However‚ no job cuts were expected‚ he told a media briefing. He also said the plan was not to asset strip Avusa but to build it.
"What we are trying to do is not an asset strip ... we are a builder‚" he told a news briefing.
There was also no plan to sell any of media group's assets if Mvela succeeded with its R24 per share offer‚ he added.
He said the plan was to turn Avusa around and if everything was done right there should be a turnaround in 18 months.
According to Bonamour‚ there was some wasteful expenditure that needed to be looked at, but it was at the top.
"Avusa has not only underperformed the market it's underperformed its peers‚" he added.
The cash and share offer announced by Mvela on Tuesday‚ which is being made through its wholly owned subsidiary‚ Richtrau No. 229 (Proprietary) Limited.
Blackstar Group SE‚ a listed investment company that controls 28% of Mvela Group‚ is the arranger and promoter of the transaction and will assist management in driving the turnaround strategy in Avusa.
The transaction comprises a series of interconditional steps that will result in Richtrau becoming a listed entity on the JSE‚ housing all of Avusa's assets.
Upon listing‚ Richtrau will have a smaller board (maximum of nine people) that will consist of an independent chairperson and other experienced business professionals to support management and provide the necessary strategic guidance to the business.
Richtrau has chosen Colin Cary as the new head of Avusa following the conclusion of the proposed transaction. Cary‚ who is currently managing director of Avusa Retail Solutions‚ is the founder and former CEO of Hirt and Carter‚ which Avusa acquired with UHC in November 2010.
Richtrau has secured irrevocable undertakings from a number of key Avusa shareholders to vote in favour of the offer‚ which shareholders collectively hold 65.0% of those Avusa shares eligible to vote at the scheme meeting.
News of the offer saw Avusa's share price spike 12.93% or 265 cents to R23.15 per share - just 85 cents shy of the cash offer. The stock ended the session 8.83% or 181 cents higher at R22.31.
Mvelaphanda Group‚ which owns about 21% of Avusa‚ announced on Tuesday that it is making a cash and share offer to acquire all the shares in issue in the media and entertainment company that it does not already own in a deal worth about R3bn.
The cash offer of R24 per Avusa share is being made through Mvela's wholly owned subsidiary‚ Richtrau No. 229 (Proprietary) Limited.
Blackstar Group SE‚ a listed investment company that controls 28% of Mvela Group‚ is the arranger and promoter of the transaction and will assist management in driving the turnaround strategy in Avusa.
The transaction comprises a series of interconditional steps that will result in Richtrau becoming a listed entity on the JSE‚ housing all of Avusa's assets.
Andrew Bonamour‚ CEO of Blackstar Group (Pty) Ltd and Interim CEO of Mvelaphanda Group Limited‚ said: "The transaction presents a unique opportunity to consolidate South Africa's leading media and entertainment company through a single listed entity‚ and to partner with a strong management team in accelerating a turnaround and new growth strategy for the business. This transaction further demonstrates the value unlock strategy for Mvela Group shareholders‚ which has been my key objective since becoming interim CEO."
The offer comprises a cash offer of R24 per Avusa ordinary share and a share exchange of Avusa ordinary shares (or a portion thereof) for ordinary shares in Richtrau.
The cash offer represents a premium of 19.6% to the Avusa 30 day volume weighted average price (VWAP) per ordinary share of R20.07 as at close of business on 11 June 2012. The share exchange ratio is 1.478 Richtrau ordinary shares for every one Avusa ordinary share. The exchange ratio is based on Richtrau's net asset value (existing Avusa ordinary shares owned plus cash less debt) and Avusa's 30-day VWAP of R20.07.
In order to fund the cash offer‚ Mvela Group is injecting R480m of equity into Richtrau and raising R650m of bridge funding to finance the cash offer to Avusa shareholders.
In terms of the composite transaction‚ Richtrau proposes to implement the offer through a scheme of arrangement‚ the listing of all the ordinary shares of Richtrau on the JSE and Mvela Group unbundling its shares in Richtrau to its shareholders.
Upon listing‚ Richtrau will have a smaller board (maximum of 9 people) that will consist of an independent chairperson and other experienced business professionals to support management and provide the necessary strategic guidance to the business.
Richtrau has chosen Colin Cary as the new head of Avusa following the conclusion of the proposed transaction. Cary‚ who is currently managing director of Avusa Retail Solutions‚ is the founder and former CEO of Hirt and Carter‚ which Avusa acquired with UHC in November 2010.
Bonamour said: "The intention is for the management of Avusa to drive a more collaborative approach to achieve cross-selling and synergy benefits between the businesses and accelerate Avusa's cost savings and turnaround strategy. Blackstar has agreed to remain invested in Avusa for a minimum period of three years to ensure that the operational turnaround is achieved."
Richtrau has secured irrevocable undertakings from a number of key Avusa shareholders to vote in favour of the offer‚ which shareholders collectively hold 65.0% of those Avusa shares eligible to vote at the scheme meeting.
The scheme circular is expected to be sent to Avusa shareholders around 16 July 2012 with the salient dates in relation to the scheme to be published in the media prior to posting the circular.
Commenting on the offer‚ Avusa said it provided Avusa reholders with the flexibility to realise their shareholding in Avusa at a substantial premium and/or continue to retain their shareholding in Avusa through listed Richtrau shares.
It added that Avusa would be delisted from the JSE and Richtrau would be listed on the bourse and unbundled to Mvela's shareholders‚ pursuant to the transaction.
Mike Robertson - Acting Group CEO of Avusa Limited and MD of the Avusa Media Division said: "The independent board of Avusa is supportive of the transaction and the flexibility offered to shareholders under the offer‚ subject to a fair and reasonable assessment by our appointed independent advisers Ernst & Young.
"The new shareholders have committed to upholding and abiding by the spirit and principles of the Avusa Media Editorial Charter‚ which promotes a free media and editorial independence.
"We look forward to working with Blackstar and the new shareholders of Avusa towards positioning the group to capitalise on its key competitive strengths and execute on future growth opportunities‚" Robertson added.
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