HCI - Response to Johnnic Holdings Limited (`Johnnic`) circular
to Johnnic shareholders
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
(Share code: HCI ISIN: ZAE000003257)
(`HCI`)
Response to Johnnic Holdings Limited (`Johnnic`) circular to
Johnnic shareholders
Whilst HCI has not yet had the opportunity of considering in detail the circular
to Johnnic shareholders that Johnnic has circulated on the 16 August 2005 in
response to the mandatory offer that HCI has made to Johnnic shareholders, HCI
has the following comments on the response:
1. Firstly, HCI remains of the view that its offer is a fair and reasonable
one offering what HCI considers an attractive proposition to Johnnic
shareholders. In this connection HCI has recently purchased approximately
40% of all the shares in Johnnic on the open market and the highest price
that it paid was 975 cent per share. HCI`s revised offer of 1070 cents per
share is considerably higher and includes an attractive share alternative
where HCI shares which are trading on the JSE Limited (`JSE`) at 3100 cents
may be taken at 2750 cents. This equates to a consideration well within the
upper end of the range determined to be fair and reasonable by Johnnic`s
independent advisor. HCI has also received irrevocable undertakings from
an additional 3% of Johnnic shareholders to accept the revised offer.
2. Secondly, whilst HCI appreciates that the Johnnic board of directors
(`Johnnic board`) must furnish the Johnnic shareholders with its view and
attitude to the offer, HCI is disappointed with the numerous negative
statements that the Johnnic board has made in its response concerning HCI,
its largest single shareholder. These views have been expressed without
any consultation with HCI. Although Johnnic`s independent advisor has
stipulated that it is not in a position to advise on HCI`s share offer, the
Johnnic board has had no hesitation in expressing negative views on HCI and
its shares.
3. Thirdly, HCI confirms its commitment to proceeding with its offer and
bringing it to closure as soon as possible. HCI is seeking the requisite
regulatory approvals for implementation of its offer and intends to close
the offer once these are obtained. The intervention of Johnnic in these
processes will serve only to prejudice Johnnic shareholders.
16 August 2005
Durban
Lead sponsor Joint sponsor Corporate Advisor
Ernst & young Investec Bank HJS
Limited
Date: 16/08/2005 05:08:55 PM
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