TELKOM BUYS AFRICA ONLINE – WARRING BUYERS AGREE
The African Lakes Corporation Limited and Africa Telecoms Company Limited announced that they have reached agreement with Telkom SA, clearing the way for the sale of Africa Online.
In particular, an agreement has been reached between ATC and Telkom whereby ATC consents to the disposal by TALC of AfOL to Telkom for approximately £9.72 million. In return for ATC’s consent to the disposal, Telkom has undertaken to pay a contribution of £600,000 towards the costs incurred by ATC in the course of making its offers for TALC.
Telkom and Wananchi Online Limited (a 28.5 per cent. shareholder in ATC) are also considering whether any opportunities may exist to cooperate in the Kenyan market in the future. This may or may not lead to an agreement between Telkom and Wananchi. ATC’s consent to the Agreement is not contingent upon any prospective outcome to these discussions.
As a result of the Agreement, the Company has, with the consent of the Panel, been able to complete the Disposal without the necessity of obtaining formal shareholder approval for which notice of an extraordinary general meeting was sent to TALC’s shareholders on 16 February 2007. Accordingly, while the TALC extraordinary general meeting which has been convened for 5 March 2007 will still take place, shareholders are advised that the Disposal is no longer conditional upon the passing of the resolution to be proposed at that meeting and that, consequently, they need not attend. The Board of TALC supports this action on the basis that sufficient Irrevocable Undertakings to vote in favour of the Disposal have already been received from a substantial majority of shareholders.
ATC also announces that, as a consequence of the Agreement, and with the consent of the board of TALC and its adviser and also with the consent of the Panel, ATC has lapsed its revised cash offer for TALC (the ‘Revised Offer’ as announced by ATC on 8 February 2007) by invoking condition (e) (iv) to that offer.
The next step in distributing the proceeds of the Disposal to TALC’s shareholders will be for a further extraordinary general meeting to be called to propose a members’ voluntary liquidation. Schneider Media & Holding Group LLC, a 58.3 per cent. shareholder in ATC which holds 39,080 TALC shares (representing approximately 13.5 per cent. of TALC’s issued share capital) and The African Technology Media & Telecommunications Investment Company Limited, a 11.4 per cent. shareholder in ATC that holds 35,000 TALC shares (representing approximately 12.1 per cent. of TALC’s issued share capital), have each agreed to vote in favour of a members’ voluntary liquidation of the Company when it is proposed at this second extraordinary general meeting. With this support, TALC is confident that the resolution will be passed by the requisite majority. TALC will be sending shareholders the notice of this extraordinary general meeting shortly.
This agreement represents a victory for Telkom SA and the is the first fruit of its (until this point unsuccessful) regional acquisitions strategy. Now the prize has been won, interest will now turn to what it will use it for.