| Tue 5 Sep 2006, 14:53 | | RAH - Exercise Of Pre-Emptive Rights By Afrisun To |
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RAH
RAH
RAH - Exercise Of Pre-Emptive Rights By Afrisun To Acquire An Additional
Interest In Sunwest
Real Africa Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/003919/06)
SHARE CODE: RAH ISIN: ZAE000008702
("RAH")
EXERCISE OF PRE-EMPTIVE RIGHTS BY AFRISUN TO ACQUIRE AN ADDITIONAL INTEREST IN
SUNWEST
REVISED OFFER - REMAINS UNFAIR AND UNREASONABLE
RAH shareholders are advised that RAH"s subsidiary, Afrisun Leisure Investments
(Proprietary) Limited ("Afrisun"), has notified its co-shareholders in SunWest
International (Proprietary) Limited ("SunWest") of its intention to exercise its
pre-emptive rights to acquire a further interest in SunWest as detailed below.
RAH shareholders are also referred to the announcement released by Sun
International Limited ("Sun International") on the Securities Exchange News
Service ("SENS") of the JSE Limited on Tuesday, 22 August 2006 detailing an
increased offer consideration and revised closing date of the offer to acquire
all of the issued ordinary shares in the capital of RAH that it does not already
own ("the Revised Offer").
EXERCISE OF PRE-EMPTIVE RIGHTS BY AFRISUN
It has recently come to the attention of Afrisun that Sun International South
Africa Limited ("SISA"), a wholly owned subsidiary of Sun International, intends
to dispose of 536 800 "O" ordinary shares ("O" shares) and 23 346 "N" ordinary
shares ("N" shares) in the issued share capital of SunWest to Grand Parade
Investments Limited ("GPI") for a consideration of R148.81 per share. Afrisun is
a shareholder in SunWest and as at 31 March 2006, the RAH Board ("the Board")
valued the investment in SunWest at R454.56 per share.
Afrisun has received external legal advice to the effect that the intention of
SISA to dispose of the shares in the issued share capital of SunWest has
triggered pre-emptive rights contained in the Shareholders" Agreement concluded
between Afrisun, SISA and GPI in relation to their shareholdings in SunWest and
in the Articles of Association of SunWest. In terms of these pre-emptive rights,
Afrisun is entitled to require SISA to unconditionally offer to dispose of a
minimum of 200 945 "O" shares and 8 739 "N" shares to Afrisun at a price of
R148.81 per share. Afrisun intends to enforce such pre-emptive rights and has
notified SISA accordingly.
Sun International also announced in its profit and dividend announcement for the
year ended 30 June 2006, which was released on SENS on Monday, 28 August 2006
(the "Sun International Results Announcement") that it intends to grant GPI an
option over a further 5% shareholding in SunWest at a strike price of R165.00
per share. Sun International also expressed its intention to sell a further
2.46% of the SunWest shares at fair value at a future date. Afrisun will at the
appropriate time procure external legal advice as to whether the above intended
disposals trigger pre-emptive rights, and at such time and depending on the
terms, determine if its pre-emptive rights will be exercised.
The enforcement of pre-emptive rights by Afrisun referred to above is distinct
from, and in addition to, the enforcement of pre-emptive rights by Afrisun which
forms the subject matter of the legal proceedings instituted by Afrisun against,
inter alia, SISA in the High Court of South Africa in May 2006. The details of
Afrisun"s claims in these legal proceedings are set out in the announcement
released by RAH on SENS on Wednesday, 17 May 2006.
REVISED OFFER
In terms of the Revised Offer, Sun International has increased the offer
consideration to R5.30 per RAH share from R5.13 per RAH share. Furthermore the
closing date of the offer has been extended to 12:00 on Friday, 15 September
2006.
Sun International"s results announcement
RAH shareholders" attention is drawn to the Sun International Results
Announcement in which Sun International reported revenue growth of 16% and an
increase in earnings before interest, tax, depreciation and amortisation
(EBITDA) of 21%, for the financial year ended 30 June 2006. In commenting on
their outlook, Sun International expects good growth in earnings for the year
ending 30 June 2007, which should result in a similar, if not more favourable,
increase in the earnings attributable to RAH.
Revised Offer still 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
R6.40 per share, before the payment by RAH of ordinary and special dividends of
77 cents per share. The ex-distribution minimum value reduces to R5.63 per
share. This value excludes any value in the SunWest shares which are the subject
matter of the current litigation against Sun International referred to above.
As reported in RAH"s preliminary annual results for the year ended 31 March
2006, released on SENS on Monday, 26 June 2006, RAH"s net asset value, based on
the Board"s valuation, was R6.76 per share. After the payment of the ordinary
and special dividends the Board"s valuation reduces to R5.99 per share.
Notwithstanding that Sun International has increased the offer consideration
payable to RAH shareholders to R5.30 per RAH share, the Board is of the view
that the increased offer consideration remains neither fair nor reasonable as it
is still below the minimum value. In the opinion of the Board, accepting the
Revised Offer denies RAH shareholders participation in the growth potential
inherent in RAH"s gaming portfolio.
DIRECTORS RESPONSIBILITY STATEMENT
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 Securities Regulation Code on Take-overs and
Mergers and the Rules of the Securities Regulation Panel issued in terms of the
Companies Act.
Johannesburg
5 September 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
Date: 05/09/2006 02:53:09 PM Produced by the JSE SENS Department
