| Wed 13 Dec 2006, 10:50 | | SHF - Steinhoff - Acquisition of minority sharehol |
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SHF
SHF
SHF - Steinhoff - Acquisition of minority shareholdings in Homestyle
The following announcement was published this morning in London in
respect of Homestyle Group Plc, a 61% subsidiary of Steinhoff
International Holdings Limited
"NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED
STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER
JURISDICTION WHERE IT IS UNLAWFUL TO DO SO"
13 December 2006
STEINHOFF INTERNATIONAL HOLDINGS LIMITED
(Registration number 1998/003951/06)
(Incorporated in the Republic of South Africa)
(JSE Code: SHF; ISIN No ZAE000016176)
(Steinhoff)
Recommended proposals by Steinhoff International Holdings Limited
("Steinhoff International") and Steinhoff Europe AG ("Steinhoff
Europe") to acquire the minority shareholdings in Homestyle Group
PLC ("Homestyle") by way of a scheme of arrangement under section
425 of the Companies Act 1985
On 17 November 2006, Homestyle announced that Steinhoff
International and Steinhoff Europe had approached the Homestyle
Board with a proposal to acquire all the Homestyle Shares not
already owned by Steinhoff Europe. The boards of Steinhoff
International and Steinhoff Europe and the Independent Directors of
Homestyle are now pleased to announce that they have agreed the
terms of recommended proposals to be made by Steinhoff International
and Steinhoff Europe for the acquisition by Steinhoff Europe of all
of the outstanding Homestyle Shares (that is, all the issued and to
be issued Homestyle Shares other than those owned by Steinhoff
Europe). The outstanding Homestyle Shares represent approximately
39 per cent. of the Homestyle Shares in issue. The Proposals are to
be effected by way of a scheme of arrangement under section 425 of
the Companies Act.
Highlights
* Under the Proposals, which are being recommended by the
Independent Directors of Homestyle, Scheme Shareholders can
elect to receive either:
(i) the Share Election of not less than 0.736 New Steinhoff Shares
and not more than one New Steinhoff Share for each Scheme Share
held (as determined in accordance with the Ratio, being a
formula based on the GBP/R exchange rate which will be
calculated two business days prior to the expected Effective
Date of the Scheme); or
(ii) the Cash Election of 100p in cash for each Scheme Share held.
* On the basis of the closing price of a Steinhoff Share of
R23.51 as at 12 December 2006 (the last dealing day prior to
the date of this Announcement) and the GBP/R exchange rate as
at that date of approximately GBP1:R13.77, the Share Election
values each Scheme Share at approximately 126 pence and the
total issued share capital of Homestyle at approximately
GBP326.4 million (such valuation is subject to change depending
on the Rand share price of a Steinhoff Share and the GBP/R
exchange rate at the time that the Ratio is calculated).
* On the above basis, the Share Election represents a premium of
approximately 23.5 per cent. over the Closing Price of 102p per
Homestyle Share on 16 November 2006, being the last dealing day
prior to the announcement by Homestyle that it had received an
approach from Steinhoff International and Steinhoff Europe
which may or may not lead to an offer or other proposal being
made for the entire issued share capital of Homestyle which
Steinhoff Europe does not already own.
* The Cash Election, which is being made available by Steinhoff
Europe, values the existing issued share capital of Homestyle
at approximately GBP259.1 million and represents a discount of
approximately 2 per cent. to the Closing Price of 102p per
Homestyle Share on 16 November 2006, being the last dealing day
prior to the announcement by Homestyle that it had received an
approach from Steinhoff International and Steinhoff Europe
which may or may not lead to an offer or other proposal being
made for the entire issued share capital of Homestyle which
Steinhoff Europe does not already own.
* It is expected that the Scheme Document will be despatched to
Homestyle Shareholders on or around 22 December 2006.
* The Scheme will be subject, amongst other things, to the
approval of Scheme Shareholders at the Court Meeting, the
passing of the Special Resolution at the Extraordinary General
Meeting and the approval of the Court.
Irrevocable undertakings and letters of intention
* Binding irrevocable undertakings to vote in favour of the
Scheme at the Court Meeting and in favour of the Special
Resolution at the EGM have been received by Steinhoff
International and Steinhoff Europe in respect of 25,845,026
Homestyle Shares, representing in aggregate approximately 10.0
per cent. of the existing issued share capital of Homestyle and
representing in aggregate approximately 25.6 per cent. of the
Scheme Shares currently in issue and entitled to vote at the
Court Meeting and the EGM. The irrevocable undertakings also
provide that the relevant Homestyle Shares shall be elected for
the Share Election.
