| Thu 2 Oct 2003, 8:54 | | ANNOUNCEMENT TO NEW AFRICA INVESTMENTS LTD SHAREH |
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MULTIDIRECT INVESTMENTS 180 (PTY) LTD, SAFIKA HOLDINGS (PTY) LTD, NEWSHELF 730
(PTY) LTD, INVESTEC BANK LTD & MINEWORKERS INVESTMENT COMPANY (PTY) LTD -
ANNOUNCEMENT TO NEW AFRICA INVESTMENTS LTD SHAREHOLDERS
MULTIDIRECT INVESTMENTS 180 (PTY) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2003/020101/07)
("Tiso")
SAFIKA HOLDINGS (PTY) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/001693/07)
("Safika")
NEWSHELF 730 (PTY) LIMITED (TO BE RENAMED CAPRICORN CAPITAL PARTNERS HOLDING
COMPANY (PTY) LIMITED)
(Incorporated in the Republic of South Africa)
(Registration number 2003/014470/07)
("Capricorn")
INVESTEC BANK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/004763/06)
("Investec")
MINEWORKERS INVESTMENT COMPANY (PTY) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1994/009420/07)
("MIC")
ANNOUNCEMENT TO NEW AFRICA INVESTMENTS LIMITED ("NAIL") SHAREHOLDERS
1. INTRODUCTION
NAIL shareholders are referred to the announcements made by NAIL on:
1.1 28 May 2003 in terms of which NAIL invited interested parties to
express an interest in making an offer for NAIL;
1.2 24 July 2003 in terms of which NAIL announced that it had received
notification of a firm intention to make an offer ("the original firm
intention") from a consortium comprising Tiso, Safika, Investec and
MIC;
1.3 17 September 2003 in terms of which NAIL announced that it had
received a letter from the abovementioned consortium indicating that
the due diligence investigation referred to in the original firm
intention had been completed to the satisfaction of such consortium
and, accordingly, the offer consideration contained in the original
firm intention would be increased from R9.00 to R10.50 ("the revised
firm intention"); and
1.4 22 September 2003 in terms of which NAIL announced, inter alia,
details of the offer made by Kagiso Media Limited, Johnnic
Communications Limited and Caxton and CTP Publishers and Printers
Limited ("the Caxton offer"). Investec is authorised to announce that,
subsequent to the announcement of the revised firm intention,
agreement has been reached in terms of which Capricorn will be
included in the consortium referred to in paragraphs 1.2 and 1.3
above. Accordingly, the consortium comprises Tiso, Safika, Capricorn,
Investec and MIC ("the Tiso Consortium" or "the Tiso Consortium
members"). The Tiso Consortium will, subject to the fulfilment of the
condition precedent set out in paragraph 5.4 below, offer to acquire,
from each NAIL shareholder (other than Investec and Safika) ("NAIL
minority shareholders") all or any of the NAIL ordinary and "N" shares
("NAIL shares") held by it ("the offer"). Further details of the Tiso
Consortium and the offer are set out below.
2. RATIONALE FOR THE OFFER
The members of the Tiso Consortium believe that, having obtained the
support of NAIL"s controlling shareholder, Phaphama Holdings (Proprietary)
Limited ("Phaphama"), they will be able to unlock value and resolve a
complex situation for NAIL shareholders by making the offer in a manner
that is simple, quick and, once the offer becomes unconditional, provides
certainty to NAIL shareholders who wish to accept the offer.
The offer presents an opportunity for NAIL shareholders to extract
themselves from the uncertainty that is inherent in any asset sales
process, which, in the case of NAIL, includes the uncertainty relating to:
* the ownership of the underlying businesses which may destroy value if
it is not resolved quickly;
* the pre-emptive rights that exist over a number of the major assets,
which complicate and delay the sales process; and
* a complicated and lengthy Independent Communications Authority of
South Africa ("ICASA") approval process.
NAIL shareholders should carefully consider the conditionality and
uncertainty of other potential offers and appropriately weigh up the risks
involved in any offer becoming unconditional.
