| Tue 8 Jul 2008, 15:33 | | HCI / JNC - Hosken Consolidated / Johnnic Holdings - Firm intention to make |
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HCI JNC
HCI JNC
HCI / JNC - Hosken Consolidated / Johnnic Holdings - Firm intention to make
an offer and withdrawal of cautionary announcement
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
(Share code: HCI ISIN: ZAE000003257)
("HCI")
JOHNNIC HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1889/000429/06)
(Share code: JNC ISIN: ZAE000024352)
("Johnnic")
FIRM INTENTION TO MAKE AN OFFER AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the announcements released by HCI and Johnnic
on the Securities Exchange News Service ("SENS") of the JSE Limited ("the
JSE") on Friday, 27 June 2008 and published in the press on Monday, 30 June
2008.
Investec Bank Limited is authorised to announce that pursuant to the HCI
group`s strategic objective to increase its shareholding in Johnnic, HCI
has, through its wholly-owned subsidiary, Mercanto Investments
(Proprietary) Limited (the "offeror"), expressed a firm intention to the
board of directors of Johnnic to make an offer to acquire all the shares in
the issued share capital of Johnnic, other than the shares already owned by
the HCI group (the "offer shares"), in accordance with and as contemplated
by the Securities Regulation Code on Take-overs and Mergers and the Rules
of the Securities Regulation Panel ("SRP") (the "offer").
The offer will be subject to the fulfilment or written waiver by the
offeror (to the extent legally permissible) of the conditions precedent, as
set out in paragraph 5 below.
2. Rationale and section 440K
The HCI group has a current shareholding of 67% in Johnnic and has publicly
stated its intention to increase its interest in Johnnic and its exposure
to gaming activities. The offer will assist the HCI group in achieving this
objective.
Should the offer be accepted by Johnnic shareholders holding not less than
nine-tenths of the offer shares, it is the intention of the offeror to
exercise its entitlement to compulsorily acquire the remaining Johnnic
shares in issue in terms of section 440K of the Companies Act No. 61 of
1973, as amended ("Companies Act").
In this event Johnnic will become a wholly-owned subsidiary of the HCI
group and the listing of the Johnnic shares on the JSE will be terminated.
3. Offer consideration
Subject to the fulfilment of the conditions precedent, as set out in
paragraph 5 below, the offeror hereby offers to acquire all the offer
shares for an offer consideration of R16.75 per Johnnic share (the "offer
consideration"), in respect of which it receives valid acceptances prior to
the closing date of the offer, which will be announced on SENS and
published in the press in due course. The cash consideration and combined
share and partial cash consideration represents a premium of 72.7% and
69.6% to the closing Johnnic share price and 42.5% and 40.3% respectively
to the 30 day volume weighted average price of a Johnnic share on the JSE
at the close of business on Thursday, 26 June 2008, being the day
immediately prior to the release of the cautionary announcement by Johnnic
regarding the offer.
Johnnic shareholders will be entitled to elect one of the following
settlement alternatives of the offer consideration per Johnnic share,
namely:
- the cash consideration, being an amount equal to R16.75 per Johnnic
share, settled in cash ("cash consideration"); or
- the combined share and partial cash consideration, settled as follows:
- 0.02085 HCI ordinary shares per Johnnic share; plus
- R15.11 in cash per Johnnic share,
("combined share and partial cash consideration").
4. Irrevocable undertakings
Johnnic shareholders collectively representing approximately 86.8% of the
offer shares have irrevocably undertaken to accept the offer in respect of
all of the Johnnic shares held by them and to elect to receive the combined
share and partial cash consideration in respect thereof.
5. Conditions precedent
The offer will be subject to the fulfilment by the offeror of the following
conditions precedent:
To the extent required, the approval of the relevant regulatory authorities
including but not limited to the JSE, the SRP and the Exchange Control
Division of the South African Reserve Bank.
6. Gaming Authorities
Application for the approval of the offer by the relevant Gaming
Authorities will be made in due course. Accordingly, the implementation of
the offer is not conditional upon the aforesaid approvals being obtained
from the relevant Gaming Authorities.
