16th Mar 2007 07:30
Mwana Africa PLC16 March 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THEUNITED STATES, AUSTRALIA, JAPAN OR SOUTH AFRICA MWANA AFRICA PLC ANNOUNCES INTENTION TO MAKE A SHARE EXCHANGE OFFER VALUED ATC$69.7 (£30.8) MILLION TO ACQUIRE ALL OUTSTANDING SHARES OF SOUTHERNERA DIAMONDS INC. AT AN IMPLIED PRICE OF C$0.420 (£0.185) PER SHARE OFFER REPRESENTS A 42.4% PREMIUM TO SOUTHERNERA SHAREHOLDERS (ALL DOLLAR AMOUNTS ARE STATED IN CANADIAN $, STERLING EQUIVALENTS ARE CALCULATED AT £1: $2.266) London, March 16, 2007 - Mwana Africa Plc ("the Company" or "Mwana", AIM SymbolMWA-L) announced today that it intends to make a share exchange take-over bid(the "Offer") to acquire all of the outstanding common shares ("SouthernEraCommon Shares") of SouthernEra Diamonds Inc. ("SouthernEra", TSX Symbol SDM-T;AIM Symbol SRE-L) on the basis of one Mwana ordinary share ("Mwana OrdinaryShares") for every 2.3333 SouthernEra Common Shares held. The Company willconsider making appropriate proposals to option and warrant holders in duecourse. SouthernEra is a Canadian based integrated diamond company holdingalluvial and kimberlite diamond exploration projects in the Democratic Republicof Congo ("DRC"), an 18 per cent. carried interest in the Camafuca mine inAngola, a 57 per cent. interest in the Klipspringer diamond mine in South Africaand advanced diamond exploration projects in Canada. The Offer would represent an implied offer price of approximately C$0.420(£0.185) per SouthernEra Common Share (based on Mwana's 15 March, 2007 closingprice on the AIM market operated by the London Stock Exchange ("AIM") of £0.433)and would value the outstanding SouthernEra Common Shares at approximately $69.7million (£30.8 million). Based on the number of SouthernEra Common Sharesoutstanding, as publicly disclosed, Mwana would issue up to an aggregate of 64.1million Mwana Ordinary Shares to SouthernEra shareholders under the Offer whichwould represent, if fully diluted, 20.6% of Mwana's Ordinary Shares (excludingtreasury shares) after giving effect to such issuance. Based on the closing price of Mwana's Ordinary Shares on AIM on 15 March, 2007,the implied offer price represents a premium of approximately 42.4% over theclosing price of SouthernEra Common Shares on the Toronto Stock Exchange ofC$0.295 as at 15 March, 2007. The Company holds in aggregate a total of 16,457,500 SouthernEra Common Shares,representing approximately 9.92% of the outstanding SouthernEra Common Shares. In addition, the Company has entered into lock-up agreements with JP MorganAsset Management (UK) Limited ("JP Morgan") and OZ Management, L.L.C. ("OZManagement"), both on behalf of certain of their managed funds, in respect to anaggregate 36,743,330 SouthernEra Common Shares, representing approximately22.14% of the outstanding SouthernEra Common Shares. Under the lock-upagreements, the shareholders who are parties to the agreements have agreed totender their SouthernEra Common Shares to the Offer. JP Morgan and OZ Managementhave agreed to tender an aggregate 15,898,416 SouthernEra Common Shares to theOffer unconditionally, amounting to an aggregate 9.58% of the outstandingSouthernEra Common Shares (which, when combined with the SouthernEra CommonShares already held by Mwana, aggregates to 19.5% of the outstanding SouthernEraCommon Shares). JP Morgan and OZ Management have also agreed to tender anaggregate 20,844,914 SouthernEra Common Shares representing 12.56% of theoutstanding SouthernEra Common Shares, on terms permitting the withdrawal ofsuch SouthernEra Common Shares in certain circumstances involving a competingoffer or transaction, as contemplated in SouthernEra's shareholder rights plan.In the event of a competing offer or transaction that satisfies the requisitecriteria, Mwana has the right to match such offer. A copy of each lock-upagreement is available to the public and may be obtained on request from theCompany. "Mwana's strategy is to develop into a major resource group on the Africancontinent, exploiting opportunities across different countries and commodities,and focusing on being one of the most efficient and low cost producers inAfrica. The strategy includes partnering with industry majors on new projectsand also being a preferred vehicle for African investors