The Tiso Consortium"s offer has been structured in as simple a manner as
possible and with minimal conditionality to allow NAIL shareholders the
maximum degree of certainty when accepting the offer:
* by obtaining the controlling shareholders" support;
* by eliminating the need to wait until completion of an uncertain
regulatory process and asset disposal process; and
* by eliminating the market risks pertaining to the listed securities
immediately.
3. THE TISO CONSORTIUM
To the extent that the NAIL shares held by NAIL minority shareholders who
accept the offer ("the offer shares") are acquired, the Tiso Consortium
members will be the ultimate owners of such offer shares. It is intended
that the offer shares will be acquired individually by the Tiso Consortium
members in the proportions as indicated below:
Shareholding (%)
Tiso 20
Safika 5
Capricorn 20
Investec 35
MIC 20
Total 100
Assuming the offer becomes unconditional, the black economic participation
in NAIL will improve. Tiso, Safika, and MIC are black controlled entities
and Investec Limited, the holding company of Investec, is a black empowered
entity.
4. PHAPHAMA UNDERTAKINGS
As Phaphama has undertaken not to accept the offer in respect of its 52,5%
holding in the NAIL ordinary shares, NAIL will remain controlled by
Phaphama regardless of the level of acceptances of the offer. Accordingly
the ordinary shareholders cannot be expropriated as contemplated under
section 440K of the Companies Act 61 of 1973, as amended.
Phaphama has considered this offer and believes that it is superior as a
result of its simplicity and limited conditionality. Accordingly, subject
to the Tiso Consortium obtaining at least 50% of the NAIL "N" shares in
issue, or such lesser amount of the NAIL "N" shares as determined by the
Tiso Consortium, Phaphama has undertaken to vote against the Caxton offer
at any general meeting of NAIL shareholders that may be held to consider
such offer.
Phaphama has, subject to approval by the Competition authorities granted,
at no cost, a conditional option to the members of the Tiso Consortium to
acquire all of its shares in the issued share capital of NAIL at the same
price paid to the offer participants (plus interest thereon at a call rate
plus 2% per annum from the date on which the offer becomes unconditional)
("the conditional option"). The exercise of such option shall be subject to
the fulfilment of the following conditions:
* the offer has closed and has become unconditional; and
* to the extent required, ICASA unconditionally or on conditions
acceptable to the members of the Tiso Consortium, approves the sale of
the NAIL shares held by Phaphama to the members of the Tiso
Consortium.
5. TERMS OF THE OFFER
5.1 OFFER CONSIDERATION
Each NAIL shareholder will receive the offer consideration being
R10.50 in cash per NAIL share held if there are no distributions of
cash or listed shares by NAIL subsequent to the opening date of the
offer ("the distributions") or, if there are such distributions each
NAIL shareholder will receive R10.50 in cash per NAIL share held less:
* any cash amount per NAIL share distributed by NAIL subsequent to
the opening date of the offer; and
* the value per NAIL share of any listed shares distributed by NAIL
to its shareholders after the opening of the offer, where such
value is calculated based on the 30-day weighted average price of
the relevant listed share (calculated by reference to the closing
market price and volume traded on the 30 days on which such
shares actually traded on the JSE Securities Exchange South
Africa for the period ending on the record date on which NAIL
shareholders must be recorded in the registers of NAIL
shareholders to receive such distribution) ("the offer
consideration").
For the avoidance of any doubt, the value of any distributions that
may be made to NAIL shareholders after the opening date of the offer
will be set off against the offer consideration in respect of the
remaining NAIL minority shareholders who have not accepted the offer
when such distributions are made, and the offer consideration will be
reduced accordingly.
The offer envisages that the NAIL shares held by NAIL minority
shareholders will be acquired by the Tiso Consortium fully paid,
without any right of set-off, and free from all liens, counterclaims,
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 in the event there
are no distributions prior to the close of the offer, 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 or transfer of the NAIL shares into the names of
the relevant Tiso Consortium members.
5.2 PERIOD OF THE OFFER
The offer will be open for acceptance on Thursday, 2 October 2003
("the opening date") and will close at 12:30 on the closing date,
which is expected to be on Friday, 24 October 2003.
5.3 CASH CONFIRMATION
The Tiso Consortium has confirmed to the Securities Regulation Panel
("SRP") that it has sufficient cash resources and/or facilities with
which to meet its obligations to NAIL in relation to the offer.
