| Thu 26 Sep 2002, 17:22 | | This Announcement Is Not For Distribution In Or I |
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This announcement is not for distribution in or into the United States of
America
PROPOSED REORGANISATION OF NASPERS PURSUANT TO WHICH THE MINORITY INTERESTS IN
MIH HOLDINGS LIMITED ("MIHH") AND MIH LIMITED ("MIHL") WILL BE SWAPPED FOR
SHARES IN NASPERS LIMITED ("NASPERS")
Naspers Limited
(Incorporated in the Republic of South Africa
and listed on the JSE Securities Exchange South Africa)
(Registration number 1925/001431/06)
Share code NPN ISIN ZAE000015889
("Naspers")
MIH Holdings Limited
(Incorporated in the Republic of South Africa
and listed on the JSE Securities Exchange South Africa)
(Registration number 1993/005613/06)
Share code MHH ISIN ZAE000018941
("MIHH")
PROPOSED REORGANISATION OF NASPERS PURSUANT TO WHICH THE MINORITY INTERESTS IN
MIH HOLDINGS LIMITED ("MIHH") AND MIH LIMITED ("MIHL") WILL BE SWAPPED FOR
SHARES IN NASPERS LIMITED ("NASPERS")
1. INTRODUCTION
The directors of Naspers, MIHH and MIHL, a company incorporated in the
British Virgin Islands ("BVI") and listed on the Nasdaq National Market
("Nasdaq") in New York, have reached agreement on proposals for the
reorganisation of the Naspers group ("the reorganisation").
Upon approval of the proposed reorganisation by the holders of Naspers shares
in general meeting, and subject to the fulfilment of the various conditions
precedent set out in paragraph 7 below, the holders of MIHH shares, other than
Naspers and its wholly owned subsidiaries, will effectively exchange their
shares for new class N ordinary shares in Naspers and the holders of class A
ordinary shares in MIHL will effectively exchange their shares for new class N
ordinary shares in Naspers.
This will result in the minority interests in MIHH and MIHL being acquired by
Naspers.
The proposed reorganisation includes two elements: firstly, a scheme of
arrangement ("the scheme") in terms of section 311 of the South African
Companies Act, 1973 (Act 61 of 1973), as amended ("the Act"), to be proposed by
Naspers, between MIHH and the holders of MIHH shares, other than Naspers and its
wholly owned subsidiaries ("the MIHH minorities"), and, secondly the merger of
MIHL into MIH BVI Limited ("MIH BVI"), a wholly owned British Virgin Islands
("BVI") subsidiary of MIHH ("the merger"), in accordance with BVI law. The
scheme and the merger will occur simultaneously as separate, but
interconditional, transactions.
In addition, Naspers has applied for the listing of its class N ordinary
shares in the form of American Depositary Shares ("ADSs") on the Nasdaq National
Market ("Nasdaq"). These ADSs will be evidenced by American Depositary Receipts
("ADRs"). ADRs are certificates issued by a depositary bank located in the
United States ("US") against the deposit of the underlying class N ordinary
shares of Naspers with a custodian in South Africa. Each Naspers ADS will
represent 10 Naspers class N ordinary shares.
The following organisational chart presents Naspers`s group structure as it
relates to MIHH and MIHL:
See press for details
2. THE SCHEME
Naspers will acquire from the MIHH minorities all their MIHH shares by way of
the scheme, subject to three-fourths of the MIHH minorities who are present and
voting at the scheme meeting voting in favour of the scheme, the sanction of the
scheme by the court and the registration of the order sanctioning the scheme by
the Registrar of Companies.
Naspers will propose the scheme between MIHH and the MIHH minorities for the
acquisition of all their MIHH shares, for which the MIHH minorities will receive
1 new Naspers class N ordinary share for every 2,25 MIHH shares held by them on
the record date of the scheme ("the scheme consideration"). After the scheme the
MIHH minorities will hold 38 263 654 Naspers class N ordinary shares,
constituting 13% of the total class N ordinary shares in issue and 3,8% of the
voting rights in the issued share capital of Naspers upon completion of the
scheme.
3. THE MERGER
At present, MIHL has two classes of issued shares, namely class A and class B
ordinary shares. MIH BVI holds all class B ordinary shares, representing 50,45%
of the economic interest and 75,34% of the voting interest in MIHL. The class A
ordinary shares represent 49,55% of the economic interest and 24,66% of the
voting interest in MIHL.
