| Wed 16 May 2001, 0:00 | | M-web / Naspers - Proposed Scheme Of Arrangement |
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M-WEB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/004269/06)
("M-Web")
M-WEB / NASPERS: Proposed scheme of arrangement
M-WEB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/004269/06)
("M-Web")
NASPERS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1925/001431/06)
("Naspers")
Proposed scheme of arrangement pursuant to which M-Web will be delisted from
the JSE Securities Exchange South Africa
1. INTRODUCTION
Further to the cautionary announcement issued on 6 April 2001, Investec Bank
Limited is authorised to announce that agreement has been reached between
Naspers and M-Web in terms of which Naspers will extend an offer to the
shareholders of M-Web, excluding Naspers and its associates (comprising MIH
Investments (Proprietary) Limited and MultiChoice Investments (Proprietary)
Limited) and the M-Web Share Trust ("minorities"), for the acquisition of
all of their shares for a consideration amounting to 1 Naspers "N" share
("Naspers shares") for every 15 M-Web shares held ("the offer"). The offer
will be implemented by means of a scheme of arrangement in terms of section
311 of the Companies Act, 1973 (Act 61 of 1973), as amended ("the scheme").
If for any reason the Court should fail to sanction the scheme following its
approval by the requisite majority of minorities, the minorities will be
entitled to accept a substitute offer in respect of their M-Web shares, for
the same consideration as the offer ("the substitute offer").
Naspers, its associates and the M-Web Share Trust (which collectively own
337 540 630 M-Web shares being 82,75% of
M-Web's issued share capital) will retain their respective shareholdings in
M-Web.
2. RATIONALE FOR THE SCHEME
Given the negative sentiment towards internet related stocks on the JSE
Securities Exchange South Africa ("JSE"), along with the future funding
requirements of M-Web and the requirement by the JSE for M-Web to maintain a
minimum public shareholder spread, there appears to be little justification
for the continued listing of M-Web. Current market conditions are not
conducive to any capital- raising initiatives by M-Web as a listed company.
The directors of M-Web are of the opinion that its business could, in the
present environment, be better structured as an unlisted company and that
the interests of M-Web and the minorities would be better served if the
minorities are given the opportunity to dispose of their shares at a fair
and reasonable price.
3. FINANCIAL EFFECTS
The table below sets out the financial effects of the scheme on an M-Web and
a Naspers shareholder, based on the published unaudited interim results of M-
Web and Naspers for the six months ended 30 September 2000:
15 M-Web 1 Naspers 1 Naspers Change to Change to
shares share share M-Web Naspers
before before after shareholder
shareholder
the the the (%) (%)
scheme scheme scheme
Attributable market value:
- 5 April 2001 (cents)(1) 1 875 2 475 - 32 -
- 30-day volume weighted
average (cents)(2) 1 995 2 950 - 48 -
- 60-day volume weighted
average (cents)(3) 2 160 3 410 - 58 -
- 14 May 2001(cents)(4) 1 950 2 630 - 35 -
Attributable
(loss)/earnings (cents) (565) 881 825 246 (6)
Attributable
headline loss (cents) (565) (129) (143) 75 (11)
Attributable
net asset value (cents) 644 2 217 2 241 248 1
Attributable tangible
net asset/(liability)
value (cents) 644 (2 610) (2 510) (490) 4
Number of shares
in issue ('000) 407 355 148 262 152 952 - -
Weighted average number
of shares ('000) 404 910 148 262 152 952 - -
Notes:
(1) The closing market price of 15 M-Web shares (125 cents for 1 M-Web
share) and 1 Naspers share on 5 April 2001, being the trading day
immediately preceding the publication of the cautionary announcement.
(2) The volume weighted average traded price of 15 M-Web shares and 1
Naspers share over the 30 trading days up to and including 3 April 2001.
(3) The volume weighted average traded price of 15 M-Web shares and 1
Naspers share over the 60 trading days up to and including 3 April 2001.
(4) The closing market price of 15 M-Web shares (130 cents for 1 M-Web
share) and 1 Naspers share on 14 May 2001, being the last practicable
trading day prior to the publication of this announcement.
