| Fri 3 Oct 2003, 15:07 | | ANNOUNCEMENT |
|
Primedia -
PRIMEDIA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/003355/06)
Share code: PMA ISIN: ZAE000035119
Share code: PMN ISIN: ZAE 000035127
("Primedia")
ANNOUNCEMENT REGARDING:
* the proposed acquisition by Primedia of certain of the radio interests of New
Africa Investments Limited ("NAIL") as well as the outdoor interests of NAIL;
and
* further cautionary announcement.
1. Introduction
Primedia shareholders are referred to the announcement published on the
Securities Exchange News Service on 2 October 2003 relating to an offer ("the
Tiso Consortium offer") by a consortium ("the Tiso Consortium") to acquire 100%
of the ordinary and "N" ordinary shares in NAIL (collectively, "NAIL shares"),
other than the NAIL shares held by Investec Bank Limited and Safika Holdings
(Proprietary) Limited, for a cash consideration of R10.50 per NAIL share. The
Tiso Consortium offer is subject to the Tiso Consortium obtaining not less than
50% of the NAIL "N" ordinary shares in issue by the closing date of such offer
("the condition precedent to the Tiso Consortium offer").
Further to the cautionary announcement published by Primedia on 2 September
2003, Investec Bank Limited is authorised to announce that, agreement has been
reached, subject to the fulfilment of the conditions precedent set out in
paragraph 2.6 below, in terms of which undertakings have been given to use best
endeavours to ensure that NAIL becomes bound by put and call arrangements in
respect of the acquisition by Primedia or any of its subsidiary companies of
certain of the radio interests of NAIL and the outdoor interests of NAIL ("the
Primedia acquisitions"), details of which are set out in paragraph 2 below.
2. The Primedia acquisitions
2.1 Details of the Primedia acquisitions
Each of the members of the Tiso Consortium and Phaphama Holdings
(Proprietary) Limited, which holds 52.5% of the NAIL ordinary shares in issue,
have agreed to use their best endeavours to support and vote in favour of
arrangements to give effect to the acquisition by Primedia or any of its
subsidiary companies from NAIL of the following assets:
- NAIL"s 66.5% interest in KFM (Proprietary) Limited ("KFM") including 100% of
the funding arrangements with KFM"s empowerment shareholders;
- one third of NAIL"s 24.9% interest in Kaya FM (Proprietary) Limited ("Kaya
FM") and one third of all NAIL"s interests in the Kaya FM funding arrangements,
being NAIL"s funding arrangements with Kaya FM"s empowerment shareholders; and
- NAIL Outdoor (Proprietary) Limited ("NAIL Outdoor").
2.2 Description of the assets to be acquired in terms of the Primedia
acquisitions
2.2.1 KFM
KFM is the number one regional radio station in the Western Cape, with
over one million listeners, based on the past seven days listenership figures.
The station broadcasts on the FM frequency a blend of popular adult contemporary
music.
NAIL has principally funded the empowerment stake of Broadcape Investments
(Proprietary) Limited which owns 28.5% of KFM through preference share
arrangements which entitles NAIL to an equity linked return on its funding.
2.2.2 Kaya FM
Kaya FM was launched in August 1997 as a regional FM radio station. It
broadcasts throughout the Gauteng area on the FM frequency signal, 95.9, and
currently has 830 000 listeners per week based on the past seven days
listenership figures . Kaya FM"s broadcast content is 60% music and 40% talk.
The music format offers a diverse mix from adult contemporary music to smoother
sounds like R&B, soul and jazz.
NAIL has principally funded the empowerment stake of other empowerment
shareholders into Kaya FM through preference share arrangements which entitles
NAIL to an equity linked return on its funding.
2.2.3 NAIL Outdoor
The business of Nail Outdoor has two divisions. The first is the outdoor
media division, which has been established mainly through acquisition and owns
over 400 advertising boards nationally, a number of which are high profile super
prime sights.NAIL Outdoor has also made inroads into the African market through
the establishment of joint ventures in Nigeria, Ghana, Botswana and the
Democratic Republic of the Congo, which are making a positive contribution to
NAIL Outdoor. This has expanded NAIL Outdoor"s client base to multinationals
expanding throughout the African continent. The second division is a signage
business, which trades under the name of Natanya Signs, one of the leading
signage brands in South Africa.
2.3 Rationale for the Primedia acquisitions
Primedia is a foremost media company in South Africa with leading positions
in the radio and outdoor industries. The Primedia acquisitions are quality media
assets, and are highly complementary to Primedia"s activities in these sectors
and will further Primedia"s strategic objective of broadening exposure to
specific media types in which it already successfully operates. Primedia
believes that it will be able to add value to all these assets and believes they
will further benefit Primedia shareholders through a meaningful contribution to
both earnings and free cash flow.
2.4 Purchase consideration
The consideration payable by Primedia in terms of the Primedia acquisitions
is R218.5 million. Primedia will settle this amount through banking facilities
that have been approved by a consortium of banks and from its strong cash flows.
2.5 Other arrangements
Primedia has agreed to provide underpins of R218.5 million in total in
relation to NAIL"s radio and outdoor interests.
2.6 Conditions precedent
The Primedia acquisitions and arrangements are subject to:
- the fulfilment of the condition precedent to the Tiso Consortium offer; and
- Primedia obtaining the necessary regulatory approvals.
3. Further announcement and further cautionary announcement
A further announcement regarding the Primedia acquisitions, including the
financial effects relating thereto, will be published after the closing date of
the Tiso Consortium offer. Primedia shareholders are advised to continue to
exercise caution in dealing in their shares until Primedia makes a further
announcement in this regard.
Sandton
2 October 2003
Independent advisor
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Corporate law advisor
Edward Nathan & Friedland (Pty) Ltd
Corporate Law advisers & Consultants
(Registration number 1999/026464/07)
Sponsor
Investec Bank Limited
(Registration number 1969/004763/06)
Date: 02/10/2003 05:58:05 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
