| Wed 6 Jun 2007, 14:00 | | SUI - Sun International - Share buy-back by way of |
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SUI
SUI
SUI - Sun International - Share buy-back by way of a Scheme of Arrangement
SUN INTERNATIONAL LIMITED
(Registration number 1967/007528/06)
Share code: SUI ISIN: ZAE000070678
("Sun International" or "the company")
SHARE BUY-BACK OF A PRO-RATA PORTION OF SUN INTERNATIONAL ORDINARY SHARES BY WAY
OF A SCHEME OF ARRANGEMENT
1 INTRODUCTION
Sun International shareholders are hereby advised that Sun International and its
wholly owned subsidiary, Sun International Investments No. 2 Limited ("Sun
International Investments No. 2"), will acquire, in terms of sections 85 and 89
of the Companies Act, 1973, as amended, ("the Act"), a pro rata portion of the
company`s ordinary shares in issue, other than shares held by Dinokana
Investments (Proprietary) Limited ("Dinokana"), the Sun International Employee
Share Trust (to the extent that the trustees agree thereto in writing), Sun
International Investments No. 2 and the participants in the Sun International
Deferred Bonus Plan 2005 (collectively "the excluded shareholders") by way of a
scheme of arrangement in terms of section 311 of the Act ("the scheme").
2 THE TERMS OF THE SCHEME
2.1 Salient features
The salient features of the scheme are that, subject to the conditions
precedent set out in paragraph 3 below, the holders of ordinary shares in
the issued share capital of Sun International ("Sun International ordinary
shares"), other than the excluded shareholders, who are recorded in the
register of Sun International at the close of business on the record date
of the scheme ("scheme participants"), which date is expected to be Friday,
27 July 2007, ("the scheme record date"), will dispose of 16 Sun
International ordinary shares per 100 Sun International ordinary shares
held by each scheme participant on the scheme record date ("the scheme
shares") to Sun International and Sun International Investments No. 2 in
return for the payment of R145,35 for each scheme share disposed of ("the
scheme consideration"). The scheme consideration is based on the 30 day
volume weighted average trading price of a Sun International share on the
JSE Limited ("the JSE") up to Friday, 25 May 2007 being the last
practicable date prior to the finalisation of the circular to Sun
International shareholders.
If the scheme is implemented, it is expected that a total of approximately
16 084 895 Sun International ordinary shares (or such lesser or greater
number of shares that results from the rounding up or down to the nearest
whole number of fractions of Sun International ordinary shares to be
acquired) will be acquired by Sun International and Sun International
Investments No. 2 for an aggregate consideration of R2 338 million. At the
last practicable date, 16 084 895 Sun International ordinary shares
represent 16,0% of the issued ordinary share capital of Sun International,
after excluding the Sun International ordinary shares held by the excluded
shareholders (13,8% of the total Sun International shares in issue).The
scheme shares acquired by Sun International (being approximately 11 303 750
Sun International ordinary shares) will be cancelled in terms of section
85(8) of the Act. The balance of the scheme shares will be held by Sun
International Investments No. 2 as treasury shares.
2.2 Rationale
The Sun International group has experienced significant growth in the value
of its operations and as a result of strong cash flows and debt repayments,
the level of gearing has reduced significantly. In light of the above the
board mandated management to assess ways of optimising the capital
structure of the Sun International group.
Following a detailed analysis of the capital structure of the Sun
International group taking cognisance of existing and affordable debt
levels, it has been proposed that additional gearing be raised by the Sun
International group and the funds used to buy back Sun International
ordinary shares. This will result in the maximisation of returns to
shareholders through a more optimal balance sheet structure.
The scheme, if implemented, will result in all Sun International ordinary
shareholders (other than the excluded shareholders) being treated equally.
As Dinokana and the Sun International Employee Share Trust (to the extent
that this trust consents in writing to be excluded) will not participate in
the scheme their effective shareholding in Sun International will increase
as a result of the scheme, thereby further enhancing the BEE status of Sun
International.
2.3 Order of Court
The High Court of South Africa (Witwatersrand Local Division) ("the Court")
has ordered that a meeting in terms of section 311(1) of the Act ("the
scheme meeting") of the Sun International ordinary shareholders, other
than the excluded shareholders, ("scheme members") recorded in the register
at the close of business on Wednesday, 27 June 2007 ("voting record date"),
be convened for the purposes of considering, and if deemed fit, approving,
with or without modification, the scheme.