7. Cash confirmation
The SRP has been provided with an appropriate confirmation which complies
with its requirements, that the offeror has sufficient cash resources
and/or facilities available to meet its commitments in terms of the offer.
8. Pro forma financial effects on a Johnnic shareholder
The preparation of the unaudited pro forma financial effects is the
responsibility of the directors of Johnnic. The unaudited pro forma
financial effects have been prepared for illustrative purposes only to
provide information on how the offer may impact on a Johnnic shareholder
and due to the nature thereof may not give a fair reflection of a Johnnic
shareholder`s financial position.
Before After the Change
the offer2
offer1
(cents) (cents) (%)
Cash consideration 970 1,675 72.7%
Combined share and 970 1,645 69.6%
partial cash 3
consideration
Notes:
The financial effects are indicative only and have been based on the
assumptions set out below:
1 The "Before the offer" column reflects the Johnnic share price at the
close of the last trading day prior to the day on which Johnnic released the
cautionary announcement relating to the offer, being Thursday, 26 June 2008.
2 The "After the offer" column has been adjusted for the effects of the
offer consideration on a Johnnic shareholder. No account has been taken of
adjustments for interim Johnnic distributions, taxes, commissions or any
other charges in calculating the above financial effects.
3 The "After the offer" calculation for the combined share and partial
cash consideration has been based on the HCI share price on the JSE at the
close of business on the day on which Johnnic released the cautionary
announcement relating to the offer, being Thursday, 26 June 2008.
9. Salient dates
The salient dates of the offer are set out in the table below, details of
which will be confirmed by further announcements on SENS and in the press
in due course:
2008
Circular posted to Johnnic shareholders Monday, 21 July
on
Opening date of the offer at 09:00 on Monday, 21 July
First offer consideration settlement
date in respect of firm
acceptances of the offer before 12:00 Monday, 21 July
on
Offer consideration settlement dates in Every seventh
respect of firm business day after
acceptances of the offer received Monday, 21 July until
before 17:00 on the seven
business day preceding the relevant business days after
settlement date the closing
date
Last day to trade in order for Johnnic Five business days
shareholders to participate prior to the
in the offer closing date
Johnnic shares trade ex the right to Four business days
participate in the offer prior to the
closing date
Record date on which Johnnic
shareholders must be recorded
in the register in order to participate The closing date
in the offer
Closing date of the offer at 12:00 The closing date as
will be
announced on SENS and
published in the
press
The above dates and times are subject to amendment at the discretion of HCI
and/or Johnnic. Any such amendment will be released on SENS and published
in the South African press.
10. Independent advisor
Johnnic has appointed Deloitte & Touche Corporate Finance Division as the
independent advisor to the Johnnic shareholders.
11. Odd lot offer
Shareholders of Johnnic are referred to the Johnnic announcement released
on SENS on Friday, 27 June 2008 and published in the press on Monday, 30
June 2008 wherein Johnnic shareholders were informed that the Johnnic board
of directors had, at that stage, decided not to implement the odd lot offer
(the "odd lot offer") to Johnnic shareholders holding less than 100 Johnnic
shares ("odd lot holders").
In this regard, in the event that the offeror does not become entitled to
invoke section 440K of the Companies Act, as referred to in paragraph 2
above, then odd lot holders will be notified on SENS and in the press of
the details of the implementation of the odd lot offer.
12. Further documentation
A circular containing the detailed terms of the offer will be posted to
Johnnic shareholders in due course.
13. Withdrawal of cautionary announcement
Johnnic shareholders are advised that the cautionary announcement released
on SENS on 27 June 2008 is hereby withdrawn.
8 July 2008
Sandton
Investment bank and sponsor to HCI and Johnnic
Investec Bank Limited
(Registration number 1969/004763/06)
Legal advisor to HCI
Edward Nathan & Sonnenbergs Inc.
(Registration number 2006/018200/21)
Legal advisor to Johnnic
Webber Wentzel incorporating Mallinicks
Independent advisor to Johnnic
Deloitte & Touche Corporate Finance
Date: 08/07/2008 15:33:31 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
