| Tue 10 Jun 2008, 8:43 | | GPL - Grand Parade Investments Limited - Acquisition of additional 7.56% in |
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GPL - Grand Parade Investments Limited - Acquisition of additional 7.56% in
Real Africa Holdings Limited ("RAH")
Grand Parade Investments Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1997/003548/06 )
Share code: GPL ISIN: ZAE000119814
("GPI" or "the company")
ACQUISITION OF ADDITIONAL 7.56% IN
REAL AFRICA HOLDINGS LIMITED ("RAH")
1. INTRODUCTION
The board of directors of GPI ("the Board") takes great pleasure in
announcing
the acquisition of an additional 27 321 561 RAH ordinary shares ("the
additional RAH acquisitions"), representing 7.56% of the issued ordinary
share
capital in RAH ("the additional RAH shares").
The additional RAH shares were acquired in three transactions, which can be
summarised as follows, and collectively referred to as the additional RAH
acquisitions:
1.1 From certain identified minority shareholders in RAH, GPI acquired
17 711 456 RAH shares (or 4.90% in RAH) as part of the RAH offer, as referred
to in the abridged pre-listing statement published on SENS on 16 May 2008
("the
abridged pre-listing statement"), and as more fully disclosed in the pre-
listing statement posted to GPI shareholders on 19 May 2008 ("the pre-listing
statement") ("the RAH offer"), which offer was extended by the Board on 05
June
2008 ("the extended RAH offer") to such identified RAH minorities only;
1.2 From certain identified minority shareholders in RAH, GPI acquired
3 435 709 RAH shares (or 0.95% in RAH), in aggregate, in a share-for-share
transaction ("the share-for-share transaction"); and
1.3 In the open market, GPI acquired 6 174 396 RAH shares (or 1.71% in RAH)
("the market purchases").
In terms of the RAH offer, GPI has already acquired 23.01% in RAH, and the
additional RAH acquisitions will see its shareholding in RAH increase to
30.57%.
2. RATIONALE FOR THE ADDITIONAL RAH ACQUISITIONS
The additional RAH acquisitions pro vide the Board with an opportunity to
increase its interest in RAH beyond the critical threshold of 25% such that
GPI
will be able to exert significant influence as a material shareholder in RAH.
It further endorses GPI`s strategy to acquire quality assets in the gaming
sector.
3. DESCRIPTION OF RAH AND ITS INVESTMENTS
Full details of RAH and its operations appeared in the abridged pre-listing
statement and Annexure 18 of the pre-listing statement. The RAH offer and the
additional RAH acquisitions are regarded as being key steps in establishing
GPI
as a national gaming player. They have provided GPI with an opportunity to
diversify and increase its South African footprint. The JSE-listed RAH, has
its core investments in gaming assets in the Western Cape, KwaZulu-Natal,
Gauteng and the Eastern Cape. These include interests in four well-known
casinos, being Carnival City, Sibaya, Boardwalk and GrandWest. In addition,
RAH
has interests in the management companies of each of the aforementioned
casinos, as well as Sun International Limited`s national casino management
company. Together with RAH`s recent acquisition of a stake in the Worcester
Casino, the RAH offer and the additional RAH acquisitions mean that GPI has
entrenched and strengthened its holdings in its existing investments,
including
its exposure to the lucrative SunWest International (Pty) Ltd.
4. TERMS AND CONDITIONS OF THE EXTENDED RAH OFFER
4.1 GPI has received written acceptances from certain financial institutions
and stock brokers, namely, Ellerine Bros (Pty) Ltd, RST Nominees (Pty) Ltd,
Prudential Portfolio Managers (Pty) Ltd and Easy Nominees (Pty) Ltd,
representing approximately 293 RAH minority shareholders, who are disposing
of
17 711 456 RAH shares in aggregate in terms of the extended RAH offer.
4.2 The terms and conditions of the extended RAH offer remain exactly the
same
as set out in Annexure 18 of the pre-listing statement, save for the
following, as approved by the Board on 05 June 2008:
4.2.1 the extension of the closing date of the offer period to 05 June 2008;
4.2.2 the waiving of the minimum acceptance threshold by RAH minority
shareholders of 10% of the issued share capital of RAH; and
4.2.3 the waiving of the maximum acceptance threshold of 25% of GPI`s
estimated market capitalisation on listing date, being 06 June 2008.