* A non-binding letter of intention to vote in favour of the
Scheme at the Court Meeting and in favour of the Special
Resolution at the EGM has been received by Steinhoff
International and Steinhoff Europe from one Homestyle
Shareholder in respect of such Homestyle Shares as may be held
by such Homestyle Shareholder at the record date of the
relevant Meetings. As at 12 December 2006 (the last dealing
day prior the date of this Announcement), such Homestyle
Shareholder owned, or could procure the vote in respect of,
13,094,921 Homestyle Shares, representing approximately 5.1 per
cent. of the existing issued share capital of Homestyle and
representing approximately 12.9 per cent. of the Scheme Shares
currently in issue and entitled to vote at the Court Meeting
and the EGM. The non-binding letter of intention also provides
that the relevant Homestyle Shares shall be elected for the
Share Election.
Recommendation
* The Independent Directors, who have been so advised by
Hawkpoint, consider the terms of the Proposals to be fair and
reasonable. Accordingly, the Independent Directors unanimously
recommend that Scheme Shareholders vote in favour of the Scheme
at the Court Meeting and in favour of the Special Resolution at
the EGM.
Commenting on the Proposals, Donald Macpherson, Chairman of
Homestyle, said:
"Whilst progress is being made in improving many areas of our
business, restoring acceptable levels of performance across the
Homestyle Group is a long-term project and we believe
profitability will be restored more rapidly under the ownership
structure proposed by Steinhoff Europe and Steinhoff
International. Consequently, as a result of the reduced free
float and after careful consideration of the Proposals, the
Independent Directors believe the Proposals represent the best
course of action and fair value for minority shareholders."
Commenting on the Proposals, Markus Jooste, Chief Executive
Officer of Steinhoff International, said:
"Steinhoff International considers the Scheme to be in the best
interests of Homestyle to help facilitate its long-term
recovery. The Scheme enables Homestyle Shareholders to realise
their investment for either cash or new shares in Steinhoff
International. By electing for the Share Election, the
minority Homestyle Shareholders will have the opportunity to
continue to benefit indirectly from Homestyle`s recovery and
prospects as a wholly-owned subsidiary of Steinhoff Europe and
through the global vertically integrated business model and
strategy of Steinhoff International."
This summary should be read in conjunction with the full text
of the following Announcement and Appendices.
Appendix I contains the conditions to the implementation of the
Proposals and Appendix II contains definitions of certain terms
used in this summary and the following Announcement.
ENQUIRIES
Steinhoff International Tel:
Piet Ferreira +27 (0)11 445 3061
Stehan Grobler +27 (0)11 445 3050
Citigroup (Financial adviser to Steinhoff) Tel:
Ian Hart +44 (0)20 7986 4000
Mark Todd +44 (0)20 7986 4000
Homestyle Tel:
Donald Macpherson +44 (0)1925 647 200
Tim Kowalski +44 (0)1925 647 200
Hawkpoint (Financial adviser to Homestyle) Tel:
Christopher Darlington +44 (0)20 7665 4563
Hudson Sandler Limited (PR adviser to Tel:
Homestyle)
Andrew Hayes +44 (0)20 7796 4133
Jessica Rouleau +44 (0)20 7796 4133
Hawkpoint, which is authorised and regulated by the Financial
Services Authority, is acting for Homestyle Group PLC and no
one else in connection with the Proposals and will not be
responsible to anyone other than Homestyle Group PLC for
providing the protections afforded to clients of Hawkpoint or
for providing advice in relation to the Proposals, the contents
of this Announcement or any transaction or arrangement referred
to in this Announcement.
Citigroup, which is authorised and regulated by the Financial
Services Authority, is acting for Steinhoff International
Holdings Limited and Steinhoff Europe AG and no one else in
connection with the Proposals and will not be responsible to
anyone other than Steinhoff International Holdings Limited and
Steinhoff Europe AG for providing the protections afforded to
clients of Citigroup or for providing advice in relation to the
Proposals, the contents of this Announcement or any transaction
or arrangement referred to in this Announcement.
