| Thu 24 Jul 2003, 12:43 | | Nail - Announcement of a firm intention to make an |
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Nail - Announcement of a firm intention to make an offer and cautionary
announcement
new africa investments limited
(Incorporated in the Republic of South Africa)
(Registration Number 1993/002467/06)
Share codes: NAI and NAN
ISIN: ZAE00012134 and ZAE00011946
("NAIL")
Announcement of a firm intention to make an offer and cautionary announcement
1. INTRODUCTION
1.1 In an announcement which appeared in the press on 29 May 2003 ("the
announcement"), NAIL invited those persons who were interested, whether
individually or as a consortium, in acquiring the shares in or assets of NAIL,
or in concluding any merger with NAIL or in concluding any comparable
transaction with NAIL to submit a non-binding "expression of interest", which
would be viewed as part of a shortlisting process. It was further indicated
that the sub-committee referred to in the announcement ("the sub-committee")
would inform interested parties whether or not they had been shortlisted and
would communicate to shortlisted parties details of the remainder of the
process. In addition, it was stated in such announcement that NAIL reserved the
right, inter alia, to deviate from, or to discontinue, the process. This was
done in case any event occurred which necessitated the taking of such action
including the receipt of an offer which required that NAIL follow procedures set
out in the Securities Regulation Code on takeovers and mergers ("the SRP code").
1.2 NAIL received a number of expressions of interest and informed those
interested parties who had been shortlisted of the details of the remainder of
the bidding process. Subsequent to such communication to shortlisted parties,
NAIL received a firm intention to make an offer from a consortium comprising
Investec Bank Limited, TISO Group (Proprietary) Limited, Safika Holdings
(Proprietary) Limited and Mineworkers Investment Company (Proprietary) Limited
("the Consortium"), details of which firm intention are set out in paragraph 0
below.
1.3 In light of this unsolicited receipt of the Consortium"s firm intention
outside of NAIL"s bidding process, various periods contained in the rules of the
SRP code have become applicable. Accordingly, the sub-committee believes it to
be in the interests of NAIL"s shareholders to revise its bidding process (which,
as set out above, NAIL reserved the right to do) to ensure that it is
appropriate to these changed circumstances. The sub-committee remains committed
to ensuring that selected short listed parties are given information, and a
reasonable time within which, to submit offers to NAIL (including offers for any
individual assets), subject to the applicable time periods prescribed in the SRP
code. NAIL will consider the Consortium"s offer together with any other offers
which are received. NAIL will communicate individually with applicable parties
as to the latest date on which it suggests offers should be submitted, any
further short listing procedures as well as the procedures which will be adopted
in relation to the due diligence investigation.
2. CONTENTS OF THE CONSORTIUM"S FIRM INTENTION TO MAKE AN OFFER
2.1 Terms of the offer
2.1.1 The Consortium has offered to acquire 100% of the issued shares
(ordinary and "N" shares) in NAIL ("NAIL shares" or "NAIL share") as outlined
below. The offer is subject to the conditions precedent outlined in paragraph 0
below.
2.1.2 The offer price is R9,00 per NAIL share in cash. This represents a
premium of 20% and 42% to the 30-day weighted average price of the ordinary
shares and "N" shares respectively.
2.1.3 The Consortium has reserved the right to structure the offer in the
most appropriate manner (either by way of a section 440k offer ("a section 440k
offer") or a section 311 scheme of arrangement ("a scheme")).
2.1.4 The offer envisages that the NAIL shares will be acquired by the
Consortium fully paid, without any right of set-off, and free of all liens,
counterclaims, equities, mortgages, charges, encumbrances, rights of pre-emption
and other interests whatsoever, and together with all rights now or hereafter
attaching thereto, including all voting rights and the right to receive and
retain all dividends, other distributions, benefits or rights hereafter
declared, made or paid, irrespective of the actual date of registration of
transfer of the NAIL shares into the name of the Consortium.
2.2 Conditions precedent
2.2.1 The offer is subject to the fulfilment of the following conditions
precedent:
2.2.1.1 the Consortium being afforded the opportunity to conduct a one-week
head office due diligence investigation of NAIL to its satisfaction, it being
recorded that the Consortium will be satisfied should the due diligence
investigation reveal that, other than as a consequence of the unbundling by
Johnnic Holdings Limited of its shares in MTN Limited, the financial position,
guarantees, contingent liabilities, third party commitments and NAIL"s effective
holding in major subsidiaries, associates and investments are not materially
different to that disclosed in NAIL"s annual financial statements for the year
ended 31 December 2002;
2.2.1.2 a commitment from the NAIL board that it will not acquire or dispose
of any significant assets, issue further options or incur further holding
company debt until the offer is concluded or lapses;
2.2.1.3 a commitment from the NAIL board that it will not make any
distributions in cash or in specie (including but not limited to dividends) to
its shareholders until the offer is concluded or lapses;
2.2.1.4 to the extent required, the approval by the NAIL shareholders in a
meeting;
2.2.1.5 to the extent required, the approval by the relevant regulatory
authorities, including but not limited to the JSE Securities Exchange South
Africa, the Securities Regulation Panel and the Competition Commission; and
2.2.1.6 acquiring at least 90% of both the NAIL ordinary and "N" shares in
issue by 30 November 2003.
Subject to the provisions of the SRP code, the Consortium reserves the right to
waive the condition set out in paragraph 0 or waive or amend the condition set
out in paragraph 0 before the offer closes.
The offer is stated not to be subject to receiving approval from the Independent
Communications Authority of South Africa ("ICASA""). The Consortium states that
it accepts full risk on ICASA related matters.
2.3 General
2.3.1 Following the due diligence referred to in paragraph 0 above, the
Consortium has indicated that it may prefer to make an appropriate cash offer
for all the underlying assets and liabilities of NAIL.
2.3.2 The Consortium (including Investec Bank Limited) has confirmed that it
has sufficient cash resources and/or facilities to meet its obligations to NAIL
in relation to the offer.
2.3.3 The Consortium has informed NAIL that it and/or its members have
obtained either options over the NAIL shares or the written support for the
section 440k offer or the scheme from shareholders representing approximately
50% of the market capitalisation of NAIL. Certain of these options are subject
to the condition that if a higher offer is made to NAIL ordinary and "N"
shareholders by a third party and announced on SENS, the Consortium will have 7
days to match the higher offer, failing which the aforementioned option
agreement will lapse.
2.3.4 Investec Bank Limited has informed NAIL that the Consortium has an
effective shareholding, through Phaphama Holdings (Proprietary) Limited, of
18.32% and 0.56% in NAIL ordinary shares and "N" shares respectively. Mr S
Macozoma is the chief executive officer of NAIL and M Ngoasheng is an executive
director of NAIL and they are both directors and shareholders of Safika Holdings
(Proprietary) Limited, which holds shares in Phaphama Holdings (Proprietary)
Limited. Furthermore, Mr S Macozoma has an option to acquire 2,158,700 NAIL "N"
shares as part of NAIL"s share incentive scheme.
3. NOTICE TO EXERCISE CAUTION
A further announcement will be made in due course and in the interim parties are
advised to exercise caution in their dealings in NAIL shares.
24 July 2003
C
