| Mon 27 Nov 2006, 12:02 | | Naspers Limited - Results of the Phuthuma Nathi In |
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NPN
NPN
Naspers Limited - Results of the Phuthuma Nathi Investments Limited
Naspers Limited
(Incorporated in the Republic of South Africa)
(Registration number 1925/001431/06)
Share code: NPN ISIN: ZAE000015889
("Naspers" or "the company")
RESULTS OF THE PHUTHUMA NATHI INVESTMENTS LIMITED ("PHUTHUMA NATHI") PUBLIC
OFFER AND THE INTRODUCTION OF FURTHER BLACK ECONOMIC EMPOWERMENT SHAREHOLDERS
INTO MULTICHOICE AFRICA (PROPRIETARY) LIMITED ("MCSA")
1. INTRODUCTION
Naspers, in furtherance of its empowerment objectives, recently implemented a
Broad-Based Black Economic Empowerment ("BEE") ownership initiative in relation
to MCSA. This initiative, the Phuthuma Nathi BEE transaction, will result in the
acquisition by qualifying Black Persons and Black Groups ("General Black Public"
or "Black Participants") of ordinary shares in the issued share capital of
Phuthuma Nathi. The latter will hold ordinary shares in the issued share capital
of MultiChoice South Africa Holdings (Proprietary) Limited ("MCSA Holdings"),
the holding company of MCSA.
Shareholders are referred to the Naspers announcement published on 26 September
2006 in this regard.
2. RESULTS OF THE PHUTHUMA NATHI PUBLIC OFFER AND ALLOCATION OF SHARES
Approximately 120 000 applications were received for the 45 000 000 Phuthuma
Nathi ordinary shares offered to the public ("the public offer"), pursuant to
the public offer that closed on 3 November 2006 ("the closing date"). The
details are as follows:
Number of Phuthuma Nathi ordinary shares applied for: 130 804 555
Rand amount of R1 308 045 550.
Based on these figures, the offer was almost three times subscribed. The
processing of applications is currently under way and should be finalized within
10 days. In keeping with the broad-based objective of the offer, and subject to
all applications having been verified, it has been resolved that all Black
Person and Black Group applicants that applied for up to R50 000 in value, will
be allocated the full number of Phuthuma Nathi ordinary shares they applied for
(5 000). Applicants who applied for more than 5 000 Phuthuma Nathi ordinary
shares, will receive 5 000 Phuthuma Nathi ordinary shares.
This allocation will result in approximately 98% of all applicants receiving the
full number of Phuthuma Nathi ordinary shares they applied for.
The process to refund excess application monies will begin in mid-December 2006.
3. RATIONALE FOR A FURTHER MCSA EMPOWERMENT TRANSACTION
Naspers recently announced that it had concluded an agreement with Johnnic
Communications Limited ("Johncom"), subject to certain conditions precedent. In
terms of this agreement, Naspers would exchange N ordinary shares and cash for
Johncom"s direct and indirect interests in Electronic Media Network
Limited/SuperSport International Holdings Limited ("M-Net/SuperSport") ("the M-
Net/SuperSport transaction").
Once the M-Net/SuperSport transaction is completed, Naspers intends to transfer
its total direct and indirect stake in M-Net/SuperSport into MCSA, which may
result in the effective BEE interest in MCSA reducing by some 2,5%.
To compensate for this, and to boost the BEE ownership of MCSA further, Naspers
has agreed to make up to a further 7,5% indirect interest in MCSA available for
empowerment. This is expected to be implemented by means of a public offer by a
new company ("NewCo") in the first quarter of 2007 (the "New Public Offer").
4. THE FURTHER MCSA EMPOWERMENT TRANSACTION
The ordinary shares in NewCo will only be offered to those eligible Black
Persons and Black groups that applied for shares in the Phuthuma Nathi and
Welkom Yizani (the Media24 Limited empowerment transaction) public offers and
who were not allocated all the shares in those respective public offers that
they applied for ("eligible NewCo applicants").
The terms of the New Public Offer by NewCo are expected to be substantially the
same as those of the Phuthuma Nathi public offer. The maximum quantum that may
be applied for by eligible NewCo applicants will be the figure by which the
amounts applied for in the Phuthuma Nathi and Welkom Yizani public offers were
not allocated, subject to a limit of R22,5 million per applicant.
5. MECHANICS OF THE FURTHER MCSA EMPOWERMENT TRANSACTION
MCSA Holdings owns 100% of MCSA. Subsequent to the finalisation of the Phuthuma
Nathi public offer, and prior to the proposed New Public Offer, 85% of MCSA
Holdings will be held by MIH Holdings Limited ("MIH Holdings").
MIH Holdings is expected to sell up to 7,5% of MCSA Holdings to NewCo, having
regard to the fact that MCSA Holdings" only asset is its shareholding in MCSA.
