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PNC
PNC
Pinnacle - Acquisition of 40% of RentNet Rentals (Pty) Limited
Pinnacle Technology Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1986/000334/06)
Share code: PNC & ISIN: ZAE000022570
("Pinnacle" or "the Group")
Acquisition of 40% of RentNet Rentals (Pty) Limited ("RentNet")
1. Introduction
Shareholders are advised that Pinnacle entered into an agreement to
acquire 40% of the ordinary shares of RentNet ("the transaction"). On
conclusion of the transaction, RentNet will be a wholly owned
subsidiary of the Group. In accordance with Section 10 of the JSE
Limited"s Listings Requirements, the transaction is classified as a
small related party transaction.
Arcay Corporate Services has been requested by the board of directors
of Pinnacle ("the board") to advise shareholders in terms of the small
related party transaction. Arcay Corporate Services has expressed the
opinion that the transaction is fair and reasonable to shareholders of
Pinnacle. Their opinion will lie open for inspection for 28 days from
the date of this announcement at the registered office of Pinnacle -
The Summit, 269 16th Street, Randjespark, Midrand.
2. The acquisition
Pinnacle acquired the ordinary shares of RentNet in the following
ratio"s:
From Konrad Nel 15%
From Neil McIver 15%
From Phillip Engelbrecht 10%
None of the conditions precedent stipulated in the agreement remain
unfulfilled.
The effective date of the transaction was 1 January 2006.
3. Rationale and background to the acquisition
The acquisition of the remaining shareholding in RentNet allows the
board to gain full control of RentNet, unlock operational synergies
within the Group and develop RentNet"s national presence.
4. Consideration and payment
The purchase consideration for the shares in RentNet was settled in R2
090 000 cash and 135 135 Pinnacle shares. At the current market price
of R2,39 per share the total consideration amounts to R 2 412 973.
5. Financial effects
The unaudited pro forma financial effects provided below is the
responsibility of the directors of Pinnacle and is disclosed in order
to provide shareholders with information on the impact of the
transaction on the interim results for the six months ended 31
December 2005.
The unaudited pro forma financial effects have been prepared in
accordance with International Financial Reporting Standards for
illustrative purposes only and, because of their nature, may not
fairly present the financial position of Pinnacle, changes in its
equity or results of its operations or cash flows subsequent to the
implementation of the transaction.
The unaudited pro forma financial effects of the acquisition on the
earnings, headline earnings, net asset value and net tangible asset
value per Pinnacle share, before and after the transaction, are set
out below:
Before After % Change
Earnings per share (cents) 11,9 12,0 0,8
Headline earnings per share (cents) 12,2 12,3 0,8
Net asset value per share (cents) 82,1 82,1 0,0
Net tangible asset value per share (cents) 68,8 67,2 (2,3)
Number of shares in issue ("000) 148 096 148 096 0,0
Weighted average shares in issue ("000) 144 109 144 109 0,0
Notes:
1. The figures in the "Before" column are extracted from the
unaudited interim results of Pinnacle for the six months ended 31
December 2005.
2. The figures in the "After" column assume that the transaction was
implemented on 1 July 2005 for earnings purposes and 31 December
2005 for asset value purposes.
3. The financial effects were based on the assumption that the
consideration shares were acquired at the current market value of
R2,39 each and issued on the same day. The financial effect of
the buy-back is not material.
Midrand
3 May 2006
Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1996/000034/07)
Independent expert: Arcay Corporate Services
Date: 03/05/2006 11:47:09 AM Produced by the JSE SENS Department
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