| Wed 21 Dec 2011, 16:37 | | HCI - Hosken Consolidated Investments Limited - Joint Announcement of a |
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HCI
HCI
HCI - Hosken Consolidated Investments Limited - Joint Announcement of a
Mandatory Offer By HCI-KWV Holdings Proprietary Limited, a subsidiary of HCI to
acquire all of the ordinary shares in the issued share capital of KWV (Other
than those that it already owns)
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1973/007111/06)
Share code: HCI
ISIN: ZAE000003257
("HCI")
KWV HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2009/012871/06)
("KWV")
JOINT ANNOUNCEMENT OF A MANDATORY OFFER BY HCI-KWV HOLDINGS PROPRIETARY LIMITED
("HCI-KWV HOLDINGS"), A SUBSIDIARY OF HCI TO ACQUIRE ALL OF THE ORDINARY SHARES
IN THE ISSUED SHARE CAPITAL OF KWV (OTHER THAN THOSE THAT IT ALREADY OWNS)
1. INTRODUCTION
HCI and KWV hereby advise shareholders that HCI`s indirect shareholding in
KWV has increased to 35.01% (net of treasury shares) subsequent to the
acquisition of 688 KWV shares by HCI at a price of 850 cents per share.
Consequently, in terms of Section 123 of the Companies Act, No. 71 of 2008,
as amended, (the "Companies Act") read with the Takeover Regulations
promulgated in terms of Sections 120 and 223 of the Companies Act (the
"Takeover Regulations") HCI, through its wholly owned subsidiary, HCI- KWV
Holdings (the "Offeror"), is obligated to make an offer to all KWV
shareholders to acquire all of the ordinary shares of KWV, other than those
that it already owns (the "Offer Shares"), on the terms set out in
paragraph 3.1 below (the "Offer").
The Offeror has notified the board of directors of KWV of its obligation to
proceed with the proposed acquisition of the Offer Shares. The Offer is an
affected transaction as defined in section 117 (1) (c) of the Companies Act
and, accordingly, will be regulated by the Companies Act, the Takeover
Regulations and the Takeover Regulation Panel ("TRP").
2. RATIONALE FOR THE OFFER
HCI`s indirect shareholding in KWV has increased to more than 35%, and HCI
via the Offeror, is therefore required in terms of the Takeover Regulations
to make a mandatory offer to KWV shareholders for the Offer Shares at the
highest price paid by HCI in the past six months.
In addition, HCI is aware that there is limited liquidity in the KWV shares
and the Offer provides KWV shareholders with an opportunity to realise
their investment at a slight premium to the recent prevailing trading
prices.
3. THE OFFER
3.1 Terms of the Offer
HCI, via the Offeror, shall offer to acquire all of the Offer Shares
in exchange for the Offer consideration of 850 cents per Offer Share
("Offer Consideration") in cash. KWV shareholders may elect to accept
the Offer in whole or in part.
The Offer Consideration represents a premium to the KWV market price
of 832 cents as at 15 December 2011 (the "Last Practicable Date") and
to the 30 day volume weighted average trading price of KWV of 832
cents for the 30 day period to the Last Practicable Date.
In the event that the KWV shareholders holding at least 90% (ninety
percent) of the Offer Shares accept the Offer within 4 (four) months
after the date of the Offer, the Offeror reserves the right to invoke
the provisions of Section 124 of the Companies Act to compulsorily
acquire all of the Offer Shares in respect of which the Offer was not
accepted.
Should the Offeror become entitled to and elect to exercise its
entitlement in terms of Section 124 of the Companies Act, KWV will
become a wholly-owned subsidiary of HCI, following which the KWV
shares will cease to be traded over-the-counter.
3.2 The Offer period
The Offer is expected to be open for acceptance from 09:00 on Monday,
23 January 2012 with the initial closing date being at 17:00 on
Friday, 02 March 2012 ("Closing Date") which is the minimum offer
period in terms of the Takeover Regulations of 30 business days. HCI
reserves the right to change the initial Closing Date to a later date.
3.3 Payment of the Offer Consideration and cash confirmation
Investec Bank Limited has furnished the TRP with an irrevocable bank
guarantee that the Offeror has sufficient cash resources and/or
facilities to conclude the Offer.
The payment of the Offer Consideration will be made to KWV
shareholders on the basis set out in paragraph 8 below.
