| Mon 15 Oct 2007, 12:00 | | SUI - Sun International Limited - Restructure Of O |
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SUI
SUI
SUI - Sun International Limited - Restructure Of Ownership In Sunwest
Sun International Limited
(Incorporated in the Republic of South Africa)
(Registration number 1967/007528/06)
Share code: SUI & ISIN: ZAE000097580
("Sun International")
Restructure of ownership in SunWest International (Proprietary) Limited
("SunWest")
1. The proposed transactions
Sun International currently holds an effective interest of 67,6% in SunWest
which operates the GrandWest casino and the Table Bay Hotel in Cape Town. Grand
Parade Investments Limited ("GPI") holds an effective interest of 19,8% in
SunWest.
Sun International shareholders are advised that Sun International`s indirectly
wholly owned subsidiary Sun International (South Africa) Limited ("SISA") has
entered into agreements with GPI to facilitate the following:
- the sale of 20 019 N ordinary shares ("N shares") and 540 127 ordinary
shares ("O shares") to GPI being a 4,0% shareholding in SunWest for a
purchase consideration of R83,4 million;
- the granting of an option to GPI to acquire a further 344 821 N shares
(2,46% of the SunWest shares in issue) from SISA. If these shares are
acquired by GPI before 31 December 2007 the purchase consideration will be
R425 per share. If implemented at a later date the purchase consideration
will be determined at that date based on an independent third party
valuation of SunWest; and
- the granting by SunWest of options over 700 182 new N shares (5% of the
current SunWest shares in issue) ("SunWest options") at a strike price of
R165 per SunWest share to GPI exercisable by 29 June 2010.
The granting of the SunWest options is conditional on the implementation
and successful maintenance of a lock-in of a black economic empowerment
("BEE") shareholding within GPI of at least 25% and up to 35% until 29 June
2012 ("lock-in BEE shareholding"). The SunWest options will be granted to
GPI on a sliding scale, such that should GPI achieve a lock-in BEE
shareholding of 25% it will be entitled to 500 131 of the SunWest options
with the maximum of 700 182 SunWest options being exercisable by GPI should
it achieve a 35% lock-in BEE shareholding.
(the above transactions are collectively referred to as "the GPI
transactions")
2. Rationale
The GPI transactions will reduce Sun International`s effective interest in
SunWest to 58,3% and increase GPI`s shareholding to 29,8% which will ensure that
SunWest has an appropriate level of empowerment. In addition, voting control
will be returned to BEE shareholders through GPI, although all major decisions
have always required the support and consent of the two major shareholders, SISA
and GPI.
3. Unaudited pro forma financial effects of the GPI transactions
The unaudited pro forma financial effects set out below have been prepared for
illustrative purposes only to assist Sun International shareholders to assess
the impact of the GPI transactions on the earnings per share ("EPS"), headline
earnings per share ("HEPS"), diluted adjusted HEPS and net asset value per share
("NAV per share") of Sun International.
These unaudited pro forma financial effects have been disclosed in terms of the
JSE Limited ("JSE") Listings Requirements and because of their nature may not
fairly present Sun International`s financial position, changes in equity,
results of operations or cash flows. The unaudited pro forma financial effects
are the responsibility of the directors of Sun International.
Notes Before the GPI After the GPI % Change
transactions transactions
(cents) (cents)
EPS 1, 2 761 648 -14,8%
HEPS 1, 2 829 716 -13,6%
Diluted adjusted HEPS 1 719 704 -2,1%
NAV per share 3 22,45 24,43 8,8%
Notes
1. The "Before" column represents the EPS, HEPS and diluted adjusted HEPS of
Sun International for the year ended 30 June 2007. The "After" column
assumes that the GPI transactions were implemented on 1 July 2006.
2. Included in the adjustment to earnings is the group`s share of a BEE charge
in respect of the transactions of R109 million.
2. The "Before" column reflects the NAV per share of Sun International as at
30 June 2007. The "After" column assumes the GPI transactions were
implemented on 30 June 2007.
4. Conditions precedent
The GPI transactions are subject to the fulfilment of certain conditions
precedent including inter alia,
- the obtaining of all necessary regulatory approvals, including the approval
by the JSE and the Western Cape Gambling and Racing Board; and
- the obtaining of any necessary approval by the Competition Authorities.
5. Related party transaction and fair and reasonable opinion
GPI currently owns as its main asset 2 774 000 SunWest shares equating to +/-
19,8% of the SunWest shares in issue. In terms of the Listings Requirements of
the JSE, Sun International shareholders are advised that as GPI is a material
shareholder of one of Sun International`s subsidiaries, GPI is deemed to be a
related party to Sun International and the proposed transactions are deemed to
be a "small related party transaction".
On 10 October 2007 Deloitte & Touche therefore delivered to the JSE an opinion
to the effect that, as of the date of the opinion and based upon and subject to
the factors and assumptions detailed in its letter, the terms and conditions of
the proposed transactions are fair and reasonable to Sun International
shareholders. ("the Fair and Reasonable Opinion"). The Fair and Reasonable
Opinion will be available for inspection at the registered office of Sun
International during normal business hours for a period of 28 days from the date
of this announcement.
Investment Bank
(Investec Corporate Finance)
Sponsor
(Investec Bank)
Sandton
15 October 2007
Date: 15/10/2007 12:00:02 Produced by the JSE SENS Department.
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