| Fri 5 Aug 2005, 11:21 | | HCI - Increased consideration and revised terms of |
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HCI - Increased consideration and revised terms of the mandatory offer to the
shareholders of Johnnic
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
(Share code: HCI ISIN: ZAE000003257)
(`HCI`)
Introduction
The shareholders of HCI and Johnnic are referred to the announcement published
by HCI on the Securities Exchange News Service (`SENS`) of the JSE Limited
(`JSE`) on Monday, 1 August 2005 as well as the circular (`offer circular`)
posted to Johnnic shareholders on such date, detailing the terms of the
mandatory offer (`the offer`) extended by HCI, through its wholly-owned
subsidiary, Mercanto Investments (Proprietary) Limited (`Mercanto`), to Johnnic
ordinary shareholders (`Johnnic shareholders`), other than HCI or its
subsidiaries, to acquire the remainder of the issued ordinary shares in the
capital of Johnnic (`offer shares`).
Original terms of the offer
In the offer circular, HCI offered, through Mercanto, subject to the fulfilment
of the conditions precedent set forth in paragraph 5 below (`conditions
precedent`), to acquire all (or part) of the offer shares, in return for an
offer consideration of 975 cents per offer share (`offer consideration`),
settled at the election of the Johnnic shareholder in question for either:
- the cash consideration; or alternatively
- the share consideration,
subject to the adjustment for an amount equal to any distributions, dividends or
other payments of any nature whatsoever declared or made by Johnnic to Johnnic
shareholders in respect of any offer share on or after 1 July 2005 but prior to
the date upon which the offer shares are registered in the name of Mercanto
(`interim Johnnic distributions`).
Increased offer consideration and revised terms of the offer
Subject to the fulfilment of the conditions precedent, the directors of HCI have
resolved to increase the offer consideration to 1 070 cents per offer share,
which has the following effect on the elections which Johnnic shareholders are
required to make in respect of the offer consideration:
Cash consideration
Johnnic shareholders electing to receive their offer consideration in cash will
therefore receive cash of 1 070 cents per offer share, subject to adjustment for
any interim Johnnic distributions.
Share consideration
Johnnic shareholders electing to receive their offer consideration in terms of
the share consideration election will be entitled to receive one HCI share
issued for every 2,57 offer shares tendered, subject to adjustment for any
interim Johnnic distributions. A maximum of 15 million HCI shares will be
issued to Johnnic shareholders in terms of the share consideration election at a
price of 2 750 cents per HCI share.
If more than 38.6 million offer shares are tendered (which will equate to 15
million HCI shares x 2,57), each Johnnic shareholder electing to receive the
offer consideration in terms of the share consideration election will receive a
pro rata number of HCI shares and the balance of the offer consideration shall
be settled in cash, subject to adjustment for any interim Johnnic distributions.
Any fractional amount will be settled in cash.
The SRP has been furnished with written confirmation that HCI has sufficient
cash resources and / or facilities with which to meet its obligations in terms
of the increased offer consideration.
Pro forma financial effects of the offer
The table below sets out the pro forma financial effects of the offer on a
Johnnic shareholder accepting the offer:
BEFORE THE AFTER THE % CHANGE
OFFER CENTS OFFER (CENTS)
(1) (2)
Cash consideration 930 1 070 15.1
Share consideration 930 1 070 15.1
Notes and assumptions
The closing market price per Johnnic share on 30 June 2005, being the last
trading day prior to the publication of the announcement by HCI giving details
of the mandatory offer that had been triggered as a result of the acquisition of
16 499 321 Johnnic ordinary shares from Gold Reef Casino Resorts Limited.
No account has been taken of the adjustment for interim Johnnic distributions
(if any), taxes, commissions or other charges in calculating the above financial
effects.
Remaining terms and conditions
Save to the extent set out in this announcement, the terms and conditions of the
offer remain as set out in the offer circular. Shareholders are reminded that
the offer is subject to the fulfilment of the conditions that the Competition
Authorities and the Gaming Authorities approve the offer, to the extent
required.
Irrevocable commitments
Irrevocable commitments to accept the offer have been received from Johnnic
shareholders holding 5 161 660 ordinary shares in the issued share capital of
Johnnic, in terms of which they have undertaken, irrevocably, to accept the
offer and to elect the share consideration election in respect of their entire
shareholding based on the increased offer consideration set forth herein. The
irrevocable commitments will be available for inspection at the registered
office of HCI from Friday, 5 August 2005 up to and including the closing date of
the offer.
Important information for foreign shareholders
As indicated in the offer circular, the offer does not constitute an offer in or
an acceptance from the United States, the United Kingdom, Canada, Australia,
Japan or any other jurisdiction where the dissemination of information or the
making of the offer may be illegal or fails to conform to the laws of such
jurisdiction (`Affected Jurisdiction`). Persons in Affected Jurisdictions may
not accept the offer. This is not an offer for holders of American Depository
Receipts relating to Johnnic shares.
5 August 2005
Durban
Investment Bank and Advisor
Investec Corporate Finance
Lead sponsor
Ernst & Young
Joint sponsor
Investec Bank Limited
Legal Advisor
Sonnenberg Hoffman Galombik
Corporate Advisor
HJS
Date: 05/08/2005 11:11:08 AM
Produced by the JSE SENS Department
