| Mon 21 Aug 2006, 15:21 | | RAH - Update Announcement |
|
RAH
RAH
RAH - Update Announcement
Real Africa Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/003919/06)
SHARE CODE: RAH ISIN: ZAE000008702
("RAH")
UPDATE ANNOUNCEMENT
RAH is pleased to announce that the acquisition of an additional economic
interest in Emfuleni Resorts (Proprietary) Limited ("Emfuleni") has been
finalised and further progress has been made in implementing the disposal of its
indirect interest in Oceana Group Limited ("Oceana").
INCREASE IN ATTRIBUTABLE ECONOMIC INTEREST IN EMFULENI
The Eastern Cape Gambling and Betting Board has approved the acquisition by
Afrisun Leisure Investments (Proprietary) Limited ("Afrisun") (RAH"s subsidiary)
of a 34,9% interest in Zonwabise Resort Holdings Limited ("Zonwabise").
Zonwabise holds, as its principal assets, a 20.25% economic interest in
Emfuleni, which in turn owns the Boardwalk Casino and Entertainment World and a
50% interest in Emfuleni Casino Manco (Proprietary) Limited ("Emfuleni Manco").
The R46,2 million purchase price is being funded through the issue of redeemable
preference shares at a coupon rate equal to 68.5% of the prime overdraft lending
rate. Dividends of R3,3 million have already been received and thus the
investment has been acquired at a dividend yield of 7.25%.
The effect of this acquisition is to, inter alia, increase RAH"s attributable
economic interest in Emfuleni from 2,3% to 7,0% and in Emfuleni Manco from 10.9%
to 22.5%.
DISPOSAL OF RAH"S INDIRECT INTEREST IN OCEANA
As announced with the preliminary annual results for the year ended 31 March
2006, released on the Securities Exchange News Service ("SENS") of the JSE
Limited ("the JSE") on 26 June 2006, RAH has entered into agreements to dispose
of its indirect interest in Oceana to Tiger Brands Limited (the "disposal"). The
implementation of the disposal is progressing well with the conditions
precedent, including regulatory filings, being met as planned.
RAH shareholders are reminded that the Board of RAH ("the Board") has resolved
to distribute the disposal proceeds, being R338 million, equivalent to
approximately 94 cents per RAH share, to RAH shareholders. An appropriate
announcement in this regard will be made subsequent to receipt of the proceeds.
UNSOLICITED OFFER FROM SUN INTERNATIONAL
RAH shareholders are referred to the Sun International Limited ("Sun
International") announcement released on SENS on Tuesday, 8 August 2006, whereby
Sun International declared the offer to acquire all of the issued ordinary
shares in the capital of RAH that it does not already own ("the Offer")
unconditional. It was further announced that the Offer will close at 12:00 on
Friday, 1 September 2006.
Following the payment by RAH of an ordinary dividend of 10 cents per RAH share
and a special dividend of 67 cents per RAH share on Monday, 24 July 2006 ("the
distributions") the Offer consideration has been reduced from 590 to 513 cents
per RAH share.
EXPROPRIATION OF SHARES AND MAINTAINING RAH"S LISTING ON THE JSE
Sun International has advised that it intends to compulsorily acquire the shares
of non-accepting RAH shareholders by invoking the provisions of section 440K of
the Companies Act ("Section 440K"). In order for the provisions of Section 440K
to be invoked, acceptances from holders of not less than nine-tenths of the
securities involved in the Offer would have to be obtained within four months of
making an offer, failing which non-accepting RAH shareholders will retain their
shares. In the event of expropriation, the same price as was paid to accepting
shareholders, will apply.
If expropriation does not take place, the listing of RAH"s shares on the JSE can
only be terminated if, inter alia, approved by shareholders in general meeting
and without the controlling shareholder and its associates being allowed to vote
their shares.
