| Mon 23 Feb 2009, 11:22 | | NAI / NAN - NAIL / Primedia / Capricorn - Announcement To Nail Shareholders |
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NAI
NAI
NAI / NAN - NAIL / Primedia / Capricorn - Announcement To Nail Shareholders
New Africa Primedia Capricorn Capital
Investments Limited (Proprietary) Limited Partners Investments
(Incorporated in the (Incorporated in the (Proprietary) Limited
Republic of South Republic of South (Incorporated in the
Africa) Africa) Republic of South
(Registration number (Registration number Africa)
1993/002467/06) 2005/044403/07) (Registration number
Share code: NAI and ("Primedia") 2003/030529/07)
NAN ("Capricorn")
ISIN: ZAE00012134
and ZAE00011946
("NAIL")
ANNOUNCEMENT TO NAIL SHAREHOLDERS
1. INTRODUCTION
NAIL shareholders are referred to the announcement released on the Securities
Exchange News Service of the JSE Limited ("JSE") on 17 December 2004 in terms
of which they were advised of Primedia`s firm intention to acquire all of the
NAIL ordinary shares and NAIL "N" shares (collectively the "NAIL Shares")
held by them for the price as set out in paragraph 4 below ("Prior Offer").
Subsequent to that announcement, Capricorn joined Primedia as a joint offeror
(the "Offerors", and a reference to Offerors shall embrace a reference to
each individually).
NAIL shareholders are advised that NAIL has been informed by the Offerors
that they have acquired the NAIL Shares set out in the table below from the
parties specified therein for an initial cash consideration of 26 cents per
NAIL share; plus the attributable portion of a potential agterskot as set out
in paragraph 2 below (the "Agterskot Consideration").
The Offerors have acquired the NAIL Shares ex the dividend of 15 cents per
NAIL Share payable to NAIL shareholders registered on Friday,
13 February 2009.
NAIL "N" shares NAIL ordinary shares
Number of Initial cash Initial cash
Shares consideration Number of consideration
(R`000) Shares (R`000)
Tiso Capital 24 353 437 6 332 753 025 196
Partners (Pty) Ltd
Mineworkers 24 353 437 6 332 643 581 167
Investment Company
(Pty) Ltd
Safika Holdings 6 088 359 1 583 188 256 49
(Pty) Ltd
Investec Bank Ltd - - 1 427 240 371
Investec Employee 42 618 515 11 081 - -
Benefits Ltd
Total 97 413 748 25 328 3 012 102 783
Following the implementation of the transactions set out above and taking
into account the NAIL Shares previously held by Capricorn, the Offerors hold
the following interests in NAIL:
NAIL "N" shares NAIL ordinary shares
Number of Percentage Number of Percentage
shares holding shares holding
Capricorn 31 953 300 26.1% 1 940 424 46.6%
Primedia 89 813 885 73.3% 1 824 703 43.8%
Accordingly, in terms of Rule 8.1 of the Securities Regulation Code on Take-
Overs and Mergers ("SRP Code") the Offerors are obliged to extend a mandatory
offer ("Offer") to all of the remaining NAIL shareholders ("Offeree
Shareholders").
2. THE AGTERSKOT
The agterskot, if any, will be calculated by reference to the outcome of
certain tax issues being resolved, namely:
the balance of NAIL`s claim against the South African Revenue Service for
income tax overpayments (plus interest and penalties thereon) ("Tax
Overpayment Claim"); and
the claim by KFM Radio (Proprietary) Limited ("KFM") against the South
African Revenue Service for the disallowance of a trademark write-off (plus
interest and penalties thereon) ("KFM Trademark Claim");
(collectively the "Tax Claims").
Assuming that the Tax Claims are settled in full in NAIL`s / KFM`s favour,
NAIL estimates that (based on the current values excluding any interest after
31 December 2008), these Tax Claims could amount to the maximum amounts set
out below:
Estimated Estimated
amount amount per NAIL
(R`000) Share
(cents)
Tax Overpayment Claim 10 395 8.2
KFM Trademark Claim 28 160 22.2
Tax Claims 38 555 30.4
The attributable portion of the potential agterskot will be net of any costs
incurred in realising the Tax Claims and will be paid by the Offerors as and
when amounts, in tranches, in excess of R6.3 million are received, with the
balance if any being paid within 21 days of the final determination of the
Tax Claims.
3. THE OFFER
3.1 TERMS OF THE OFFER
The Offerors have provided the board of directors of NAIL with a firm
intention letter containing the terms of the Offer which they will make to
the Offeree Shareholders. The salient terms of the Offer are set out below:
3.1.1 The Offer Consideration
Offeree shareholders who accept the Offer may elect to receive either:
3.1.1.1 an initial cash consideration of 26 cents per NAIL share plus an
attributable portion of the potential agterskot which will be payable as and
when the Tax Claims are determined. This consideration is the same as that
set out in paragraph 1 above; or
3.1.1.2 a once-off cash consideration of 68 cents per NAIL Share, with no
agterskot.
3.1.2 Condition precedent
The Offer is subject to the approval by the Securities Regulation Panel
("SRP") and JSE of the Offer and all relevant documentation to be distributed
to the Offeree Shareholders.
3.1.3 Material arrangements, undertakings or agreements
There are no material arrangements, undertaking or agreements between the
Offeror and NAIL. There are no material arrangements, undertaking or
agreements between the Offeror and any NAIL shareholder other than as set out
in paragraph 1 above and the agreement entered into between Primedia and
Capricorn regulating their relationship as joint offerors and their future
relationship in NAIL. Details of the arrangements as between Primedia and
Capricorn will be set out in the circular to be posted to the Offeree
Shareholders
3.2 OPINION AND RECOMMENDATIONS
The NAIL Board will appoint an independent advisor to advise on whether the
terms and conditions of the Offer are fair and reasonable to the NAIL
shareholders. Details of the opinion of the independent advisor will be
provided in the circular to be posted to the NAIL shareholders in due course.
3.3 CASH CONFIRMATION
The SRP has been given appropriate written confirmation, as contemplated in
Rule 2.3.2(b) and Rule 21.7 of the SRP Code, that the Offerors have
sufficient cash resources and/or facilities available to them to meet their
cash commitments to the Offeree Shareholders in relation to the Offer.
4. PRIOR OFFER
The price contemplated by the Prior Offer would have been adjusted, in
accordance with the terms thereof, by virtue of the sale of certain specific
items, details of which are set out below:
(R`000) (cents)
Starting amount 45 127 35.6
Loans to P4 Radio Cape Town (Pty) Ltd and P4 (18 507) (14.6)
Radio Durban (Pty) Ltd
Claims and preference shares in Motsami (Pty) (7 479) (5.9)
Ltd and Makana SPV (Pty) Ltd
Resultant Prior Offer price 19 141 15.1
This excludes the monthly increase of 0.2280 cents per NAIL Share from 1
April 2005, which in terms of the Prior Offer would be reduced to 0.0967
cents per NAIL Share to take into account the settlement of the specific
items set out above. The resultant Prior Offer price taking into account this
monthly increase as well as cash on the NAIL balance sheet would have been
24.3 cents per NAIL Share.
5. CIRCULAR
A circular containing full details of the Offer will be posted to NAIL
shareholders in due course.
Johannesburg
23 February 2009
Transaction advisor
(Investec Bank Limited Logo)
Legal advisor to NAIL, Capricorn and Primedia
(Edward Nathan Sonnebergs logo)
Sponsor to NAIL
(Investec Bank Limited Logo)
Date: 23/02/2009 11:22:23 Produced by the JSE SENS Department.
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