| Thu 9 Feb 2006, 15:15 | | Prism/ Net1 - Firm Intention and Withdrawal of Cau |
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PIM
PIM
Prism/ Net1 - Firm Intention and Withdrawal of Cautionary Announcement
Net1 Applied Technologies South Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2002/031446/06)
(A subsidiary of Net1 UEPS Technologies, Inc.)
("Net1")
Prism Holdings Limited
(Incorporated in the Republic of South Africa)(Registration number:
1998/018949/06)(Share code: PIM)(ISIN: ZAE000022257)("Prism")
Not for release, publication or distribution in or into Australia, Canada, Japan
or the United States of America
ANNOUNCEMENT IN RESPECT OF THE FIRM INTENTION BY NET1 TO MAKE A CASH OFFER TO
ACQUIRE PRISM AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcement published on 24 January 2006,
shareholders of Prism are advised that Net1 has submitted to the board of
directors of Prism ("the Prism Board") a notice of its firm intention to
make an offer to acquire all the issued ordinary share capital of Prism
("the Offer"). The consideration payable in terms of the Offer will be
R1.02 in cash for each Prism share ("Cash Consideration").
The posting of the Offer circular will be subject to: 1) the conclusion of
satisfactory arrangements relating to the treatment of Prism"s existing
incentive scheme and to the incorporation of Prism employees into the Net1
Group"s employee incentive program, as appropriate; and 2) the conclusion
between Net1 and Prism of an implementation agreement incorporating the
terms and conditions set out in this announcement and such other terms as
are reasonably acceptable to the parties.
These conditions are to be fulfilled within 20 days of the date of this
announcement.
2. BACKGROUND TO THE OFFEROR
Net1 is a subsidiary of Net1 UEPS Technologies Inc. ("Net1 US"), a U.S.-
domiciled Nasdaq listed company with its operations and management
headquartered in South Africa. The Net1 Group provides its unique universal
electronic payment system ("UEPS") as an alternative system for the
unbanked and under-banked populations of developing economies (c. 4 billion
people).
3. TERMS OF THE OFFER
3.1 The Offer Consideration
The Offer will be for a Cash Consideration of ZAR1.02 per Prism share. This
represents a premium of 28 per cent to the closing price of Prism shares on
8 February, being the date of the submission of the Offer letter by Net1 to
Prism.
3.2 The Offer Mechanism
The Offer will be implemented by way of a scheme of arrangement in terms of
section 311 of the Companies Act, No. 61 of 1973, as amended ("the Act") to
be proposed by Net1 between Prism and the Prism ordinary shareholders
("Scheme Members") in terms of which Net1 or another company in the Net1
Group will acquire 100% of the Prism ordinary shares in exchange for the
Cash Consideration (the "Scheme").
3.3 Conditions Precedent
The Scheme is subject to, inter alia, the fulfilment or waiver (where
possible) of the following conditions precedent:
3.3.1 satisfactory completion of a preliminary due diligence investigation
(which will not include any competitor sensitive information of Prism)
by Net1 within 4 (four) weeks of the date of this announcement on the
basis that no material adverse information is disclosed to Net1 during
such preliminary due diligence investigation which was not known or
available to it prior thereto;
3.3.2 the approval of the proposed acquisition ("the Transaction") by the
Competition Authorities;
3.3.3 the completion of a final due diligence investigation by Net1 within 1
(one) week after the approval of the Transaction by the Competition
Authorities has been obtained, such final due diligence to relate to
the competitor sensitive information of Prism on the basis that Net1
will be entitled not to proceed with the Transaction if any material
adverse information is disclosed to Net1 pursuant thereto which was
not known or available to Net1 prior thereto;
3.3.4 Net1 not becoming aware prior to the approval of the Scheme by the
Scheme Members of any adverse effect, fact or circumstance impacting
on the Prism business which is material with regard to the present
business, or to the continued existence, assets, revenues or financial
position of Prism;
3.3.5 the Scheme being approved by a majority representing not less than 75%
of the votes exercisable by the Scheme Members present and voting
either in person or by proxy, at the Scheme meeting;
3.3.6 the Scheme being sanctioned by the High Court of South Africa
(Witwatersrand Local Division);
3.3.7 a certified copy of the Order of the Court sanctioning the Scheme
being registered by the Registrar of Companies in terms of the
Companies Act; and
3.3.8 the unconditional approval of the JSE Limited, Securities Regulation
Panel ("SRP") and any other regulatory authorities to the extent
required.
