| Thu 2 Jan 2003, 17:15 | | M-Net/SuperSport - Announcement |
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M-Net/SuperSport - Announcement
M-NET
Electronic Media Network Limited
(Incorporated in the Republic of South Africa)
(Registration number 1985/002853/06)
Share code: MNS ISIN: ZAE000014304
(M-Net)
SuperSport International Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/004203/06)
Share code: MNS ISIN: ZAE000014304
("SuperSport")
DISTRIBUTION BY SUPERSPORT OF ITS SHAREHOLDING IN NASPERS LIMITED ("NASPERS") IN
ADDITION TO A DISTRIBUTION OF CASH IN M-NET AND SUPERSPORT BY WAY OF A CAPITAL
REDUCTION
1. Introduction
The M-Net and SuperSport boards of directors ("the M-Net/SuperSport boards")
have resolved, subject to the fulfilment of certain conditions precedent, to
distribute to holders of M-Net/SuperSport linked units ("M-Net/SuperSport
shareholders") all of the Naspers class N ordinary shares ("Naspers shares")
held by SuperSport ("the Naspers share distribution") and R75 million in cash
("the cash distribution") by way of a reduction of the share premium accounts in
M-Net and SuperSport.
The M-Net/SuperSport boards have therefore resolved to convene general meetings
of M-Net/SuperSport shareholders to consider resolutions to authorise the
distribution of the 11,4 million Naspers shares held by SuperSport, in addition
to a cash distribution of R37,5 million from SuperSport and R37,5 million from M
Net, by way of a capital reduction in terms of section 90 of the Companies Act
(Act 61 of 1973) ("the Act") ("the proposed capital reduction").
2. Rationale
Following the recent reorganisation of Naspers in which the minority interests
in MIH Holdings Limited ("MIHH") and MIH Limited ("MIHL") were acquired in
exchange for the issuance of new Naspers shares, SuperSport`s 5,53% investment
in MIHL was converted to a 3,88% investment in Naspers. This is not considered
to be a strategic investment for SuperSport. Furthermore, M-Net/SuperSport have
cash available that can be distributed simultaneously with the Naspers class N
ordinary shares held by SuperSport.
An added benefit of the proposed capital reduction is that it affords
participants of the M-Net/SuperSport Phuthuma Futhi share scheme the opportunity
to reduce, by approximately R35 million, the balance outstanding on their loans
to acquire
M-Net/SuperSport linked units. The M-Net/SuperSport boards regard it as
important that this scheme is successful.
3. The proposed capital reduction
SuperSport received 11 386 277 class N ordinary shares in Naspers in connection
with the acquisition of the MIHL minority interests by Naspers. M-Net/SuperSport
shareholders will receive the Naspers shares in accordance with the table of
entitlement set out below:
Number of Naspers shares to
Number of be distributed per 100
Naspers shares to M-Net/SuperSport linked
be distributed units held
Naspers 11 386 277 4,23654
The capital reduction ratio set out above is based on the assumption that
SuperSport will distribute 100% of its shareholding of 11 386 277 shares in
Naspers by way of the proposed capital reduction. In terms of the cash
distribution,
M-Net/SuperSport shareholders will receive R27,91 per 100 M-Net/SuperSport
linked units held. Both ratios are based on 268 763 276 M-Net/SuperSport shares
being outstanding.
4. Conditions precedent
The proposed capital reduction is subject to the passing, at general meetings of
M-Net/SuperSport shareholders, of the resolutions required to implement the
proposed capital reduction and the necessary regulatory approvals having been
obtained.
5. Pro forma financial effects of the proposed capital reduction
Subsequent to the proposed capital reduction, M-Net/SuperSport shareholders will
directly hold the Naspers shares. The table below sets out the pro forma
financial effects of the proposed capital reduction on an M-Net/SuperSport
shareholder, taking account of the assumptions detailed therein:
M-Net
Pro forma
Actual "after proposed Percentage
Per share (cents) "before" capital reduction" change
Earnings per share
- Basic 24,52 23,90 (2,53)
- Diluted 24,45 23,82 (2,58)
Headline earnings per share(1)
- Basic 24,52 23,9 (2,53)
- diluted 24,45 23,82 (2,58)
Net asset value per share(2) 76,49 61,57 (19,51)
SuperSport
Pro forma
Actual "after proposed Percentage
Per share (cents) "before" capital reduction" change
Earnings per share
- Basic (53,42) (53,96) (1,01)
- Diluted (53,01) (53,55) (1,02)
Headline earnings per share(1)
- Basic 17,15 16,61 (3,15)
- diluted 17,02 16,48 (3,17)
Net asset value per share(2) 148,10 54,85 (62,96)
1. The effect on earnings per share is based on 253 025 158 weighted average
number of M-Net and SuperSport shares in issue during the half-year ended 30
September 2002. In calculating earnings per share, M-Net`s and SuperSport`s
reviewed earnings for the half-year ended 30 September 2002 were adjusted on the
assumption that the proposed capital reduction was implemented on 1 April 2002.
The pro forma adjustments to M-Net`s and SuperSport`s reviewed earnings for the
half-year ended 30 September 2002 include provisions for various capital
reduction related expenses and the net effects of lower interest earned as a
result of the payment of the cash dividend.
2. The effect on the net asset value per share (including intangibles) is based
on 268 113 276 M-Net and SuperSport shares in issue as at 30 September 2002 in
both the "before" and "after the proposed capital reduction" figures. More
information on the assumptions applied will be provided in the detailed circular
to be posted to shareholders.
6. Opinions and recommendations
The M-Net/SuperSport boards have considered the terms and conditions of the
proposed capital reduction and are of the opinion that it will be advantageous
to M-Net/SuperSport shareholders. The M-Net/SuperSport boards consequently
recommend that M-Net/SuperSport shareholders vote in favour of the resolutions
necessary to implement the proposed capital reduction.
7. Documentation
Documentation relating to the M-Net and SuperSport general meetings, providing
further information and including the salient dates of the proposed capital
reduction, will be posted to M-Net/SuperSport shareholders on or about Friday 31
January 2003.
This announcement does not constitute an offer of securities for sale in the
United States. Securities may not be offered or sold in the United States
absent registration or an exemption from registration under the United States
Securities Act of 1933.
The distribution by SuperSport of Naspers shares has not been and will not be
registered under the United States Securities Act of 1933, as amended, or under
the applicable securities laws of any state of the United States. None of the
Naspers shares being distributed by SuperSport may, subject to certain
exceptions, be offered, sold or delivered, directly or indirectly, within the
United States. Accordingly, neither this announcement nor any copy of it may be
released, taken, transmitted or distributed, directly or indirectly, in or into
the United States or any of its territories or possessions, nor passed to
residents, corporations or other entities organised under the laws of any state
of the United States.
Randburg
2 January 2003
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Transactional Sponsor
Investec Bank Limited
(Registration number 1969/004763/06)
Joint Sponsors
Sasfin Bank Limited
(Registration number 1951/002280/06)
Wipcapital (Proprietary) Ltd
(Registration number 1997/021195/07)
Legal adviser
Webber Wentzel Bowens
Reporting accountants and auditors
PricewaterhouseCoopers Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration no. 1998/012055/21)
Date: 02/01/2003 12:00:00 PM Produced by the JSE SENS Department