4.3 All conditions precedent in respect of the extended RAH offer have been
fulfilled, save for the written confirmation to GPI from the aforementioned
RAH
minority shareholders that 35% of the GPI scrip to be issued to them as part
of the extended RAH offer consideration will be "locked-in" and issued to
certain BEE parties by way of renounceable letters of allotment, and GPI
confirming the approval by the JSE of the listing of the new GPI shares to be
issued to the RAH minorities in accordance with paragraph 4.4 below. It is
anticipated that such conditions precedent will be fulfilled on or before
19 June 2008. The effective date in respect of the extended RAH offer will
be the date upon which the aforegoing conditions precedent are fulfilled.
4.4 The purchase consideration of R5.46 per each additional RAH share
acquired
in terms of the extended RAH offer, being R96 704 549.76 in aggregate, will
be
settled in exactly the same manner as previously disclosed in the pre-listing
statement, such that:
4.4.1 15% of the extended RAH offer consideration will be paid in cash; and
4.4.2 the balance thereof will be settled through the issue of GPI shares
(being 16 948 218 ordinary GPI shares with a par value of R0.00025 each in
total) at an issue price of R4.85 per GPI share;
4.5 In order to maintain the BEE status of GPI`s shareholder base, a
condition
to both the RAH offer, and the extended RAH offer, is that those RAH minority
shareholders who validly accept the extended RAH offer must be able to
successfully renounce and sell at least 35% of their rights to subscribe for
the GPI shares to which they are entitled in terms of 4.4.2 above, to a
suitably qualified BEE entity(ies) ("the locked-in GPI shares"). The locked-
in GPI shares will, once issued to such BEE entity(ies), be subject to
restrictions on the trading thereof and may only be sold to other qualifying
BEE entities.
5. TERMS AND CONDITIONS OF THE SHARE-FOR SHARE TRANSACTION
5.1 GPI has receive d written acceptances from certain financial
institutions,
namely, 36ONE Asset Management (Pty) Ltd and Visio Capital Management (Pty)
Ltd, representing approximately 31 RAH minority shareholders who are
disposing
of 3 435 709 RAH shares in terms of the share-for-share transaction.
5.2 The purchase consideration of R5.46 per each RAH share, being
R18 758 971.14 in aggregate, will be settled through the issue of GPI shares
(being 3 663 860 ordinary GPI shares with a par value of R0.00025 each in
total) at an issue price of R5.12 per GPI share.
5.3 All conditions precedent in respect of the share-for-share transaction
have been fulfilled, save for GPI confirming the approval by the JSE of the
listing of the new GPI shares to be issued to the RAH minorities in
accordance
paragraph 5.2 above. It is anticipated that such condition precedent will be
fulfilled on or before 19 June 2008. The effective date in respect of the
share-for-share transaction will be the date upon which the aforegoing
condition precedent is fulfilled.
6. MARKET PURCHASES
During the period after the issue of the pre-listing statement until 06 June
2008, GPI has acquired 6 174 396 additional RAH ordinary shares (or 1.71% in
RAH) in the open market at an average price of R4.98 per RAH share (including
brokerage and other related costs).
7. FINANCIAL EFFECTS OF THE ADDITIONAL RAH ACQUISITIONS
The pro forma financial effects of the additional RAH acquisitions on GPI`s
unaudited pro forma earnings and headline earnings per share as disclosed in
Annexure 8 of the pre-listing statement, had the transaction been entered
into
on 1 July 2006, and the pro forma financial effects on GPI`s unaudited pro
forma net asset value per share and tangible net asset value per share for
the
year ended 30 June 2007, as disclosed in Annexure 8 of the pre-listing
statement, had the additional RAH acquisitions been implemented on that date,
are set out in the table below.
The pro forma financial information is presented below for illustrative
purposes only and because of its nature may not give a fair reflection of
GPI`s financial position nor of the effect on future earnings after the
implementation of the additional RAH acquisitions.