This communication does not constitute an offer to sell or
invitation to purchase or subscribe for any securities or the
solicitation of an offer to buy securities, or the solicitation
of any vote or approval, in any jurisdiction pursuant to the
Proposals or otherwise. Any response in relation to the
Proposals should only be made on the basis of the information
contained in the Scheme Document.
Steinhoff International Holdings Limited and Steinhoff Europe
AG each reserve the right to elect to implement the Proposals
by making a takeover offer under the City Code for the entire
issued and to be issued share capital of Homestyle Group PLC
not already owned by Steinhoff Europe.
The release, publication or distribution of this Announcement
in jurisdictions other than the United Kingdom may be
restricted by law and therefore persons in such jurisdictions
into which this Announcement is released, published or
distributed should inform themselves about, and observe, such
restrictions. Any failure to comply with the restrictions may
constitute a violation of the securities laws of any such
jurisdiction.
The availability of the Share Election to persons not resident
in the United Kingdom may be affected by the laws of the
relevant jurisdictions. Persons who are subject to the laws of
any jurisdiction other than the United Kingdom should inform
themselves about, and observe, any applicable requirements.
The statements contained in this Announcement are made as at
the date of this Announcement, unless some other time is
specified in relation to them and the release of this
Announcement shall not give rise to any implication that there
has been no change in the facts set out in this Announcement
since that date. Nothing contained in this Announcement shall
be deemed to be a forecast, projection or estimate of the
future financial performance of Homestyle Group PLC, Steinhoff
International Holdings Limited or Steinhoff Europe AG, except
where otherwise stated.
Certain statements which appear in a number of places
throughout this Announcement may constitute "forward-looking
statements" which are statements concerning matters that are
not historical, including anticipated financial and operational
performance, business prospects and similar matters. A variety
of factors could cause the actual results and expectations of
Homestyle Group PLC, Steinhoff International Holdings Limited
or Steinhoff Europe AG to differ materially from the
anticipated results or other expectations expressed in any such
forward-looking statements. The statements, if any, are
illustrative only and do not amount to any representation that
they will be achieved as they involve risks and uncertainties
and relate to events and depend upon circumstances that may or
may not occur in the future. None of Steinhoff International
Holdings Limited, Steinhoff Europe AG or Homestyle Group PLC
assumes any obligation or intends to update these forward-
looking statements, except as required pursuant to applicable
law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code, if any
person is, or becomes "interested" (directly or indirectly) in
1% or more of any class of "relevant securities" of Homestyle
Group PLC or Steinhoff International Holdings Limited, all
"dealings" in any "relevant securities" of that company
(including by means of an option in respect of, or a derivative
referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30pm (London time) on the London
business day following the date of the relevant transaction.
This requirement will continue until the Effective Date of the
Scheme or when the "offer period" for the purposes of the City
Code otherwise ends (or such later date(s) as the Panel may
specify). If two or more persons act together pursuant to an
agreement or understanding, whether formal or informal, to
acquire an "interest" in "relevant securities" of Homestyle
Group PLC or Steinhoff International Holdings Limited, they
will be deemed to be a single person for the purposes of Rule
8.3.
Under the provisions of Rule 8.1 of the City Code, all
"dealings" in "relevant securities" of Steinhoff International
Holdings Limited or Homestyle Group PLC by Steinhoff
International Holdings Limited or Homestyle Group PLC or by any
of their respective "associates", must be disclosed by no later
than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose
"relevant securities" "dealings" should be disclosed, and the
number of such securities in issue, can be found on the Panel`s
website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has
long economic exposure, whether conditional or absolute, to
changes in the price of securities. In particular, a person
will be treated as having an "interest" by virtue of the
ownership or control of securities, or by virtue of any option
in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which
can also be found on the Panel`s website. If you are in any
doubt as to whether or not you are required to disclose a
"dealing" under Rule 8, you should consult the Panel on
telephone number +44 (0)20 7638 0129; fax number +44 (0)20 7236
7013.