In terms of the merger agreement under BVI law, MIHL will merge with MIH BVI.
At the completion of the merger MIHH will own 100% of the business of MIHL
through its ownership of 100% of the ordinary shares of MIH BVI.
Naspers will, by agreement with MIH BVI, settle MIH BVI`s obligation to
deliver shares by issuing Naspers class N ordinary shares or Naspers ADSs to the
MIHL minorities in return for shares in MIH BVI.
MIHL minorities resident in South Africa will receive 3,50 Naspers class N
ordinary shares for each MIHL class A ordinary share held by them prior to the
merger. MIHL minorities resident in any country other than South Africa, will
receive 0,35 Naspers ADSs for each MIHL class A ordinary share held by them
prior to the merger (collectively "the merger consideration"), bearing in mind
that each ADS will represent 10 Naspers Class N ordinary shares. All MIHL
minorities, whether they receive Naspers class N ordinary shares or Naspers
ADSs, will receive the same number of underlying shares in Naspers for each MIHL
class A ordinary share held by them prior to the merger. After the merger the
MIHL minorities will hold 98 803 261 class N ordinary shares, constituting
33,68% of the total class N ordinary shares in issue and 9,83% of the voting
rights in the issued share capital of Naspers upon completion of the merger.
Under BVI law MIHL shareholders who dissent to the merger and do not wish to
receive the merger consideration will be entitled to payment, in cash, of the
fair value of their MIHL class A ordinary shares ("the dissenter`s rights"),
provided that such MIHL shareholder who wishes to exercise this entitlement must
object to the merger either before the merger meeting or at the merger meeting,
but prior to the vote on the merger being taken. Naspers, the indirect
controlling shareholder of MIH BVI, may not approve the merger if it appears
that the total cash consideration to be paid to dissenting shareholders may
exceed US$25 million.
4. RATIONALE FOR THE REORGANISATION
The board of directors of each of Naspers, MIHH and MIHL believe that the
proposed reorganisation will significantly simplify the corporate structure and
operation of the Naspers group. Upon completion of the reorganisation investors
wishing to invest in MIHH and MIHL will be able to hold shares in Naspers, a
public company listed on the JSE Securities Exchange South Africa ("JSE") and
Nasdaq with high liquidity. The various boards of directors believe that this
simplified corporate structure will enable investors to assess Naspers and MIHL
more clearly, through a streamlining of the group structure and elimination of
the multiple entry points to the various listed pyramid companies.
These boards of directors also believe that the reorganisation will:
* facilitate the group`s ability to access capital markets in the US, through
Naspers`s secondary listing on Nasdaq
* improve the free float and liquidity of Naspers class N ordinary shares
* align the operational structure of Naspers, MIHH and MIHL
* improve the group`s funding flexibility, by unlocking cash pools
* have a positive effect on consolidated headline earnings per share, and
* improve the attractiveness of the group as an investment.
5. FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the
reorganisation on a MIHH and a Naspers shareholder, based on the published
audited results of MIHH and Naspers for the year ended 31 March 2002. This is
provided for illustrative purposes only and, because of its historical nature,
may not be a true reflection of the reorganisation into the future.
Before After After merger %
reorganisation merger and scheme Change
2,25 1 1 1 To To
MIHH Nas- Nas- Nas- MIHH Nas-
pers pers pers pers
shares share share share shareholder
Attributable market value:
23 September 2002 (cents)(1) 1 958 2 140 9%
30-day volume weighted
average (cents)(2) 1 696 1 795 6%
60-day volume weighted
average (cents)(3) 1 740 1 803 4%
Attributable loss (cents) (1 999) (1 320) (1 680) (1 751) 12% (33%)
Attributable loss from
continuing operations
(cents) (293) (251) (351) (376) (28%) (50%)
Attributable headline loss
(cents) (447) (313) (363) (373) 17% (19%)
Attributable headline loss
from continuing operations
(cents) (209) (162) (172) (175) 16% (8%)
Attributable net asset value
(cents) 854 936 1 369 1 464 71% 56%
Attributable tangible net
asset value (cents) 28 305 187 162 479% (47%)
Number of shares in
issue (`000) 148 084 231 332 263 824
Weighted average number
of shares (`000) 145 692 228 940 261 432
Notes:
(1) The closing market price of 2,25 MIHH shares (870 cents for 1 MIHH share)
and 1 Naspers class N ordinary share on 23 September 2002 being the practicable
trading day immediately preceding the publication of this announcement.
