| Mon 14 Mar 2011, 8:52 | | SHF - Steinhoff International Holdings Limited - Strategic review of Steinhoff |
|
SHF
SHF
SHF - Steinhoff International Holdings Limited - Strategic review of Steinhoff
Africa and proposed transaction with JD Group Limited in respect of combining
the Steinhoff Africa retail assets with that of JD Group Limited
STEINHOFF INTERNATIONAL HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration Number: 1998/003951/06
Share Code: SHF & ISIN: ZAE000016176
("Steinhoff")
14 March 2011
STRATEGIC POSITIONING OF STEINHOFF AFRICA`S RETAIL ASSETS WITHIN JD GROUP
INTRODUCTION
Steinhoff Africa is a diversified business with three clear business clusters
comprising:
* Unitrans supply chain solutions - a focussed, specialist, integrated
logistics, warehouse and distribution management business;
* an industrial integrated timber (PG Bison) and raw material business,
including Steinhoff`s associate investment in KAP International Holdings
Limited; and
* Steinhoff Africa retail assets (being the subject matter of this SENS
announcement in respect of a Category 2 transaction for Steinhoff, as
described in more detail below).
Steinhoff Europe and Steinhoff Africa are managed as two separate divisions.
Following the acquisition of Conforama, Steinhoff Europe is the second largest
integrated household goods retailer in Europe, and is well positioned to
continue to grow organically in the fragmented European household goods
market.
Steinhoff shareholders are advised that the Steinhoff board of directors has
concluded a strategic review of its retail interests in Southern Africa
focussing on:
* Identifying future growth opportunities for its retail interests in
Southern Africa;
* evaluating the most appropriate platform for the continued growth and
roll-out of its existing African retail assets, and
* locating an established platform that could support the group`s
introduction of a Southern African large scale mass-market retail concept
that could leverage off the global Steinhoff International household
goods supply-chain and retail knowledge of the group.
To this end, agreement has been reached between Steinhoff and JD Group Limited
("the agreement"), in terms of which JD Group Limited ("JD Group") will
acquire all the Southern African Retail interests of Steinhoff Africa ("the
transaction"), thereby establishing a diversified retail and financial
services group.
TERMS OF THE TRANSACTION
Subject to conditions precedent customary in a transaction of this nature, JD
Group will acquire, with effect from 30 June 2011:
* Unitrans Automotive ("Unitrans Auto"), a leading motor retailer with an
attractive portfolio of top selling volume brands, both new and pre-
owned, supplemented by a successful offering of parts and accessories,
servicing, insurance, and which also includes the Hertz car rental
division; and
* Steinbuild, a building material supplier and DIY business comprising the
Timbercity and Pennypinchers and Tilehouse retail outlets.
In addition and as part of the transaction, a Steinhoff associate will
acquire JD Group`s Polish furniture retail business, Abra Spolka Akcyjna
("Abra").
The consideration payable by JD Group will be discharged by the issue to
Steinhoff of a net number of approximately 60,7 million fully-paid JD Group
shares "(JD consideration shares"), representing approximately 26% of its
enlarged issued share capital valuing the overall transaction at more than R3
bn. Steinhoff will retain its JD Group shares as a strategic long-term
investment.
RATIONALE FOR BECOMING A SIGNIFICANT STRATEGIC SHAREHOLDER IN JD GROUP
The existing JD Group comprises a clear diversified retail and financial
services entity, that forms the perfect platform through which Steinhoff will
grow and expand its own retail exposure in Africa. In addition, the JD Group`s
retail businesses are expected to benefit from Steinhoff`s expertise in global
household goods retailing, and sourcing.
The transaction will combine Steinhoff Africa`s retail assets with that of the
JD Group. In this regard, the combined JD Group`s pro-forma revenues are
expected to be in excess of R25 billion, an increase of 91% from the R13
billion reported for the year ended 31 August 2010.
UNAUDITED PRO-FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The pro forma financial effects have been calculated on the basis of the
audited results of Steinhoff as at and for the year ended 30 June 2010 and the
audited results of JD Group as at and for its year ended 31 August 2010. On
the assumption that the transaction had been effective on 1 July 2009,
disregarding the difference in financial year ends and the once-off capital
profit on the sale of Steinhoff`s South African retail interests, the effects
on Steinhoff`s undiluted and diluted headline earnings and earnings per
ordinary share would have been immaterial (i.e. less than 3%).
On the assumption that the transaction had been effective on 30 June 2010, and
based on the statement of financial position of JD Group as at 31 August 2010,
its effect on Steinhoff`s net asset value would been an increase of 8% from 1
656.60 cps to 1 788.80 cps, including the effect of the capital profit
realised on the sale of Steinhoff`s South African interests.
Wynberg, Sandton
14 March 2011
For more information, please contact:
Steinhoff International Holdings Limited:
Markus Jooste
+27 (21) 808 0735
Piet Ferreira
+27 (21) 808 0761
Mariza Nel
+27 (21) 808 0754
Investment Bank to Steinhoff
Investec Bank Limited
Company sponsor: PSG Capital (Proprietary) Limited
Date: 14/03/2011 08:52:01 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.