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN
PART IN OR INTO THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA
OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO
Recommended proposals by Steinhoff International Holdings
Limited ("Steinhoff International") and Steinhoff Europe AG
("Steinhoff Europe") to acquire the minority shareholdings in
Homestyle Group PLC ("Homestyle") by way of a scheme of
arrangement under section 425 of the Companies Act 1985
1. Introduction
On 17 November 2006, Homestyle announced that Steinhoff
International and Steinhoff Europe had approached the Homestyle
Board with a proposal to acquire all the Homestyle Shares not
already owned by Steinhoff Europe. The boards of Steinhoff
International and Steinhoff Europe and the Independent
Directors of Homestyle are now pleased to announce that they
have agreed the terms of recommended proposals to be made by
Steinhoff International and Steinhoff Europe for the
acquisition by Steinhoff Europe of all the outstanding
Homestyle Shares (that is, all the issued and to be issued
Homestyle Shares other than those owned by Steinhoff Europe).
The outstanding Homestyle Shares represent approximately 39 per
cent. of the Homestyle Shares in issue. The Proposals are to be
effected by way of a scheme of arrangement under section 425 of
the Companies Act.
In view of their connections with Steinhoff International as
executive directors, Ian Topping, Markus Jooste and Jan van der
Merwe have not participated in the consideration of the
Proposals on behalf of Homestyle Shareholders. In addition,
although David Sussman is the Senior Independent Director of
Homestyle, the Homestyle Board considers, and David Sussman has
concurred, that it is appropriate that he has not participated
in the consideration of the Proposals on behalf of Homestyle
Shareholders, bearing in mind his former directorship of a
Steinhoff Group company. Accordingly, an independent committee
of the Homestyle Board consisting of Donald Macpherson, Tim
Kowalski and Rian du Plessis has considered the Proposals on
behalf of Homestyle Shareholders.
The Independent Directors, who have been so advised by
Hawkpoint, consider the terms of the Proposals to be fair and
reasonable. In providing advice to the Independent Directors,
Hawkpoint has taken into account the commercial assessments of
the Independent Directors. Accordingly, the Independent
Directors unanimously recommend that Homestyle Shareholders
vote in favour of the Scheme at the Court Meeting and in favour
of the Special Resolution at the EGM.
2. Summary of the terms of the Proposals
The Proposals, which are subject to the conditions referred to
in paragraph 11(d) and set out in Appendix I to this
Announcement and to any further terms and conditions to be set
out in the Scheme Document, will be effected by way of a scheme
of arrangement under section 425 of the Companies Act. Under
the Scheme, holders of Scheme Shares will be able to elect to
receive:
(i) under the Share Election, not less than 0.736 New Steinhoff
Shares and not more than one New Steinhoff Share for each
Scheme Share held (as determined in accordance with the Ratio,
being a formula based on the GBP/R exchange rate which will be
calculated two business days prior to the expected Effective
Date of the Scheme); or
(ii) under the Cash Election, 100p in cash for each Scheme Share
held.
The Ratio is a formula which has been devised to seek to
preserve the economic value of the Share Election for Homestyle
Shareholders, notwithstanding changes in the GBP/Rand exchange
rate between today`s date and the Effective Date. The Ratio is
subject to upper and lower parameters, such that Steinhoff
International shall not be obliged to issue more than one New
Steinhoff Share for each Scheme Share held, but shall issue not
less than 0.736 New Steinhoff Shares for each Scheme Share
held.
The Ratio means such number of New Steinhoff Shares ("A") for
each Scheme Share held where:
A = B / C
and
B = a number equal to GBP1.20 converted into Rand using the
GBP/Rand exchange rate two business days prior to the
expected Effective Date of the Scheme; and
C = 22.50 (representing R22.50, being the 30 day volume
weighted average traded price of one Steinhoff Share
(less a discount of 9.2 per cent.) for the period up to
13 November 2006, being the date that the directors of
Steinhoff International resolved in principle to issue
the New Steinhoff Shares).
The directors of Steinhoff International are authorised to
issue the New Steinhoff Shares at a discount of up to 10 per
cent. The directors of Steinhoff International determined the
discount of 9.2 per cent. on the basis that it is the greatest
permitted discount which gives a number that reduces
complications involving roundings of shares.
However, should the Ratio give a number of New Steinhoff Shares
per Scheme Share held that would be less than 0.736, 0.736 New
Steinhoff Shares per Scheme Share held shall apply and should
the Ratio give a number of New Steinhoff Shares per Scheme
Share held that would be greater than one, one New Steinhoff
Share per Scheme Share shall apply.
