| Fri 9 May 2003, 16:11 | | THE ACQUISITION BY KERSAF OF AN EFFECTIVE 18,6% |
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KERSAF INVESTMENTS LIMITED - L
EFFECTIVE INTEREST IN SISA TO 62.2%
KERSAF INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1967/007528/06)
SHARE CODE: KER ISN: ZAE000003844
("KERSAF")
THE ACQUISITION BY KERSAF OF AN EFFECTIVE 18,6% INTEREST IN SUN INTERNATIONAL
(SOUTH AFRICA) LIMITED BRINGING KERSAF"S TOTAL EFFECTIVE INTEREST IN SISA
TO 62.2%
1. INTRODUCTION
Pursuant to Kersaf"s ongoing assessment of its structure and various
investments and operations, Investec Bank Limited is authorised to announce that
Kersaf has concluded an agreement with the North West Development Corporation
(Proprietary) Limited (under Judicial Management) ("NWDC") for the acquisition
through a wholly-owned subsidiary, subject to the conditions precedent set out
in paragraph 2.4 below, of an 18.6% effective interest in Sun International
(South Africa) Limited ("SISA") for a total purchase consideration of R547
million or R2,50 per SISA share("the acquisition").
2. THE ACQUISITION
2.1 Introduction
The Kersaf group ("the Group") Kersaf owns a effective 50,1% interest in Sun
International (South Africa) Holdings (Proprietary) Limited ("SISA Holdings"), a
company that directly owns 37,3% of SISA. The NWDC owns the remaining 49,9% of
SISA Holdings. Although Kersaf controls SISA through its direct and indirect
holdings, the successful implementation of the acquisition will increase
Kersaf"s effective interest in SISA from 43.6% to 62.2%. SISA Holdings owns no
assets other than its 37,3% equity interest in SISA, which equates to
438 600 000 SISA shares.
In terms of legislation regulating the ability of government entities to
retain investments in certain industries, the NWDC was required to dispose of
its 49,9% interest in SISA Holdings prior to the close of business on Friday, 9
May 2003. The acquisition is in line with Kersaf"s stated intention to simplify
its group structure and unlock shareholder value.
2.2 Rationale for the acquisition
Kersaf has concluded the acquisition primarily due to the fact that:
- the acquisition will bring about a simplification of the Group structure which
is expected to enhance Kersaf"s inherent value;
- it represents an additional investment in the Group"s core gaming and resorts
activities thereby increasing the potential alignment of its own interest with
that of its largest investment; and
- the acquisition will enable Kersaf to increase its interest in the assets of
SISA which it already manages and controls.
2.3 Purchase consideration for the acquisition
The purchase consideration for the acquisition is R547 million which equates to
an effective price of R2,50 per SISA share. The purchase consideration is
payable by Kersaf in cash upon the successful implementation of the acquisition.
The purchase consideration will be interest free until 10 June 2003 and
thereafter will bear interest at a rate of 14,5% per annum. Kersaf will fund the
acquisition through existing resources, including through the sale of shares in
Kerzner International Limited ("KZL"), and additional banking facilities.
2.4 Conditions precedent
The acquisition is subject to the approval by the relevant regulatory
authorities, where applicable, including the provincial gaming boards and the
competition authorities. These approvals are required prior to the
implementation of the acquisition.
2.5 Empowerment
Kersaf has undertaken to continue to ensure that there is an appropriate level
of empowerment within the Group and particularly within the SISA structures.
This will include individuals and groupings resident in the North West Province.
2.6 Financial effects of the acquisition
The table below sets out the financial effects of the acquisition on a Kersaf
shareholder on the basis that the acquisition was effective from 1 July 2002 to
31 December 2002 for the calculation of the basic loss per share, headline loss
per share and adjusted headline earnings per share and was effective on 31
December 2002 for the calculation of net asset value per share:
Before (5) Adjustments After Change
Basic loss per share (cents) (1) (3) (4) (122) (8) (130) (7%)
Headline loss per share (cents)(1) (4) (295) (2) (297) (1%)
Adjusted headline earnings
per share (cents) (1) (4) 98 2 100 2%
Net asset value per share (Rands) (2) 26.59 - 26.59 -
Notes:
(1) Based on the weighted average number of Kersaf shares in issue of 90 050
000 for the six month period ended 31 December 2002.
(2) Based on the number of Kersaf shares in issue of 90 050 000 at 31 December
2002.
(3) Assumes the amortisation of goodwill relating to the acquisition of R5
million for the six month period ended 31 December 2002.
(4) Assumes additional group borrowings of R350 million, utilisation of R150
million from the proceeds of the sale of KZL shares and the utilisation of R47
million of existing cash resources. Interest on borrowings has been calculated
at an after tax rate of 9.5% per annum.
(5) Based on the Kersaf interim Financial Statements for the six months ended 31
December 2002.
3. SECURITIES REGULATION PANEL ("SRP")
The Group currently directly controls approximately 25% of SISA and through a
voting pool agreement jointly controls, together with the NWDC through its
shareholding in SISA Holdings, a further 37,3% of SISA. Accordingly, the SRP has
ruled that this acquisition by Kersaf of shares in SISA will not constitute an
effected transaction in terms of the provisions of the SRP Code due to the fact
that Kersaf is already entitled to exercise or cause to be exercised in excess
of 50% of the votes in SISA.
As a result, an offer to the SISA minority shareholders is not required to be
made by Kersaf in terms of the SRP Code pursuant to the acquisition.
4. CIRCULAR TO KERSAF SHAREHOLDERS
Given the monetary value of the acquisition, Kersaf shareholder approval is
not required for the successful implementation of the acquisition. However, a
circular incorporating full details relating to the acquisition is in the
process of being prepared and will be sent to Kersaf shareholders on or about
06 May 2003.
Sandton
9 May 2003
Merchant Bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor
Investec Bank Limited
(Registration number 1969/004763/06)
Corparate Law AAdvisers
Edward Nathan & Friedland (Pty) Ltd
Corporate Law advisers & Consultants
(Registration number 1999/026464/07)