The financial effects are indicative and have been based on the exchange
ratio of 1 Naspers share for every 15 M-Web shares held. The financial
effects are based on the assumptions set out below.
For the purpose of calculating attributable earnings and attributable
headline earnings per share "after the scheme" it has been assumed that:
* the scheme was in place with effect from 1 April 2000
* the number of Naspers shares "after the scheme" has been increased by 4,7
million to reflect the issue of Naspers shares in exchange for M-Web shares
held by minorities
* goodwill of R110,519 million arising from the scheme has been amortised in
accordance with Naspers's stated accounting policy, and
* the respective portion of the M-Web loss attributable to minorities has
been assumed by Naspers.
For the purpose of calculating attributable net asset value per share and
attributable net tangible asset/liability value per share "after the scheme"
it has been assumed that:
* the scheme was in place with effect from 30 September 2000
* the number of Naspers shares "after the scheme" has been increased by 4,7
million to reflect the issue of Naspers shares in exchange for M-Web shares
held by minorities
* Naspers's outside shareholders' interest relating to M-Web "after the
scheme" has been reduced by R30,2 million to reflect Naspers's increase in
shareholding in M-Web following the scheme, and
* Naspers shares have been issued to minorities at 3 000 cents per Naspers
share.
The effects of the acquisition by Naspers of the minority interests in
Educor Limited, as detailed in the circular to Educor Limited shareholders
dated 30 March 2001, are considered to be immaterial by the directors and
have been excluded from the financial effects presented above.
4. OPINIONS, RECOMMENDATIONS AND UNDERTAKINGS
The directors of M-Web have considered the terms of the offer and the scheme
and are of the unanimous opinion that they are fair and reasonable to
minorities. Accordingly, the board of directors of M-Web supports the
scheme and recommends that minorities vote in favour thereof. The directors
of M-Web intend to vote in favour of the scheme at the scheme meeting in
respect of their own holdings of M-Web shares.
Standard Corporate and Merchant Bank ("SCMB"), acting as independent adviser
to M-Web and minorities, has considered the terms of the scheme and is of
the opinion that they are fair and reasonable to minorities. A copy of
SCMB's opinion in this regard will be included in the documentation to be
issued in relation to the scheme ("scheme documentation"). Minorities who
collectively hold approximately 23% of the total number of shares held by
minorities, have indicated that they intend to accept the offer and vote all
of their shares in favour of the scheme.
5. TERMINATION OF M-WEB LISTING ON THE JSE
Application will be made for the termination of M-Web's listing on the JSE
with effect from the operative date of the scheme. Full details of the
acceptance and surrender procedure of M-Web share certificates and other
documents of title will be contained in the scheme documentation.
6. CONDITIONS PRECEDENT
The offer and the scheme to be implemented pursuant thereto are conditional
upon:
- the approvals, in so far as may be necessary, of the scheme documentation
by the JSE, the Securities Regulation Panel ("SRP") and the Exchange Control
Division of the South African Reserve Bank
- the approval of at least 75% of the minorities present or represented and
voting at the scheme meeting
- the sanction of the scheme by the High Court of South Africa (Cape of Good
Hope Provincial Division), and
- registration of the Order of Court by the Registrar of Companies.
The above conditions precedent are to be fulfilled by not later than 31 July
2001.
7. GENERAL
The scheme documentation is in the process of being prepared and will,
subject to the approvals of the JSE and SRP, be mailed to M-Web shareholders
within 30 days of the date of this announcement (or, with the consent of the
JSE and the SRP, as soon as possible thereafter).
Further announcements, including the salient dates and times pertaining to
the scheme, will be published from time to time.
Cape Town
16 May 2001
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Reporting accountants and auditors to M-Web
PricewaterhouseCoopers Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration no. 1998/012055/21)
Independent adviser to M-Web and the minorities
SCMB
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
Lead sponsor to Naspers and M-Web
Investec Securities Limited
Member of the JSE
Registration No. 1972/008905/06
Attorneys
Jan S. de Villiers Attorneys
Co-sponsor to Naspers
Gensec Bank Limited
(Registration number 1996/004744/06)