On the basis of the closing price of a Steinhoff Share of
R23.51 as at 12 December 2006 (the last dealing day prior to
the date of this Announcement) and the GBP/R exchange rate as
at that date of approximately GBP1:R13.77, the Share Election
values each Scheme Share at approximately 126 pence and the
total existing issued share capital of Homestyle at
approximately GBP326.4 million (such valuation is subject to
change depending on the Rand share price of a Steinhoff Share
and the GBP/R exchange rate at the time that the Ratio is
calculated).
On the above basis, the Share Election represents a premium of
approximately 23.5 per cent. over the Closing Price of 102p per
Homestyle Share on 16 November 2006, being the last dealing day
prior to the announcement by Homestyle that it had received an
approach from Steinhoff International and Steinhoff Europe
which may or may not lead to an offer or other proposal being
made for the entire issued share capital of Homestyle which
Steinhoff Europe does not already own.
The Cash Election, which is being made available by Steinhoff
Europe, values the existing issued share capital of Homestyle
at approximately GBP259.1 million and represents a discount of
approximately 2 per cent. to the Closing Price of 102p per
Homestyle Share on 16 November 2006, the last dealing day prior
to the announcement by Homestyle that it had received an
approach from Steinhoff International and Steinhoff Europe
which may or may not lead to an offer or other proposal being
made for the entire issued share capital of Homestyle which
Steinhoff Europe does not already own.
Steinhoff Europe currently owns or controls 157,665,225
Homestyle Shares (representing approximately 61 per cent. of
Homestyle`s issued ordinary share capital). The effect of the
Proposals will be that Homestyle will become a wholly owned
subsidiary of Steinhoff Europe. The Homestyle Shares owned or
controlled by Steinhoff Europe will not be Scheme Shares and
Steinhoff Europe will not be eligible to elect for the Cash
Election or the Share Election or to receive either the Cash
Consideration or New Steinhoff Shares under the Scheme.
Scheme Shareholders may only make an election for the Share
Election in respect of their entire holding of Scheme Shares.
Fractional entitlements to New Steinhoff Shares will not be
allotted or issued pursuant to the Share Election and will be
disregarded.
Full details of the Proposals (including the Explanatory
Statement) which are subject, amongst other things, to the
terms and conditions set out in Appendix I will be sent to
Scheme Shareholders in a document expected to be posted on or
around 22 December 2006 (the "Scheme Document").
Accompanying the Scheme Document will be forms of proxy for use
in relation to the Court Meeting and the Extraordinary General
Meeting. The Scheme Document will also be accompanied by a form
of election to enable Scheme Shareholders to elect, if they so
wish, for the Share Election.
Scheme Shareholders who do not validly elect for the Share
Election will be deemed for the purposes of the Scheme to have
elected for the Cash Election.
3. Background to and reasons for the Proposals and their
recommendation
In January 2005, Homestyle announced that the Homestyle Board
had for some time considered the Homestyle Group to be
significantly over-geared and that it wished to reduce the
level of the Homestyle Group`s indebtedness. This led, later
in 2005, to Steinhoff Europe acquiring a majority interest in
Homestyle through the placing with Steinhoff Europe of new
Homestyle Shares and Steinhoff Europe`s underwriting of
Homestyle`s open offer.
Since the refinancing of Homestyle in 2005, the markets in
which Homestyle operates have continued to be testing for its
businesses. However, decisive actions were taken by Homestyle
which have contributed to improvements in the business and
better positioned trading operations. Despite the increasingly
competitive market, the Beds division has been rejuvenated by
the appointment of new management over the last year and is
back on an expansion track following the loss of some major
concession partnerships in 2005/6. The Harveys furniture
division continues to face challenging conditions. The
organisation has been restructured in recent months and
distribution systems have been improved. Additional marketing
and product support has been given by Steinhoff Europe, to
assist in realising the longer term ambitions for the business.
However, as the Homestyle Directors have consistently
indicated, the recovery is of a long term nature. The
Homestyle Group is about to enter its key trading period for
the financial year, which will in large part determine the
outcome for the year.
In considering the merits of the Proposals the Independent
Directors have considered the following matters:
* the business of Steinhoff Europe (including that of its UK
subsidiary, Steinhoff UK) consists of a network of trading,
distributing, wholesale and manufacturing companies.
