| Tue 10 Jun 2008, 10:54 | | VUN - Vunani - Acquisition And Renewal Of Cautionary Announcement |
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VUN
VUN
VUN - Vunani - Acquisition And Renewal Of Cautionary Announcement
VUNANI LIMITED
(formerly Vunani Capital Holdings (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1997/020641/06)
(JSE code: VUN & ISIN: ZAE000110359)
("Vunani" or "the Company")
ACQUISITION OF A FURTHER 35% STAKE IN EDGE HOLDING COMPANY (PROPRIETARY)
LIMITED ("EDGE") AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcement, dated 30 May
2008, and are advised that a Sale of Shares Agreement has been entered
into between Northern Ocean Investments 48 (Proprietary) Limited ("the
purchaser"), a wholly owned subsidiary of Vunani Capital (Proprietary)
Limited ("Vunani Capital"), and Edge ("the agreement") in terms of which
Vunani Capital, via Northern Ocean, will acquire an additional 35% of
the entire issued share capital of Edge on the terms and conditions set
out below ("the transaction"). Vunani Capital is a wholly-owned
subsidiary of Vunani.
2. BACKGROUND INFORMATION
Vunani Capital holds an existing 10% interest in Edge which was acquired
in July 2006. At that time Edge had funds under management of R2.1
billion which amount has increased nearly three-fold to its current
funds under management of R6.0 billion. Edge is today one of South
Africa`s largest managers of fund of hedge funds on behalf of pension
funds and high net worth individuals.
An internal restructuring within Edge has made it possible for Vunani to
acquire the additional 35% equity stake in that company without
significantly diluting the senior executives` shareholding. Prior to
this restructuring the shareholding of Edge comprised the senior
executives of Edge with 65%, investors 25% and Vunani 10%.
The vendors to Vunani are the Trustees for the time being of the Kirsten
Family Trust, the SWP Trust and the Hyde Park Trust and Herman Johan
Viljoen.
Subsequent to the transaction, the senior executives of Edge will hold
55% of its equity and Vunani 45%. The beneficial shareholders of Edge
will be as follows:
HJ Viljoen 34.7%
JM Kirsten 15.3%
Other senior executives of Edge 5.0%
Vunani 45.0%
100.0%
3. RATIONALE FOR THE TRANSACTION
The transaction presents an opportunity for Vunani to expand its
operational activities in fund of hedge fund management and strengthens
its strategy to build a financial services business comprising a number
of operating businesses. It is the intention of the shareholders of Edge
to re-brand the company, Vunani Edge, to more fully reflect the active
role of Vunani and its executives in the business.
4. PURCHASE CONSIDERATION
The purchase consideration of R96.25 million will be discharged in cash
on the payment date as defined in the agreement and will be funded by
borrowings.
A potential additional amount of up to R43.75 million ("the additional
consideration") will be payable in cash or Vunani shares or a
combination of cash and Vunani shares at the purchaser`s election. The
additional consideration is subject to a stepped formula relating to the
funds under management of Edge growing to R6.8 billion by 28 February
2009. If applicable, the additional consideration shall be payable on
30 March 2009.
5. EFFECTIVE DATE
In terms of the agreement, the transaction will come into effect on 1
March 2008 subject to the successful fulfilment of the conditions
precedent set out in paragraph 6 below.
6. CONDITIONS PRECEDENT
The transaction is conditional, inter alia, upon:
- the completion of a satisfactory due diligence by the purchaser;
- the board of the purchaser approving the transaction;
- Edge shareholders approving the transaction;
- service, confidentiality and restraint agreements for Mr HJ Viljoen
and Mr JM Kirsten being entered into;
- compliance with any regulatory obligations to the extent required
by law to effect the transaction, including, if appropriate,
approval of the Competition Commission;
- the execution of a shareholders` agreement governing the
relationship of shareholders of Edge.
Warranties as are normal in transactions of this nature have been
provided.
9. CLASSIFICATION OF THE TRANSACTION
The transaction is classified as a Category 2 transaction in terms of
the Listings Requirements of the JSE Limited.
10. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue exercising caution when dealing in
the Company`s securities on the JSE Limited until such time as the
financial effects of the transaction are published.
Johannesburg
10 June 2008
Designated Advisers:
Merchant Sponsors (Proprietary) Limited
Vunani Corporate Finance
Advisers to Edge
Leaf Capital (Proprietary) Limited
Date: 10/06/2008 10:54:44 Produced by the JSE SENS Department.
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