| Tue 27 Nov 2001, 0:00 | | National Sporting Index Limited - Acquisition, Inc |
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Capital, Change Of Name Cautionary
NATIONAL SPORTING INDEX LIMITED
(Incorporated in the Republic of South Africa)
(Registration No 1998/0020418/06)
("NSI")
JSE Code: NSI - ISIN No: ZAE000018172
The Janus Corporation (Proprietary) Limited is authorised to announce as
follows:
1.CANCELLATION OF DISPOSAL
In terms of an announcement published in the press on 21August 2001,
shareholders were informed that NSI had entered into an agreement with
Phumelela Gaming and Leisure Limited ("Phumelela"), whereby Phumelela
acquired NSI's bookmaking rights at three casinos ("the disposal"), subject
to certain conditions precedent. Certain of the conditions precedent have
not been complied with and the transaction will not be completed.
2.THE ACQUISITION
2.1 Agreement
NSI has entered into an agreement ("the acquisition agreement") in terms of
which it will be acquiring up to 100% of the issued share capital of The
Bedrock Capital Company (Proprietary) Limited ("BedRock Capital") ("the
acquisition")
In terms of the acquisition agreement dated, 26 October 2001, and subject to
the fulfilment of certain suspensive conditions set out in paragraph 2.3
below ("the suspensive conditions"), NSI will initially acquire ("the
initial acquisition") 50% of the issued share capital of BedRock Capital and
the rights in and to the know-how and research of BedRock Capital relating
to opportunities among smaller quoted companies ("SQCs") and the value
differentials in such counters on certain terms and conditions, from Slip-
Knott Investments 2 (Proprietary) Limited ("SK"). The remaining 50% of the
issued share capital of BedRock Capital ("the remaining shares") will be
subject to the put and call options referred to in paragraph 2.2 below. The
effective date of the initial acquisition is 1 October 2001, and that of the
acquisition of the remaining shares will be the date on which the last of
the suspensive conditions is fulfilled or waived, as the case may be.
2.2 Purchase Consideration
The purchase price for the initial acquisition is R1.
SK has granted NSI a call option over the remaining shares ("the call
option"). NSI may exercise the call option at any time after 24h00 on 31
December 2002, but before 24h00 on 31 March 2003, failing which the call
option will lapse and be of no further force or effect.
Simultaneously, NSI has granted SK a put option in terms of which SK may put
the remaining shares to NSI ("the put option"). SK may exercise the put
option at any time prior to 24h00 on 31 December 2002, failing which the put
option will lapse and be of no further force or effect.
Should NSI elect to exercise the call option or should SK exercise the put
option, the purchase price for the remaining shares will be R500 000 payable
by the issue by NSI of 50 000 000 new NSI ordinary shares of 0,01 cent each
at a premium of 0,99 cents per share, adjusted for any consolidations, or
share splits in NSI's capital structure that may have occurred between the
effective date and the date of exercise of the call option.
Accordingly, the effective purchase price for the acquisition of 100% of
BedRock Capital will be R500 001, payable by way of the issue of 50 000 000
new ordinary shares in NSI at 0,01 cent per share, issued at a premium of
0,99 cents per share and the payment of R1 in cash.
In addition to the above, NSI has granted SK a restitution option over the
initial 50% of the issued share capital of BedRock Capital that NSI will
acquire ("the restitution option").
SK may exercise the restitution option at any time prior to 24h00 on 31
December 2002, but before the exercising of either the put or the call
option, failing which the restitution option will lapse and be of no further
force or effect.
Should SK exercise the restitution option, NSI will return the 50% holding
in BedRock Capital, acquired in terms of the initial acquisition, to SK in
exchange for a cash payment of R1.
2.3 Suspensive Conditions
The implementation of the acquisition is subject to inter alia:
the approval of the shareholders of NSI of the acquisition in general
meeting; and
the approval of the necessary regulatory authorities being obtained for the
acquisition.
Notwithstanding the date of fulfilment of the suspensive conditions
pertaining to the acquisition, the effective date of the initial acquisition
is 1 October 2001.