Homestyle`s businesses have already begun to benefit from the
marketing and product support provided by Steinhoff Europe
since the refinancing in 2005. The Independent Directors
believe that bringing the Homestyle Group under the full
ownership of Steinhoff Europe would increase the scope for
integration of Homestyle`s businesses with those of Steinhoff
Europe and indeed the Steinhoff Group. This represents
potential opportunities for cost savings and for a wider and
more competitive product offering by Homestyle. Without this
additional support from Steinhoff Europe, it would take longer
for Homestyle to be in a position to compete strongly in its
markets, and begin to recover its earlier profitability;
* the combined shareholding of Homestyle`s top three shareholders
(together with the holding of the EBT) exceeds 75 per cent. of
the issued Homestyle Shares which has reduced the "free-float"
of Homestyle Shares, as described in the Listing Rules, to
below 25 per cent. This may result in Homestyle being requested
by the UK Listing Authority to restore its free-float, failing
which within a period of time its listing may be suspended. If
this was to occur, it would leave Homestyle Shareholders with
an illiquid market in Homestyle Shares. The acquisition by
Steinhoff Europe of the Homestyle Shares that it does not
already own will provide Homestyle Shareholders with the
opportunity to realise their investment in full either for cash
or for New Steinhoff Shares, which will be publicly traded on
the JSE; and
* the ability of the Steinhoff Group to access further capital
for Homestyle`s businesses should enable funds to be made
available to Homestyle for the purposes of assisting the growth
of Homestyle`s businesses without the associated cost of
Homestyle maintaining its listing.
The Independent Directors consider the Share Election to be an
appropriate part of the Proposals as it avails those minority
shareholders in Homestyle who followed their rights pursuant to
the refinancing in 2005 and/or remained invested as
shareholders in Homestyle and/or acquired Homestyle Shares
subsequent to the refinancing, with an opportunity to continue
to participate in the recovery of Homestyle (indirectly through
Steinhoff International) and the global, vertically integrated
business model and strategy of Steinhoff International. Scheme
Shareholders considering making an election for the Share
Election are advised to read the information relating to
Steinhoff International and the New Steinhoff Shares which will
be set out in the Scheme Document.
The decision whether to make an election for the Share Election
will depend upon individual circumstances. If Scheme
Shareholders are in any doubt as to the action they should
take, they should seek their own financial advice from an
independent adviser.
4. Future plans for the Homestyle Group
As a result of the refinancing in 2005, Homestyle is already a
subsidiary of Steinhoff Europe. Homestyle will, following the
implementation of the Proposals, become a wholly-owned
subsidiary of Steinhoff Europe.
Following completion of the Acquisition, the Steinhoff
Directors intend to continue to provide assistance to the
management of Homestyle to drive forward the long-term recovery
of Homestyle`s business. The Acquisition is in keeping with,
and should have no material effect on, the Steinhoff Group`s
business composition as a vertically integrated global
manufacturer, sourcer, distributor and retailer of household
goods and furniture.
Consistent with the Steinhoff Group`s vertical integration
strategy, the Steinhoff Directors intend to retain Homestyle as
a significant household goods retailer in the United Kingdom,
seeking to grow its footprint, retail base and trading
densities. In the process, the balance of the Steinhoff Group,
comprising its manufacturing, sourcing and distribution
businesses, stand to benefit through the potential for
increased sales of Steinhoff Group products through Homestyle`s
retail base.
The Steinhoff Directors` current intentions for Homestyle and
the Steinhoff Group are not expected to have any significant
repercussions on the existing strategies and fixed assets
(including places of business) or the terms and conditions of
employment of Homestyle or the Steinhoff Group, save for any
changes that may be necessary in order to assist Homestyle`s
long-term recovery and its concomitant contribution to the
Steinhoff Group as a whole.
5. Recommendation
The Independent Directors, who have been so advised by
Hawkpoint, consider the terms of the Proposals to be fair and
reasonable. In providing advice to the Independent Directors,
Hawkpoint has taken into account the commercial assessments of
the Independent Directors.
Scheme Shareholders considering making an election for the
Share Election are advised to read the information relating to
Steinhoff International and the New Steinhoff Shares which will
be set out in the Scheme Document. The decision whether to
make an election for the Share Election will depend upon
individual circumstances. If Scheme Shareholders are in any
doubt as to the action they should take, they should seek their
own financial advice from an independent adviser.
The Independent Directors unanimously recommend that Scheme
Shareholders vote in favour of the Scheme at the Court Meeting
and in favour of the Special Resolution the Extraordinary
General Meeting. The Independent Directors do not own, legally
or beneficially, any Homestyle Shares.