The unaudited pro forma financial effects of the additional RAH acquisitions
are based on the unaudited consolidated pro forma financial information as
disclosed in Annexure 8 of the pre-listing statement. The directors of GPI
are
responsible for the preparation of the unaudited pro forma financial
information.
Unaudited Pro forma
pro forma before after the
additional additional RAH Change
acquisitions (1) acquisitions (3) (%)
Earnings per share (2) 243.47 234.76 (3.58)
Headline earnings per share (2) 30.70 31.41 2.31
Net asset value per share (2) 396 402 1.52
Net tangible asset value
per share (2) 396 402 1.52
Notes and assumptions:
(1) Extracted from the unaudited pro forma consolidated financial information
of the GPI group as set out in Annexure 8 of the pre-listing statement.
(2) Based on a weighted average number of GPI shares in issue of 465 932 546
at 30 June 2007. Represents the acquisition of 27 321 561 ordinary shares in
RAH which represents 7.56% of RAH`s share capital. In consideration for the
acquisition of the RAH shares, GPI issued 20 612 078 GPI shares and paid
R45 270 324.86 cash.
(3) It has been assumed that the extended RAH offer was effected on
1 July 2006.
8. EFFECT OF ADDITIONAL RAH ACQUISITIONS ON GPI`S INVESTMENT PORTFOLIO
The table below, as extracted from the pre-listing statement represents a
summary of GPI`s current investment portfolio, with the final column
representing the effect of the additional RAH acquisitions:
% interest Number of Current market
in company shares held value of
by GPI interest
(R`m)6
SunWest International
(Pty) Ltd 26,41 4 399 241 1 650
Thuo Gaming Western Cape
(Pty) Ltd (Grandslots) 25,10 2 510 45
Worcester Casino (Pty) Ltd
(Golden Valley) 36,70 3 800 000 47
National Casino Resort
Manco (Pty) Ltd 5,67 57 12
Western Cape Casino
Resort Manco (Pty) Ltd 50,00 1 148
Akhona Gaming Portfolio
Investments (Pty) Ltd 50,00 100 200 16
Cash - - 87
RAH 4 30,57 110 535 507 604
% of GPI % of GPI
investment investment
portfolio portfolio
after RAH after
offer additional
RAH
acquisitions5
SunWest International
(Pty) Ltd 65.89 63.26
Thuo Gaming Western Cape
(Pty) Ltd (Grandslots) 1.80 1. 73
Worcester Casino (Pty) Ltd
(Golden Valley) 1.88 1.80
National Casino Resort
Manco (Pty) Ltd 0.48 0.46
Western Cape Casino
Resort Manco (Pty) Ltd 5.91 5.67
Akhona Gaming Portfolio
Investments (Pty) Ltd 0.64 0.61
Cash 5.27 3.32
RAH 4 18.13 23.14
Notes
(1) All income derived by GPI`s investment portfolio is dividend income, save
for available cash, which accrues interest at market related interest rates.
Approximately 94,3% of GPI`s income is derived from dividends, the remaining
is
generated from interest earned.
(2) Save for RAH which is listed on the JSE, all of GPI`s investments are in
unlisted entities.
(3) All of GPI`s investments may be classified as broadly falling within the
gaming, leisure and hospitality sectors.
(4) The RAH offer became unconditional upon the JSE having approved the
listing of GPI on Friday, 6 June 2008. The additional RAH acquisitions will
become unconditional upon fulfilment of the conditions precedent as set out
in
paragraphs 4.3 and 5.3 above.
(5) Accordingly, the final column of the table above sets out the effect on
GPI`s investment portfolio after the implementation of the additional RAH
acquisitions, based on the writ ten acceptances that have been received and
assuming that all conditions precedent have been fulfilled.
(6) Valuation of investments by the board as at the last practicable date in
the pre-listing statement, being Monday, 12 May 2008. These values are a
pproximate values as determined by the board at the time.
10 June 2008
Cape Town
Sponsor
PSG CAPITAL (PTY) LTD
Corporate Adviser
LEAF CAPITAL (PTY) LTD
Date: 10/06/2008 08:43:01 Produced by the JSE SENS Department.
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