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PNC
PNC
PNC - Pinnacle Technology Holdings Limited - Acquisition by Pinnacle of an
additional interest in Datanet
PINNACLE TECHNOLOGY HOLDINGS LIMITED
(Registration number 1986/000334/06)
Share code: PNC
ISIN: ZAE000022570
("Pinnacle" or the "Company" or the "Group" insofar as the reference is to
Pinnacle and some or all of its subsidiaries)
ACQUISITION BY PINNACLE OF AN ADDITIONAL INTEREST IN DATANET INFRASTRUCTURE
GROUP (PROPRIETARY) LIMITED ("DATANET") FROM THE LELLO FAMILY TRUST ("THE LELLO
TRUST") AND LEENDERT MARTINUS PRONK ("PRONK") (COLLECTIVELY "THE SELLERS") - A
SMALL RELATED PARTY TRANSACTION
1. INTRODUCTION
Shareholders are advised that Pinnacle has entered into a Sale
of Shares Agreement ("the Agreement") whereby the Sellers will
dispose of their 40% stake in Datanet ("the Sale Shares") and
their loan accounts in Datanet to Pinnacle for a total
purchase price of R16 800 000 ("the Purchase Price") subject
to the fulfilment of the suspensive conditions set out below
("the Transaction").
The effective date shall be the date upon which all the
suspensive conditions detailed in paragraph 4 below have been
fulfilled or waived, as the case may be ("the Effective
Date").
The business of Datanet is the distribution of copper, fibre,
wireless and related information and communications technology
("ICT") network hardware and allied infrastructure. Pinnacle
already owns 60% of Datanet.
2. RATIONALE
Pinnacle wishes to re-engineer and reposition the business
within the Group in a manner that requires Datanet to be
wholly-owned. The Board of Pinnacle believes that the re-
engineering plans for the business will better realise the
potential that it sees in this business, particularly in view
of the fact the business augments the product range offered in
the Group`s core businesses lines.
3. SALIENT TERMS
In terms of the Agreement, the Sellers shall dispose of 40% of
the issued ordinary share capital in Datanet held by them
together with their loan accounts in Datanet to Pinnacle for
the Purchase Price. Pinnacle shall make payment of the
Purchase Price to the Sellers in the form of 2 000 000
ordinary shares in Pinnacle at a price of R8.40 per share on
the date on which all of the suspensive conditions detailed
below have been fulfilled or waived, as the case may be.
The Purchase Price will be settled as follows:
The Lello Trust:
1 255 000 Pinnacle ordinary shares at a price of R8.40 per
Pinnacle share for 251 000 ordinary shares in Datanet
representing 25.1% of Datanet`s issued share capital, being
The Lello Trust`s portion of the Sale Shares plus the full
balance of the loan accounts due by Datanet to David Roydon
Lello ("Lello") and/or The Lello Trust as at the Effective
Date.
Pronk:
745 000 Pinnacle ordinary shares at a price of R8.40 per
Pinnacle share for 149 000 ordinary shares in Datanet
representing 14.9% of Datanet`s issued share capital, being
Pronk`s portion of the Sale Shares plus the full balance of
the loan account due by Datanet to Pronk as at the Effective
Date.
A material condition of the Transaction is that Pronk enters
into an employment contract with Datanet in which he will be
employed as an executive director of Datanet for a fixed non-
cancellable period of 24 months. Lello has resigned his
position as Managing Director and will enter into a contract
under which he will remain as a non-executive director for a
period of 12 months. All parties have complied with these
conditions.
4. SUSPENSIVE CONDITIONS
All suspensive conditions have been fulfilled, save for the
Transaction still being subject to the fulfilment of the
following unfulfilled suspensive conditions:
4.1 the formal approval of the Transaction by the trustees of
The Lello Trust in accordance with the trust deed of The
Lello Trust initially by 30 June 2011, but extended by
the parties to 8 July 2011; and
4.2 compliance with the JSE Limited ("JSE") Listings
Requirements and any other regulations issued by the JSE
from time to time, including but not limited to Pinnacle
obtaining a fairness opinion from a JSE-approved service
provider by 7 July 2011 or such later date as is agreed
by the parties.
5. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the Transaction on
Pinnacle`s financial results for the six months ended
31 December 2010 are not significant.
6. SMALL RELATED PARTY TRANSACTION
The Sellers are material shareholders in Datanet. The Purchase
Price is 1.2% of the market capitalisation of Pinnacle,
calculated as at close of business on 1 July 2011 and,
therefore, the Transaction is deemed to be a small related
party transaction in terms of Section 10 of the Listings
Requirements of the JSE and requires a fairness opinion from
an independent expert.
7. INDEPENDENT OPINION
The Pinnacle Board of Directors has appointed an independent
expert to provide the Company with a fairness opinion on the
Transaction. The appointment of the independent expert is in
the process of being approved by the JSE. Shareholders will be
advised of the fairness opinion once completed by the
independent expert.
Midrand
4 July 2011
Sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1996/000034/07)
Date: 04/07/2011 17:35:44 Produced by the JSE SENS Department.
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