5.4 THE CONDITION PRECEDENT
The offer is subject to the fulfilment of the condition precedent that
the Tiso Consortium acquires, pursuant to the offer, so many NAIL "N"
shares as will, when added to the NAIL "N" shares held directly by the
Tiso Consortium members, exceed 50% of the NAIL "N" shares in issue.
The Tiso Consortium has reserved the right to amend with SRP approval
or waive the above condition precedent before the offer closes.
Should the offer become unconditional, the Tiso Consortium will
approach ICASA and the Competition authorities in relation to the
conditional option on the NAIL ordinary shares from Phaphama as
detailed in paragraph 4 above.
The Tiso Consortium or members of the Tiso Consortium have obtained
written support to accept the offer from NAIL shareholders
representing approximately 29,7% of the NAIL "N" shares. The
aforementioned written support together with the 15,1% of the NAIL "N"
shares held by the Tiso Consortium members amounts to approximately
44,8% of the NAIL "N" shares.
6. PRO FORMA FINANCIAL EFFECTS OF THE OFFER ON NAIL MINORITY SHAREHOLDERS
The table below sets out the pro forma financial effects of the offer on a
NAIL minority shareholder who accepts the offer:
Per NAIL ordinary share Per NAIL "N" share
Before After Before After
the the the the
offer offer % offer offer %
Notes (cents) (cents) Change (cents) (cents) Change
Market value
- 1 October 2003 1 991.0 1 050.0 6.0 1 030.0 1 050.0 1.9
Market value
- 16 September 2003 2 865.0 1 050.0 21.4 960.0 1 050.0 9.4
Market value
- 23 July 2003 3 725.0 1 050.0 44.8 770.0 1 050.0 36.4
Market value
- 27 May 2003 4 586.0 1 050.0 79.2 650.0 1 050.0 61.5
The pro forma financial effects have been prepared for illustrative
purposes only, to provide information on how the offer might have affected
the financial information presented and, because of its nature, may not
give a true reflection of the financial position to NAIL minority
shareholders. The pro forma financial effects have been based on the
following:
Notes:
1. The closing market price per NAIL ordinary share and NAIL "N" share on
1 October 2003, being the last trading day preceding the publication
of this announcement, compared to the offer consideration of R10.50
per NAIL ordinary share and NAIL "N" share assuming no distribution of
cash or listed shares by NAIL after the opening date of the offer.
2. The closing market price per NAIL ordinary share and NAIL "N" share on
16 September 2003, being the last trading day prior to the publication
of the revised firm intention, compared to the offer consideration of
R10.50 per NAIL ordinary share and NAIL "N" share assuming no
distribution of cash or listed shares by NAIL after the opening date
of the offer.
3. The 30-day weighted average share price per NAIL ordinary share and
NAIL "N" share to 23 July 2003, being the last trading day immediately
prior to the publication of the original firm intention, compared to
the offer consideration of R10.50 per NAIL ordinary share and NAIL "N"
share assuming no distribution of cash or listed shares by NAIL after
the opening date of the offer.
4. The closing market price per NAIL ordinary share and NAIL "N" share on
27 May 2003, being the last trading day prior to the statement
released by NAIL inviting proposals from interested parties to express
an interest for all or part of the business of NAIL or to explore
merger alternatives, compared to the offer consideration of R10.50 per
NAIL ordinary share and NAIL "N" share assuming no distribution of
cash or listed shares by NAIL after the opening date of the offer.
No account has been taken of any tax in calculating the above
financial effects.
7. DOCUMENTATION
The offer document is available to NAIL shareholders from Thursday, 2
October 2003 and will be posted to NAIL shareholders in due course.
Sandton
2 October 2003
Investment bank to the Tiso Consortium
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Independent advisor to Safika
AMB Advisory Services Limited
(Registration number 1996/016470/06)
Legal advisor to the Tiso Consortium
MOSS MORRIS ATTORNEYS
Legal advisor to Safika
DEREK H RABIN & ASSOCIATES (PTY) LIMITED
(Registration no- 2002/013811/07)
Date: 02/10/2003 07:44:17 AM Produced by the JSE SENS Department
