths and execute on future growth opportunities\u201a\u201d Robertson added.<\/p>\n

Avusa\u2019s media brands include Sunday Times, The Times, The Sowetan, Sunday World, Daily Dispatch, The Herald, ELLE, Home Owner; and\u00a0others.<\/p>\n

Its digital businesses includes news sites such as SowetanLive, TimesLive and BusinessLive, while CareerJunction provides online recruitment services.<\/p>\n

MapIT provides rich map data and mapping technology to both local and international clients looking for digital mapping solutions.<\/p>\n

News of the offer saw Avusa\u2019s share price up 4.88% or 100 cents at R21.50 per share at 12:12 local time\u201a but the price earlier hit an intraday high of R22 per share \u2013 R2 less than the cash offer.<\/p>\n

Relates article:<\/strong><\/p>\n

Avusa expect headline earnings 35%-45% lower<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Mvelaphanda Group\u201a which owns about 21% of Avusa\u201a is making a cash and share offer to acquire all the shares in issue in the media and entertainment company that it does not already own in a deal worth about R3 billion.<\/p>\n","protected":false},"author":8,"featured_media":7874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3118,1978,3117,1438,26,3121,1604,3119,3116,3122,3120,3123,3124],"class_list":["post-15189","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trending","tag-andrew-bonamour","tag-avusa","tag-blackstar-group","tag-careerjunction","tag-headline","tag-mapit","tag-media-1","tag-mike-robertson","tag-mvelaphanda-group","tag-sowetanlive","tag-sunday-times","tag-the-sowetan","tag-the-times"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/15189","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=15189"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/15189\/revisions"}],"predecessor-version":[{"id":15192,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/15189\/revisions\/15192"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/7874"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=15189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=15189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=15189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}