| Thu 7 Jul 2005, 15:17 | | Hosken Consolidated Investments Limited - Financia |
|
Hosken Consolidated Investments Limited - Financial Effects Of
Hci`s Increased Holding In Johnnic Holdings Limited From 20.7%
To 39.8% And Withdrawal Of Cautionary Announcement
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
(Share code: HCI ISIN: ZAE000003257)
(`HCI` or `the company` or (`the group`))
Financial effects of HCI`s increased holding in Johnnic
Holdings Limited from 20.7% to 39.8% and withdrawal of
cautionary announcement
1. Introduction
On 4 April 2005 HCI shareholders were advised that HCI
had acquired, via a wholly owned subsidiary, a 20.7 %
interest in Johnnic Holdings Limited (`Johnnic`).
Shareholders are advised that a further 9.1% interest in
Johnnic (15 180 535 shares) was acquired by the group in
various tranches on the open market commencing on 19
April 2005, with the last purchase taking place on 23 May
2005 at an average price of R9,50 per Johnnic ordinary
share, amounting to a total cash consideration of R145.1
million. The cash consideration was funded out of medium
term debt facilities.
As announced in the press on 1 July 2005 HCI acquired a
further 16 499 321 shares from Gold Reef Casino Resorts
Limited (`GRC`) at a price of R9.75 per Johnnic ordinary
share, amounting to a total cash consideration of R160.8
million. The cash consideration was funded out of medium
term debt facilities.
(collectively the `acquisitions`)
HCI has confirmed to GRC that it is agreeable to
supporting GRC, should GRC make an offer to acquire the
shares in Tsogo Sun Holdings (Proprietary) Limited, on
such terms as may be negotiated with SABSA Holdings
(Proprietary) Limited, subject to certain conditions, and
HCI will not compete with such offer.
As HCI is now the holder of more than 35% of the issued
share capital of Johnnic, in terms of the Securities
Regulation Code on Take-overs and Mergers and the Rules
of the Securities Regulation Panel (`SRP`), a mandatory
offer (`the offer`) must be extended by HCI to Johnnic
shareholders, other than HCI, to acquire the remainder of
the Johnnic shares. Shareholders are referred to the
announcement published on the Securities Exchange News
Service (`SENS`) of the JSE Securities Exchange South
Africa (`JSE`) on Friday, 1 July 2005.
The purpose of this announcement is to inform
shareholders of the financial effects of the
acquisitions.
2. Nature of the business of Johnnic
Johnnic, listed on the JSE Securities Exchange South
Africa (`JSE`), is an investment holding company with
interests in the entertainment, casino, exhibition and
property businesses.
3. Rationale for the acquisitions
HCI`s strategic objective is to increase their exposure
to Johnnic as and when possible. HCI considers the
acquisition to be opportune as it furthers HCI`s ongoing
gaming strategies.
4. Conditions
HCI`s continued holding of the acquired 40% shareholding
in Johnnic is conditional on the approval by the relevant
Gaming Authorities, to the extent required, and HCI is
processing the necessary applications.
5. Financial effects
Based on the published reviewed group annual results of
HCI for the year ended 31 March 2005, the pro forma
financial effects of the acquisitions on HCI`s earnings,
headline earnings, adjusted headline earnings and net
asset carrying value (`NACV`) per share are set out
below. The pro forma financial information has been
prepared for illustrative purposes only and because of
its nature may not give a true picture of HCI`s financial
position and results of operations.
Before the After the %
acquisition acquisitions Chang
s (1) (2) e
Earnings per share 589.06 555.74 (5.65
(cents) (3) )
Headline earnings 353.23 319.91 (9.43
per share (cents) )
(3)
Net asset carrying 1 191 1 191 -
value per share
(cents)
Assumptions:
1. Based on the reviewed group annual results of HCI for the
year ended 31 March 2005.
2. Based on the assumption that the acquisition was effected
on 1 April 2004 for income statement purposes and on 31 March
2005 for balance sheet purposes.
3. An adjustment was made to take into account the interest
that would have been payable on the purchase consideration at
the average cost of debt applicable during the period 1 April
2004 to 31 March 2005. No adjustment has been made to account
for any income or dividends from the investment in Johnnic.
4. The investment in Johnnic has been recognised as an
available for sale asset.
5. The net tangible asset value has not been included as the
effect thereon is no different to that of NACV.
6. Johnnic reported a net asset value of R10 per Johnnic
share in its audited preliminary results for the year ended 31
March 2005.
6. HCI general meeting
HCI intends convening a general meeting of the
shareholders of HCI to approve the offer. A circular
containing the notice of such general meeting and further
information relating to the offer will be posted to the
shareholders of HCI in due course.
7. Withdrawal of cautionary announcement
HCI shareholders are referred to the cautionary
announcement, dated 1 July 2005, and are advised that
caution need no longer be exercised when dealing in HCI
shares.
7 July 2005
Durban
Investment Bank Lead sponsor Joint sponsor Corporate
and Advisor Advisor
Investec Bank Ernst & Investec Bank HJS
Limited Young Limited
Date: 07/07/2005 03:06:42 PM
Produced by the JSE SENS Department