and entrepreneurs. Theproposal to merge Mwana and SouthernEra will allow the management of Mwana toapply its skills to the projects owned by SouthernEra in the DRC and Angola"said Mr. Baring, Chairman of Mwana. Mwana holds exploration assets in a range of commodities in the DRC, Ghana andin Zimbabwe, as well as production assets in Zimbabwe and the DRC, and has beenactively building an African diamond exploration and production business. In May2006, Mwana acquired 20 per cent. of Societe Miniere de Bakwanga ('MIBA'), theDRC's leading diamond producer based in Mbuji Mayi, signalling its entry intothe diamond industry and significantly strengthening its interests in the DRC.Building on this, in November 2006 Mwana announced a proposed merger withGravity Diamonds Limited ("Gravity"), the diamond exploration business withvaluable exploration assets in the DRC, which is expected to complete during thesecond quarter of this year. "We look forward to SouthernEra's shareholders participating in the combinedgroup. We believe that Mwana's management has the drive, commitment andexperience to ensure that SouthernEra's various opportunities, in particular theBadibanga and Tshikapa projects in the Kasai region and Camafuca project inAngola, are developed in an economical and expeditious manner. The diamondconcessions of MIBA, Gravity and SouthernEra are contiguous in the DRC. Webelieve that, developed together, they would form a solid foundation for a majorAfrican diamond exploration and production business. This would be to thebenefit of both groups' shareholders." said Mr. Baring. Mwana has engaged Numis Securities Limited ("Numis") as financial adviser inconnection with the Offer. Canaccord Adams Limited acts as Nominated Adviser and Joint Broker to Mwana inthe United Kingdom. JP Morgan Cazenove Limited also acts as Joint Broker toMwana in the United Kingdom. Full details of the Offer will be included in a formal offer and take-over bidcircular to be mailed to SouthernEra shareholders (save where the directors ofMwana consider that it is necessary or desirable to exclude certain SouthernErashareholders in certain jurisdictions from the Offer). Mwana will formallyrequest a list of SouthernEra's shareholders and expects to mail the offer andtake-over bid circular to SouthernEra's shareholders as soon as reasonablypracticable following receipt of the shareholder list. The formal offer and take-over bid circular will be filed on SEDAR. SouthernErashareholders should read the circular and any other materials relating to theOffer, copies of which can be obtained at the SEDAR website at www.sedar.com(http://www.sedar.com). About Mwana Mwana is an AIM-listed pan-African natural resource company with a portfolio ofproducing and exploration assets in a range of commodities across Africa. Theseinclude producing nickel and gold mines in Zimbabwe, gold exploration projectsin Ghana and gold, zinc and copper-cobalt projects in the DRC. In May 2006, Mwana acquired 20 per cent. of Societe Miniere de Bakwanga('MIBA'), the country's leading diamond producer based in Mbuji Mayi, via itspurchase of Sibeka P/L, signalling its entry into the diamond industry andsignificantly strengthening its interests in the DRC. MIBA has produced anaverage of 6 million carats of diamonds per year over the past five years. In November 2006, Mwana announced a proposed merger with Gravity DiamondsLimited ("Gravity"), a diamond exploration company based in Australia and theDRC, to be effected pursuant to two schemes of arrangement (the first betweenGravity and its shareholders and the second between Gravity and its listedoptionholders). It is anticipated that, subject to the receipt of shareholder,optionholder and court approvals, the schemes will take effect during the secondquarter of this year. Mwana has a strong management team with many years of combined experience ofproject acquisition and development in Africa. Including SouthernEra's team ofexperienced explorers and developers, Mwana's directors anticipate that thecombined group will be well positioned to become a potent force in diamondexploration and development in Africa and Canada. Important Notice The Offer will not be made to, nor will deposits of SouthernEra Common Shares beaccepted from or on behalf of, U.S. persons