(2) The volume weighted average traded price of 2,25 MIHH shares and 1
Naspers class N ordinary share over the 30 trading days up to and including 23
September 2002.
(3) The volume weighted average traded price of 2,25 MIHH shares and 1
Naspers class N ordinary share over the 60 trading days up to and including 23
September 2002.
The financial effects are indicative only and have been based on the exchange
ratio of 1 Naspers class N ordinary share for every 2,25 MIHH shares held and
3,5 Naspers class N ordinary shares for every MIHL class A ordinary share. The
financial effects are based on the assumptions set out below.
For purposes of calculating attributable earnings and attributable headline
earnings per share "after the merger and scheme" it was assumed that:
* the scheme and the merger were in place with effect from 1 April 2001
* the number of Naspers class N ordinary shares "after the merger and scheme"
has been increased by 115 739 766, with effect from 1 April 2001, to reflect the
issue of Naspers class N ordinary shares in exchange for MIHH shares held by the
MIHH minorities, excluding the MIHH share trust and the MIHL class A shares held
by the MIHL minorities, excluding the MIHL share trust
* the issuance of an additional 21 327 148 Naspers class N ordinary shares to
acquire the interests of the MIHH and MIHL share trusts has been treated as
treasury shares in terms of the group`s accounting policies
* a goodwill amortisation charge of R293 million was realised on goodwill of R1
465 million arising from the scheme and the merger, and
* the respective portion of the MIHH and MIHL loss attributable to minorities
has been assumed by Naspers.
For purposes of calculating attributable net asset value per share and
attributable net tangible asset value per share "after the merger and scheme" it
was assumed that:
* the scheme and the merger were effected in full on 31 March 2002
* the number of Naspers class N shares "after the merger and scheme" has been
increased by 115 739 766 with effect from 31 March 2002 to reflect the issue of
Naspers class N ordinary shares in exchange for MIHH shares held by the MIHH
minorities, excluding the MIHH share trust and MIHL class A ordinary shares held
by the MIHL minorities, excluding the MIHL share trust
* the issuance of an additional 21 327 148 Naspers class N ordinary shares to
acquire the interests of the MIHL and MIHH share trusts has been treated as
treasury shares in terms of the group`s accounting policies
* goodwill of R1 465 million arose from the merger and the scheme including the
effect of estimated transaction costs of R50 million
* Naspers`s minority shareholders` interest relating to MIHH and MIHL "after the
merger and scheme" has been reduced by R292 million with effect from 31 March
2002 to reflect Naspers`s increase in shareholding in MIHH following the scheme,
and reduced by R770 million to reflect Naspers`s increase in shareholding in
MIHL following the merger (these minority interests represent the value of the
net assets acquired in the reorganisation), and
* Naspers class N ordinary shares have been issued with effect from 31 March
2002 to the MIHH minorities and MIHL minorities at R21,40 per Naspers class N
ordinary share.
It should be noted that the Naspers class N ordinary shares to be issued in
terms of the scheme and the merger will, from their date of issue, rank pari
passu in all respects (including the right to receive a dividend, when declared)
with all other Naspers class N ordinary shares then in issue.
6. OPINIONS, RECOMMENDATIONS AND UNDERTAKINGS
The directors of Naspers have considered the terms and conditions of the
proposed reorganisation and are of the unanimous opinion that those terms and
conditions are fair and reasonable to Naspers shareholders. Accordingly, the
directors of Naspers support the reorganisation and unanimously recommend that
Naspers shareholders vote in favour of the ordinary resolutions necessary to
implement the reorganisation. The directors of Naspers who hold Naspers shares,
intend to vote in favour of the ordinary resolutions necessary to implement the
reorganisation at the general meeting in respect of their own holdings of
Naspers shares.
Each of MIHL and MIHH has retained Merrill Lynch International to act as its
financial advisor in connection with the merger and the scheme, respectively. On
26 September 2002, Merrill Lynch delivered to each of the MIHL board of
directors and the MIHH board of directors an opinion to the effect that, as of
the date of the opinion, and based upon and subject to certain factors and
assumptions, the number of Naspers shares and ADSs to be exchanged for shares of
MIHL and MIHH respectively, in the merger and the scheme, respectively, was fair
from a financial point of view to the holders of MIHL`s shares and MIHH`s
shares, respectively, other than Naspers and its affiliates.
