Cape Town - Caxton shareholders is set on accepting a share-swap offer from African Media Entertainment (AME) in which it will acquire Moneyweb.
Shares in Moneyweb, Caxton and AME fell on Monday after they released separate statements on the JSE's SENS service about the deal. At 16:15 Moneyweb was sitting at -4.17% at 23 cents, Caxton fell -3.22% at R11.12 and AME was down -1.49% at R66.00.
Moneyweb advised shareholders that a meeting will be held on Friday on the offer and share scheme from AME.
AME, which operates in the radio sector with stations like Algoa FM, OFM and Radio Heads, intends to acquire 100% of the issued ordinary share capital of Moneyweb. This excludes 1 000 000 ordinary shares already held by AME and 1 197 196 treasury shares in Moneyweb.
"Subject to implementation of the scheme, Caxton will dispose of 50.72% of Moneyweb, to be settled by the issue by AME of 217 372 ordinary shares at an issue price of 7 000 cents per share."
This means that Caxton is going to recieve shares in AME worth R15.3m.Moneyweb has a market cap of around R24m so Caxton is getting a R2.5m premium on the deal, explained Purple Group trading specialist Martin Harris.
On Monday Caxton indicated that it will accept the AME offer contained in the scheme. AME added that Caxton provided a written irrevocable undertaking that it will vote in favour of the resolutions required to implement the scheme.
The deal will result in Moneyweb having a single shareholder and this needs to gain approval by the JSE.
The controlling shareholder of Caxton, The Moolman & Coburn Partnership, and its associates, hold 38% of the issued share capital of AME. Caxton and AME are therefore deemed to be related parties in terms of the Listings Requirements of the Johannesburg Stock Exchange.
The disposal is categorised as a small related party transaction in terms of the Listings Requirements and accordingly requires confirmation from an independent professional expert approved by the JSE that the terms of the disposal are fair as far as the shareholders of the company are concerned.
In this regard, Mazars Corporate Finance Proprietary Limited was been appointed it has issued a fairness opinion.
The radio group announced the Moneyweb offer in May, with plans to delist the struggling media company from the JSE in August.Read Fin24's top stories trending on Twitter: Fin24’s top stories