or other holders of SouthernEraCommon Shares in any jurisdiction, including the United States, in which themaking of the Offer or the acceptance thereof would not be in compliance withthe laws of such jurisdiction or in which registration or other qualification ofMwana Ordinary Shares to be issued in the Offer would be required by applicablelaws of such jurisdiction. Persons who are resident in the United Kingdom should note that the Offer willnot be subject to the provisions of the United Kingdom Takeover Code. The content of this press release, which has been prepared by and is the soleresponsibility of Mwana, has been approved by Numis Securities Limited, TheLondon Stock Exchange Building, 10 Paternoster Square, London, England EC4M 7LS,solely for the purposes of section 21 of the United Kingdom's Financial Servicesand Markets Act 2000. Numis Securities Limited is acting exclusively for Mwanain connection with the Offer and no one else and will not be responsible toanyone other than Mwana for providing the protections afforded to clients ofNumis Securities Limited nor for providing advice in relation to the Offer orany other matter referred to in this press release. This announcement does not constitute or form part of any offer to sell orinvitation to purchase any securities or solicitation of an offer to buy anysecurities, pursuant to the Offer or otherwise. The Offer will be made solely bythe formal offer and take-over bid circular, which will contain the full termsand conditions of the Offer, including details of how the Offer may be accepted. This announcement is for information purposes and is not a substitute for theformal offer and take-over bid circular. Copies of the offer and take-over bidcircular and other materials relating to the Offer can be obtained when theybecome available free of charge at the SEDAR website at www.sedar.com (http://www.sedar.com). This Announcement may contain "forward looking statements" concerning, amongother things, the completion of anticipated transactions, the ability of theCompany to obtain future synergies or efficiencies from any combination, thetiming or success of further exploration and development activities and futureproduction by the Company. The words "expect", "will", "intend", "estimate" andsimilar expressions identify forward-looking statements. There can be noassurance that the plans, intentions or expectations upon which these forwardlooking statements and information are based will occur. "Forward lookingstatements" are subject to a variety of risks, uncertainties and assumptions.Some of the factors which could affect future results and could cause results todiffer materially from those expressed in the forward looking statements andinformation contained herein include: market prices, exploitation andexploration successes, continued availability of capital and financing andgeneral economic, market, business or governmental conditions. Forward-lookingstatements are based on the beliefs, estimates and opinions of management at thedate the statements are made and are subject to change without notice. TheCompany does not undertake to update forward-looking statements if managementbelieves, estimates or opinions or other circumstances should change. TheCompany also cautions potential investors that mineral resources that are notmaterial reserves do not have demonstrated economic viability. For further information visit our web site at (http://www.mwanaafrica.com/). Neither the Toronto Stock Exchange nor the London Stock Exchange has reviewedand does not accept responsibility for the adequacy or accuracy of this release. Enquiries: Oliver Baring, Chairman Tel. +44 20 7654 5588Kalaa Mpinga, CEO or David Fish, CFO Tel. +27 11 883 9550/1Mwana Africa plc Devon House12-15 Dartmouth StreetLondonSW1H 9BL A copy of the early warning report filed by the Company pursuant to Canadiansecurities laws can be obtained from the individuals identified above at Mwana. John Harrison, Managing DirectorNumis Securities Limited Tel. +44 20 7260 1000 Mark Ashurst, Managing DirectorCanaccord Adams Limited Tel. +44 20 7050 6500 Tom Randell or Maria SuleymanovaMerlin, PR Tel. +44 20 7653 6620 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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