2.4 Reverse Take-Over
The implementation of the acquisition will result in the reverse listing of
BedRock Capital through NSI on the Venture Capital Market of the JSE
Securities Exchange South Africa ("the JSE"). Accordingly the circular to
shareholders setting out details of the acquisition, referred to in
paragraph 7 below, will contain revised listing particulars as though NSI
were a new listing. In this regard, shareholders are warned that it is
uncertain as to whether or not the Listings Committee of the JSE will allow
the listing to continue following the acquisition.
Shareholders' attention is drawn to the fact that the acquisition is not
subject to the continued listing of NSI.
2.5 Nature Of Business Of Bedrock Capital
Bedrock Capital is a share holding and trading company that will invest
primarily in SQCs listed on the JSE. Bedrock Capital proposes to acquire
these investments by way of cash and/or new issues of shares by NSI.
NSI aims to provide investors with greater liquidity in their current
largely illiquid underlying portfolio investments in these SQCs, as well as
a greater degree of active management intervention in those underlying
investments.
2.6 Rationale For The Acquisition
The directors of NSI have previously stated that it is their intention to
withdraw from the bookmaking industry in an orderly manner, and to implement
restructuring plans that involve the bolstering of the capital structure as
well as the refocusing of the group's business operations.
NSI's refocussed business will be in line with the existing core
competencies of NSI's board, namely those of corporate rehabilitation and
restructuring of ailing businesses for renewed growth, as well as making
strategic investments in SQCs.
2.7 Prospects
The company aims to:
achieve growth in capital value;
improve the liquidity ininvestors' holdings in the SQCs; and
add an active management dimension to the underlying investments.
3.FINANCIAL EFFECTS
The effects on the audited NSI earnings and headline earnings per share for
the financial year ended 31 March 2001 and the audited net asset value and
net tangible asset value per NSI share at 31 March 2001 are as follows:
Before the After the
acquisition acquisition Change
(cents)1 (cents) (%)
Earnings per share (7.57) (5,67)2 25,0%
Headline earnings
per share (5.21) (3,91)2 25,0%
Net asset value
per share 3.29 2,723 (17,39)%
Net tangible asset
value per share 2,97 2,233 (25,0)%
NOTES:
1.Based on 150 000 000 NSI shares being in issue throughout the financial
year ended 31st March 2001.
2. Based on
200 000 000 NSI shares being in issue throughout the financial year ended 31
March 2001;
the acquisition having been implemented on 1 April 2000; and
no earnings attributable to the acquisition being taken into account.
3. Based on:
200 000 000 NSI shares being in issue at 31 March 2001; and
the acquisition having been implemented on 31 March 2001.
4.INCREASE IN AUTHORISED SHARE CAPITAL
The directors of NSI propose that the authorised share capital of NSI be
increased from 300 000 000 ordinary shares of 0,01 cent per share to 500 000
000 ordinary shares of 0,01 cent per share. The reason for and the effect of
the increase in the authorised share capital of NSI is to create the shares
necessary to enable the directors to take advantage of possible future
acquisitions or to raise capital through the issue of shares for cash,
subject to the provisions of the Companies Act, Act 61 of 1973, as amended
("the Act"), and the Listings Requirements of the JSE ("the Listings
Requirements").
5.MAJOR SHAREHOLDER
On the basis that NSI will acquire 100% of the issued share capital of
BedRock Capital as envisaged in this announcement, SK, holding 25% of the
issued share capital of NSI, will be its major shareholder.
6.CHANGE OF NAME
It is proposed that NSI's name will be changed to "Bedrock Capital Limited".
7.DOCUMENTATION
A circular providing further details of, inter alia, the acquisition,
proposed change of name, proposed increase in authorised share capital and
containing a notice convening a general meeting of NSI shareholders to
consider the resolutions required for the implementation thereof, will,
subject to JSE approval, be posted to NSI shareholders within 30 days of
this announcement, or on such later date as may be agreed to by the JSE.
8.CAUTIONARY ANNOUNCEMENT
Shareholders are advised to exercise caution when dealing in NSI's shares on
the JSE until the circular referred to in paragraph 7 above is mailed to
shareholders.
Johannesburg
27 November 2001
Lead Sponsor to the transaction
Quaestor Capital (Pty) Ltd
Corporate adviser and joint sponsor to NSI
The Janus Corporation (Pty) Ltd