3 CONDITIONS PRECEDENT
The scheme is subject to the fulfilment of the following conditions precedent
before it becomes operative:
3.1 the special resolution approving Sun International`s acquisition of certain
of the scheme shares being duly passed at a general meeting of Sun
International shareholders ("the general meeting") in accordance with the
Act and the Listings Requirements of the JSE, and the registration of such
special resolution by the Registrar of Companies;
3.2 the special resolution approving Sun International Investments No. 2`s
acquisition of certain of the scheme shares being duly passed at the
general meeting in accordance with the Listings Requirements of the JSE,
and the registration of such special resolution by the Registrar of
Companies;
3.3 the scheme being approved at the scheme meeting by a majority representing
not less than three-fourths of the votes exercisable by scheme members
present and voting in person or by proxy;
3.4 the Court sanctioning the scheme; and
3.5 a certified copy of the Order of Court sanctioning the scheme being r
egistered by the Registrar in terms of the Act.
4 JSE LISTING
The scheme shares acquired by Sun International (being approximately 11 303 750
Sun International ordinary shares) will be cancelled and accordingly application
will be made for the delisting of these shares from the JSE from the
commencement of business on the operative date of the scheme, which is expected
to be Monday, 30 July 2007.
5 FINANCIAL EFFECTS
The table below sets out the unaudited pro forma financial effects of the scheme
on the unaudited earnings, headline earnings and adjusted headline earnings of
Sun International for the six months ended 31 December 2006 and the net asset
value at that date.
The unaudited pro forma financial effects have been prepared for illustrative
purposes only, in order to provide information on how the scheme might affect
the financial results and position of a Sun International ordinary shareholder
and, because of their nature, may not give a true reflection of the actual
financial effects of the scheme. The pro forma financial effects have been
calculated on the basis set out below.The pro forma financial effects are the
responsibility of the directors.
Per Sun International Note Before After %
ordinary share the the change
scheme scheme
(cents) (cents)
Earnings 1 440 397 (9.8)
Headline earnings 1 503 471 (6.4)
Adjusted headline earnings 2 334 276 (17.4)
Net asset value 3,4 2 190 (53) -
Notes:
1 The "Before" column reflects the earnings and headline earnings per
Sun International share for the six months ended 31 December 2006,
calculated on the basis of the weighted average number of 105,1
million Sun International ordinary shares in issue throughout the
period. The "After" column assumes that the scheme was implemented
with effect from 1 July 2006, calculated on the basis of a weighted
average number of 89,0 million Sun International ordinary shares in
issue and assuming interest payable for six months on the R2 338
million payment to Sun International shareholders at an after-tax
interest rate of 75% of the ruling prime rate.
2 The "Before" column reflects the adjusted headline earnings per Sun
International share for the six months ended 31 December 2006,
calculated on the basis of the weighted average number of 111,6
million Sun International ordinary shares in issue throughout the
period, The "After" column assumes that the scheme was implemented
with effect from 1 July 2006, calculated on the basis of a weighted
average number of 95,5 million Sun International ordinary shares in
issue and assuming interest payable for six months on the R2 338
million payment to Sun International shareholders at an after-tax
interest rate of 75% of the ruling prime rate.
3 The "Before" column reflects the net asset value per Sun International
share at 31 December 2006, and is based on 104.6 million Sun
International ordinary shares in issue at 31 December 2006. The
"After" column assumes that the scheme was implemented on 31 December
2006, calculated on the basis of 88.5 million Sun International
ordinary shares in issue.
4 The net asset value per Sun International share at 30 June 2007 is
expected to be positive.
6 TAX IMPLICATIONS FOR SCHEME PARTICIPANTS
Scheme participants are advised that a portion of the scheme consideration will,
for the purposes of the Income Tax Act, 1962 as amended ("Income Tax Act"),
constitute a dividend. Further details of the composition of the scheme
consideration for purposes of the Income Tax Act will be set out in the circular
to be posted to Sun International shareholders on or about 7 June 2007.