4. DELISTING OF PRISM
Subsequent to the Scheme becoming operative, Prism will be delisted from
the JSE Limited.
5. CONFIRMATION OF FINANCIAL RESOURCES
Morgan Stanley South Africa (Proprietary) Limited has confirmed to the SRP
that sufficient resources are available and will be available to Net1 to
satisfy full acceptance of the Offer.
6. OPINION AND RECOMMENDATIONS
The Prism Board has formed a separate independent sub-committee to consider
the terms of the Offer, comprising Messrs R.A.R. Bicker-Caarten, R.D.S.
Came, O.R.J. da Silva and I.N. Matthews. Mr Matthews will chair the
independent board sub-committee. The sub-committee will appoint independent
advisers to assist it in its tasks and to provide it with external advice
as may be required in terms of the SRP Code.
The opinions and recommendations of the independent advisers, independent
sub-committee and the board will be set out in the circular that will be
sent to Scheme Members in terms of paragraph 9 below.
7. IRREVOCABLE UNDERTAKINGS
7.1 Shareholders, including certain Prism directors and employees, holding
approximately 43% of Prism"s shares, have entered into irrevocable
undertakings to vote in favour of the Scheme; and
7.2 other than the irrevocable undertakings referred to in paragraph 7.1 above,
no other arrangements, undertakings or agreements (including any
compensation arrangements), which have any connection with, or dependence
on the Offer, exist between Net1, or any concert party, and any director of
Prism or any person who was a director of Prism during the 12 months prior
to the Offer, or any holder of Prism shares or any person who was a holder
of Prism shares within a period of 12 months prior to the Offer.
8. BREAK FEE
If the Transaction fails due to a competing offer or bid being made and
accepted by Prism shareholders, Prism will be required to pay Net1 a break
fee equal to R6 million.
9. SALIENT DATES AND DOCUMENTATION
A circular containing full details of the Offer, including the Scheme
documentation, will be posted to Prism shareholders within 28 days of the
fulfilment of the conditions referred to in paragraph 1 above.
Further announcements, including the salient dates of the Offer, will be
published on the Securities Exchange News Service and in the press in due
course.
10. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement published by Prism on 24 January 2006 is
withdrawn.
Johannesburg
9 February 2006
Financial adviser to Net1
Morgan Stanley South Africa (Proprietary) Limited
Legal counsel to Net1 in South Africa
Cliffe Dekker Inc
Legal counsel to Net1 US in the USA
DLA Piper Rudnick Gray Cary US LLP
Corporate adviser and legal adviser to Prism
Java Capital (Proprietary) Limited
Sponsor to Prism
Standard Bank
For enquiries, contact:
Net1 US and Net1
Dr. Serge Belamant or Herman Kotze
Phone: +27 (0)11 343 2000
Prism
Alvin Els or Jan Hnizdo
Phone: +27 (0)11 548 1000
Morgan Stanley South Africa (Proprietary) Limited
Beth Mandel
Phone: +27 (0)11 507 0810
+27 (0)83 289 4731
Java Capital (Proprietary) Limited
Kevin Joselowitz
Phone: +27 (0)11 283 0076
+27 (0)11 283 0065
Morgan Stanley South Africa (Proprietary) Limited is acting exclusively for Net1
and Net1 US and no one else in connection with the Offer and will not be
responsible to anyone other than Net1 and Net1 US for providing the protections
afforded to its clients or for providing advice in relation to the Offer or any
other matter referred to herein.
Date: 09/02/2006 03:15:20 PM Produced by the JSE SENS Department