3.4 No set-off of Offer consideration
Settlement of the Offer Consideration pursuant to the Offer will be
implemented in accordance with the terms of the Offer without regard
to any lien, right of set-off, counterclaim, deduction, withholding or
other analogous right to which HCI may otherwise be, or claim to be,
entitled against any shareholder.
3.5 Offer not made where unlawful
The Offer shall not constitute an offer to purchase or the
solicitation of an offer to sell any KWV shares in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the laws of such jurisdiction.
4. CONDITIONS PRECEDENT
HCI has obtained Competition Commission approval for the acquisition of
control of KWV during April 2011 and, accordingly the Offer is not subject
to any conditions precedent, other than the receipt of the required
approval of the TRP, including the issuance by the TRP of the requisite
compliance certificate.
5. PRO FORMA FINANCIAL EFFECTS OF THE OFFER
The table below sets out the pro forma financial effects of the Offer on a
KWV shareholder who accepts the Offer:
Market Offer Change
value consideration (%)
before the (cents)
Offer
(cents)
Financial effects as at the
Last Practicable Date(1):
Market value (2) 832 850 2%
30-day volume weighted average 832 850 2%
(3)
60-day volume weighted average 830 850 2%
(4)
Issued shares, net of treasury 68 537 663
shares (5)
Notes and assumptions:
(1) All financial effects are calculated as at the Last Practicable Date.
(2) The closing market price per KWV share at the Last Practicable Date.
(3) The volume weighted average traded price of KWV shares over the 30
trading days up to and including the Last Practicable Date.
(4) The volume weighted average traded price of KWV shares over the 60
trading days up to and including the Last Practicable Date.
(5) Per the KWV annual report for the year ended 30 June 2011.
6. HCI SHAREHOLDINGS IN KWV
Subsequent to the acquisition of 688 shares in KWV on 21 December 2011, the
Offeror currently owns a direct and indirect beneficial interest of 35.01%
in KWV ordinary shares (net of treasury shares).
7. RECOMMENDATION AND FAIR AND REASONABLE OPINION
A sub-committee of the KWV board of directors comprising 5 independent
directors of KWV (the "Independent Board") was formed for the purposes of
considering the Offer in accordance with the requirements of the Takeover
Regulations. The Independent Board is comprised of the following directors:
- F du Plessis;
- N Ellis;
- M Joubert;
- K Moloko; and
- L van Dyk.
The Independent Board has appointed KPMG, an independent advisor acceptable
to the TRP, to provide it with external advice in relation to the Offer and
to make appropriate recommendations to the Independent Board for the
benefit of KWV shareholders. The substance of the external advice and the
views of the Independent Board will be detailed in the Offer circular to be
sent to KWV shareholders in relation to the Offer.
8. SALIENT DATES AND TIMES
The salient dates and times of the Offer are set out below:
2012
Posting date for the combined Offeror and Friday, 20 January
Offeree circular to KWV shareholders
Opening date of Offer at 09:00 Monday, 23 January
Record date on which KWV shareholders must Friday, 02 March
be recorded in the register in order to
participate in the Offer
Closing date of the Offer (17:00) Friday, 02 March
Results of the Offer released on SENS Monday, 05 March
Results of the Offer published in the Tuesday, 06 March
press
Offer consideration posted to Offer Offer Consideration settlement
Participants (once documents of title have dates, being within six business
been received) days after acceptance of the
Offer until the sixth business
day after the Closing Date
Notes:
1) The above dates and times are subject to amendment by HCI. Any such
change will be released on SENS and/or published in the press.
2.)All times indicated above are South African times.
9. CIRCULAR
A circular containing full detail of the Offer, and including, inter alia,
a form of acceptance, surrender and transfer, will be posted to KWV
shareholders on or about Friday, 20 January 2011.
10. RESPONSIBILITY STATEMENT
HCI and the Independent Board accept responsibility for the information
contained in this announcement. To the best of their respective knowledge
and belief, the information contained in this announcement is true and
nothing has been omitted which is likely to affect the import of the
information.
Cape Town
21 December 2011
Investment Bank and Sponsor to HCI:
Investec Bank Limited
Legal Advisers to HCI:
Edward Nathan Sonnenbergs Inc
Date: 21/12/2011 16:37:27 Produced by the JSE SENS Department.
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