7 SALIENT DATES OF THE SCHEME
2007
Last day to trade Sun International ordinary Wednesday, 20 June
shares on the JSE in order to be recorded in the
register of Sun International or in the sub-
registers of Sun International administered by
CSDPs to vote at the scheme meeting (see note 1
below)
Voting record date for scheme meeting Wednesday, 27 June
Last day to lodge forms of proxy for the scheme Thursday, 28 June
meeting (by 10:00) (see note 2 below) and the
general meeting (by 10:30)
Scheme meeting held (at 10:00) Friday, 29 June
General meeting held (at 10:30 or 10 minutes Friday, 29 June
after the conclusion or adjournment of the
scheme meeting, whichever is later)
Publish results of the scheme meeting and Friday, 29 June
general meeting on SENS (expected date)
Publish results of the scheme meeting and the Monday, 2 July
general meeting in the press (expected date)
Court hearing to sanction the scheme (at 10:00 Tuesday, 10 July
or as soon thereafter as Counsel may be heard)
Publish results of Court hearing on SENS Tuesday, 10 July
Publish results of Court hearing in the press Wednesday, 11 July
If the scheme is sanctioned and becomes
effective:
Last day to trade in existing Sun International Friday, 20 July
ordinary shares on the JSE in order to be
recorded in the register of Sun International or
in the sub-registers of Sun International
administered by CSDPs to participate in the
scheme
Shares will trade under the new ISIN Monday, 23 July
ZAE000097580 at commencement of trade
Shares will trade "ex" the scheme Monday, 23 July
Record date of the scheme to determine Friday, 27 July
participation in the scheme
Operative date of the scheme from the Monday, 30 July
commencement of business
Scheme consideration transferred or posted and Monday, 30 July
new share certificates posted to certificated
scheme participants (if documents of title are
received on or prior to 12:00 on the record date
of the scheme) or, failing that, within five
business days of receipt of the relevant Monday, 30 July
documents of title by the transfer secretaries
Dematerialised scheme participants will have the
scheme consideration credited to their account
held at their CSDP or broker
Notes
1 Shareholders should note that, as Sun International ordinary shares
now settle in the Strate environment, settlement for trade takes place
five business days after trade. Therefore, Sun International ordinary
shareholders who acquire Sun International ordinary shares after
Wednesday, 20 June 2007 will not be eligible to vote at the scheme
meeting.
2 If a form of proxy is not received by the time and date shown above,
it may be handed to the chairman of the scheme meeting by no later
than 10 minutes before the scheme meeting is due to commence (or
recommence, if adjourned).
3 No dematerialisation or rematerialisation of existing Sun
International ordinary shares will take place after Friday, 20 July
2007. Dematerialisation and rematerialisation of Sun International
ordinary shares under the new ISIN ZAE000097580 will re-commence after
Monday, 30 July 2007.
4 Any change to the above dates and times will be agreed upon by Sun
International and Sun International Investments No. 2 and advised to
shareholders by notification on SENS and in the press.
5 All times indicated above are South African times.
8 OPINIONS, RECOMMENDATIONS AND UNDERTAKINGS
The directors of Sun International have considered the terms and conditions of
the scheme and are of the opinion that those terms and conditions are in the
best interests of the Sun International ordinary shareholders. Accordingly, the
board of directors of Sun International supports the scheme and recommends that
Sun International shareholders vote in favour of the scheme and the resolutions
to be proposed at the general meeting. The directors of Sun International who
hold Sun International ordinary shares intend to vote in favour of the scheme at
the scheme meeting and the resolutions to be proposed at the general meeting in
respect of their own holdings of Sun International ordinary shares (with the
exception of shares which they may hold as excluded shareholders).
Allan Gray Limited ("Allan Gray"), holding approximately 12,8% of the issued
ordinary share capital of Sun International, in respect of which Allan Gray has
an absolute discretion to vote, has indicated their support for the scheme and
has irrevocably undertaken to vote in favour of the scheme and the resolutions
to be proposed at the general meeting.
In addition Allan Gray has undertaken to recommend to certain of its clients on
behalf of which it manages Sun International shares, holding approximately 26,3%
of the issued ordinary share capital of Sun International, to vote in favour of
the scheme and the resolutions to be proposed at the general meeting.
9 NOTICE OF MEETINGS
The scheme meeting has been convened for Friday, 29 June 2007 at 10:00, at the
registered office of Sun International, in the boardroom, 4th Floor, 27 Fredman
Drive, Sandown, Sandton. The general meeting is to be held at the same venue at
10:30, on Friday, 29 June 2007, or 10 minutes after the conclusion or
adjournment of the scheme meeting, whichever is the later.
10 DOCUMENTATION
The documentation relating to the scheme, which contains, inter alia, the notice
of the scheme meeting and the notice of general meeting, will be posted to Sun
International shareholders on or about 7 June 2007.
Sandton
6 June 2007
Investment Bank
(Investec Corporate Finance)
Sponsor
(Investec)
Corporate law adviser
(Edward Nathan Sonnenberg)
Reporting accountants
(PWC)
Date: 06/06/2007 14:00:00 Produced by the JSE SENS Department.