NewCo will finance each MCSA Holdings ordinary share purchased as follows:
the issue to eligible NewCo participants of one NewCo ordinary share at an
issue value of 20% of the price payable for one MCSA Holdings ordinary share;
and
the issue to MIH Holdings of four NewCo preference shares at an issue price of
80% of the price payable for one MCSA Holdings ordinary share. The NewCo
preference shares will be redeemable over 10 years or such extended period as
MIH Holdings may allow. Dividends are calculated at the rate of 75% of the prime
interest rate.
6. INFORMATION RELATING TO MCSA
MCSA is South Africa"s premium pay-television and internet business.
MCSA also has a 29,98% interest in M-Net/SuperSport and 100% in M-Web Holdings
(Proprietary) Limited ("MWEB"). Subject to the M-Net/SuperSport transaction
closing, the balance of the equity of M-Net/SuperSport will be injected into
MCSA.
MCSA operations
MCSA provides premium television entertainment through its DStv bouquets to more
than 1 million subscribers in South Africa. Operations include subscriber
management services and digital satellite television platforms broadcasting over
70 video and over 60 audio channels. Included are seven data channels with
interactive television offerings.
M-Net/SuperSport
M-Net/SuperSport provide premium thematic channels and exclusive content to the
subscriber base of MCSA. M-Net provides premium entertainment channels and
SuperSport provides sports channels carried by MCSA on its pay-television
platforms.
MWEB
MWEB provides the infrastructure for MCSA"s interactive platform. MWEB has
approximately 340 000 subscribers.
7. FINANCIAL EFFECTS
Profit on disposal to Naspers
The book profit arising in respect of the New Public Offer to Naspers
shareholders is expected to amount to approximately R1,1 billion. The adjustment
will be made directly to equity in accordance with Naspers"s accounting
policies.
Pro forma financial effects
The table below sets out the unaudited pro forma financial effects of the New
Public Offer, which are based on the published financial results of Naspers for
the year ended 31 March 2006. The unaudited pro forma financial effects, for
which the Naspers board is responsible, are presented for illustrative purposes
only. They may not give a fair reflection of the financial position and results
of operations post the implementation of the New Public Offer.
Per Naspers share Before the New After the New %
Public Offer(1) Public Offer(2) Change
EPS
EPS (cents) 1 154 1 155 -
HEPS (cents) 790 791 -
Fully diluted EPS
EPS (cents) 1 091 1 092 -
HEPS (cents) 747 748 -
NAV (cents) (3) 4 227 4 433 5
NTAV (cents) (3) 2 697 3 068 14
Number of shares in issue ("000) 311 441 311 441
Weighted average number of
shares in issue ("000) 304 606 304 606
Fully diluted weighted average
number of shares in issue ("000) 321 129 321 129
Notes:
1. The information "Before the New Public Offer" is based on published pro forma
figures for the year ended 31 March 2006 as outlined in the announcement
published on 14 November 2006.
2. The information "After the New Public Offer" is based on the following
assumptions:
(i) the New Public Offer was implemented on 1 April 2005;
(ii) the New Public Offer preference dividend rate is a variable rate,
based on 75% of the prime interest rate. The rate, assuming the current prime
rate of 12%, is 9%; and
(iii) the cash of R225 million received by Naspers from the New Public Offer was
invested for the period at an interest rate of 7% after tax.
3. The NAV and NTAV per ordinary share "After the New Public Offer" is based on
the assumption that the transaction was implemented on 31 March 2006.
The NAV and NTAV were adjusted to reflect the purchase consideration received,
and the accounting profit arising on the M-Net/SuperSport transaction. In
addition, the NAV and NTAV attributable to the 22 500 000 MCSA Holdings shares
sold to NewCo were excluded.
4. MCSA holds an effective 29,98% interest in M-Net/SuperSport and Naspers holds
an effective 68,7% interest in M-Net/SuperSport after the closing of the M-
Net/SuperSport transaction.
5. The effect on core HEPS is as follows:
Before the New Public Offer(1): 716 cents
After the New Public Offer(2): 717 cents
% change: nil.
8. CONDITIONS PRECEDENT
The New Public Offer is subject to NewCo undertaking the New Public Offer as
outlined above. The number of MCSA Holdings ordinary shares to be acquired by
NewCo will depend on the amount raised by NewCo in terms of the New Public
Offer.
9. OPINIONS AND RECOMMENDATIONS
The board of Naspers has considered the New Public Offer and is of the opinion
that it is in the best interests of Naspers"s various stakeholders.
10. FURTHER DOCUMENTATION
A further announcement will be made once the New Public Offer has been
completed.
Cape Town
27 November 2006
Investment bank and sponsors to Naspers
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Joint attorneys and tax advisers to Naspers
Webber Wentzel Bowens
Joint attorneys to Naspers
Jan S. de Villiers
Attorneys
Date: 27/11/2006 12:02:08 PM Produced by the JSE SENS Department