THE OFFER UNDERVALUES RAH
RAH shareholders are referred to the Board"s recommendation, contained in the
RAH response circular dated and posted to RAH shareholders on Monday, 19 June
2006, not to accept the Offer as it undervalues RAH. This recommendation was
based, inter alia, on the opinions of RAH"s independent sub-committee and RAH"s
independent external adviser.
The independent external adviser concluded that the minimum value for RAH is 640
cents per share, before the distributions. This value excludes any value in the
SunWest International (Proprietary) Limited shares which are the subject matter
of current litigation against Sun International.
As reported in RAH"s preliminary annual results for the year ended 31 March
2006, released on SENS on 26 June 2006, the Board valued RAH"s net asset value,
as at 31 March 2006, at 676 cents per share.
RAH shareholders" attention is drawn to the Sun International trading statement
released on SENS on 14 July 2007 informing its shareholders that as a
consequence of strong trading and continued improved margins as well as foreign
exchange profits, adjusted headline earnings per share and earnings per share
for the year ended 30 June 2006 are expected to be between 25% and 35% above the
previous year. This pleasing performance bodes well for RAH shareholders.
DENIED PARTICIPATION IN SELECT, EXCELLENT GROWTH GAMING ASSETS
By accepting the Offer, RAH shareholders will be denied participation in select,
excellent growth gaming assets held by Afrisun in GrandWest casino, Carnival
City casino, Sibaya casino and the BoardWalk casino, together with the
investments held in the National Management Company and the Gauteng Resort Manco
(which companies derive management fees from the four operating casino
companies). These assets are arguably the best portfolio of casino investments
available in South Africa, and potentially the pick of Sun International"s
portfolio of casino investments.
Furthermore as an investment holding company the Board has resolved that,
subject to capital requirements, RAH will, on an ongoing basis, declare and
distribute semi-annual dividends equal to net cash revenues after allowance for
operational cash requirements.
The directors of RAH, collectively and individually, accept responsibility for
the accuracy of the information given in relation to RAH and accordingly certify
that, to the best of their knowledge and belief such information is true and
correct and that, no facts have been omitted which would make any statement in
this announcement false or misleading, and that all reasonable inquiries to
ascertain such facts have been made and that this announcement contains all
information required by law and the SRP Code.
Johannesburg
21 August 2006
Financial adviser
NM Rothschild & Sons (South Africa) (Pty) Ltd
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Legal adviser
Deneys Reitz
Independent external adviser to the board
Standard Bank
Enquiries:
RAH 011 463 0010
Danie Vlok, Director
College Hill 011 447 3030
Nicholas Williams 083 607 0761
Johannes van Niekerk 082 921 9110
Notes to editors:
RAH is an investment holding company and holds shareholdings in, inter alia, the
following companies:
- 66,3% of the ordinary shares of Afrisun (RAH holds an effective 89%
economic interest in Afrisun as RAH holds additional shares providing an
additional economic interest in Afrisun Leisure to RAH);
- 45% of Life Esidimeni (Proprietary) Limited; and
- 100% of Persetel Q Data Africa Holdings Limited, which holds treasury
shares and cash.
Afrisun holds minority interests in a number of Sun International"s subsidiaries
namely, Afrisun Gauteng (Proprietary) Limited (Carnival City casino), Afrisun
KZN (Proprietary) Limited (Sibaya casino), Emfuleni Resorts (Proprietary)
Limited (Boardwalk casino) and SunWest International (Proprietary) Limited
(GrandWest casino and Table Bay Hotel) as well as shareholdings in National
Casino Resort Manco (Proprietary) Limited and Gauteng Casino Resort Manco
(Proprietary) Limited.
Life Esidimeni (Proprietary) Limited is a public/private partnership that
provides district hospital and health services on contract to provincial
government in South Africa. It has approximately 5,500 beds in 15 facilities and
provides medical services to approximately 300 outpatients at community
hospitals and 7,000 inpatients daily.
Date: 21/08/2006 03:21:06 PM Produced by the JSE SENS Department