The full text of each of Merrill Lynch International`s opinions, which will
set forth the assumptions made, matters considered and qualifications and
limitations on the review undertaken by Merrill Lynch International, will be
included in the documentation to be issued in relation to the merger (the
"merger documentation") and the scheme (the "scheme documentation"). The
foregoing summary is qualified by reference to these opinions and you are urged
to read these opinions in their entirety.
The board of directors of MIHL has considered the terms and conditions of the
proposed merger and, inter alia, the opinion of Merrill Lynch, and is of the
opinion that those terms and conditions are fair and reasonable to MIHL
shareholders. Accordingly, the directors of MIHL unanimously support the merger
and recommend that MIHL shareholders vote in favour of the merger.
The directors of MIHH have considered the terms and conditions of the scheme
and, inter alia, the opinion of Merrill Lynch, and are of the unanimous opinion
that those terms and conditions are fair and reasonable to the MIHH minority
shareholders. Accordingly, the directors of MIHH unanimously support the scheme
and recommend that MIHH shareholders vote in favour of the scheme. The directors
of MIHH who hold MIHH shares intend to vote in favour of the scheme at the
scheme meeting in respect of their own holdings of MIHH shares.
7. CONDITIONS PRECEDENT
The scheme and the merger will become unconditional and binding subject to
the fulfilment of the following conditions precedent:
* approval of the ordinary resolutions by the Naspers shareholders in general
meeting necessary to approve the scheme and the merger and the issue of the
scheme and merger consideration
* the scheme being approved at the scheme meeting by a majority representing
not less than three-fourths of the votes exercisable by the MIHH minorities
present and voting either in person or by proxy at the scheme meeting
* the court sanctioning the scheme
* a certified copy of the order of court sanctioning the scheme being lodged
with, and registered by, the Registrar of Companies
* the granting of listings by the JSE of the Naspers class N ordinary shares
that form part of the scheme and merger consideration
* confirmation in writing by a director or secretary of MIHL that the merger
has been approved by a majority representing 662/3% of votes exercisable by the
MIHL shareholders in general meeting and has become unconditional, and
* any other regulatory approvals or consents necessary to implement the
scheme being obtained, including, but not limited to, approvals and consents
from the JSE, the SRP, the SEC, the NYSE and the exchange control department of
the South African Reserve Bank.
The companies undertake to announce on SENS (the Stock Exchange News Service)
as soon as reasonably possible after the fulfilment of the conditions precedent.
8. DOCUMENTATION
Documentation relating to the Naspers general meeting, including a revised
listings particulars will be posted to Naspers shareholders registered at the
close of business on Friday 18 October 2002, on or about Friday 25 October 2002.
Documentation relating to the scheme will be posted to MIHH shareholders
registered as such at the close of business on Friday 18 October 2002, on or
about Friday 25 October 2002.
This announcement is not an offer of shares for sale in the United States of
America. Naspers`s shares and ADSs may not be offered or sold in the United
States of Amerrica without registration or exemption from registration by the
SEC. The public offering of Naspers shares and ADSs to be made in the United
States to the MIHL minorities will be made by means of a prospectus that may be
obtained from Naspers. The prospectus will contain detailed information about
Naspers and its management and will include Naspers` financial statements.
Cape Town
26 September 2002
Merchant Bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Independent adviser to MIHH and MIHL boards of directors
Merrill Lynch
Global Markets & Investment Banking Group
Merrill Lynch International
Registered in England
Registration number 2312079
Regulated by The Financial Services Authority
Transactional sponsor to Naspers and MIHH
Investec Bank Limited
(Registration number 1969/004763/06)
Attorneys to the transaction
Webber Wentzel Bowens
Attorneys
Jan S. De Villiers Attorneys
Sponsor to Naspers
Gensec Bank Limited
(Registration number 1996/004744/06)
Reporting accountants and auditors
PricewaterhouseCoopers Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration no. 1998/012055/21)
Sponsor to MIHH
Merrill Lynch
Global Markets & Investment Banking Group
Merrill Lynch South Africa (Pty) Ltd
Registration number 1995/001805/07
Registered Sponsor and Member of the
JSE Securities Exchange South Africa
Date: 26/09/2002 03:07:54 PM Produced by the JSE SENS Department