6. Information on the Steinhoff Group
Steinhoff International overview
The Steinhoff Group consists of the holding company, Steinhoff
International, and two main subsidiaries, Steinhoff Europe and
Steinhoff Africa.
Steinhoff Europe consists of a network of trading, distributing
and manufacturing companies based in Central-Eastern Europe,
Western Europe and the Pacific region. Steinhoff Europe
products include both branded and non branded household goods
and furniture. These products are sold through its own retail
chains in the UK (Homestyle), Hungary (Quattro Mobili) and
Australasia (Freedom, BaySwiss, LeatherRepublic and Capt`n
Snooze). In other instances Steinhoff Europe`s products are
sold to retailers ranging from discount retailers, buying
groups and mail order companies to speciality stores in Europe,
Southern Africa, Australia and New Zealand.
Steinhoff Africa manufactures and sells furniture and other
household, DIY and timber products for the southern African
market and, to a limited extent, for export. Steinhoff Africa
is a major supplier to most of the large retail chains in South
Africa. Steinhoff Africa also holds a controlling interest of
approximately 66 per cent. in Unitrans Limited, a JSE-listed
company involved in the provision of freight and logistics
services, motor retail, car rental and passenger services. The
Steinhoff Group also includes PG Bison Holdings (Proprietary)
Limited, which is a leading supplier of particleboard and
decorative laminates in the South African market. Steinhoff
Africa is also involved in the production of raw materials,
mainly foam and textiles, and components predominantly used in
the manufacture of household goods and furniture.
During the financial year ended 30 June 2006, the Steinhoff
Group generated revenues of R32.2 billion (approximately
GBP2.80 billion), of which Steinhoff Europe (including its
operations in the Pacific Rim) contributed approximately R14.3
billion (approximately GBP1.24 billion), or approximately 45
per cent., and Steinhoff Africa contributed approximately R17.9
billion (approximately GBP1.56 billion) or approximately 55 per
cent.
Steinhoff International is listed on the JSE, and as at 12
December 2006 had a market capitalisation of approximately R27
billion (approximately GBP1.96 billion).
Steinhoff UK
Steinhoff UK is a subsidiary of Steinhoff Europe. Steinhoff UK
was formed following the acquisition of Relyon Group plc in
2001. Its two UK bed subsidiaries, Relyon and Sprung Slumber,
produce a broad range of quality beds. Relyon caters for the
upper end of the market selling to a wide cross section of
retailers where Sprung Slumber focuses mainly on the middle
market.
Steinhoff UK also manufacturers value added foam and fibre
parts for the furnishing, automotive and industrial sectors
through its Pritex subsidiary. Steinhoff UK Holdings Limited
produces and sources household goods which are sold to
Homestyle. Steinhoff UK Furniture is a wholesale and
distribution business selling sofas and dining room furniture
manufactured in Poland, South Africa and the Far East.
Current trading
The South African retail sector is expected to become more
competitive as a result of declining consumer confidence and
disposable income. However, the Steinhoff Directors believe
that Steinhoff Africa`s timber and particle board businesses
are well positioned to benefit from demand elsewhere in the
economy. Initiatives are currently underway to expand the
Steinhoff Group`s supplier base in China, which will in
particular serve the divisions in the UK, the German region,
Australasia and South Africa.
In the German region, where the German economy is showing
moderate signs of recovery and increased consumer confidence,
Steinhoff Europe continues to grow though its existing brand
and product strategy, and relationships with major retailers,
mail order companies and buying groups. The Steinhoff
Directors expect the recovery of the Homestyle business, and
its full acquisition by Steinhoff Europe, to benefit the
trading operations of Steinhoff UK and Steinhoff Europe.
Further information on the Steinhoff Group will be contained in
the Scheme Document.
7. Information on Homestyle
The principal activity of the Homestyle Group is the retailing
of furniture and beds in the UK. It operates two divisions:
the Beds division and the Furniture division and has over 560
stores.
The Beds division operates from over 390 stores and three
formats: Bensons for Beds, Sleepmasters and The Bed Shed.
Bensons for Beds is the UK`s largest independent bed retailer
and now operates over 220 stores throughout the UK, with its
focus on offering leading brand beds at the best available
price. Sleepmasters was acquired in March 2001, and operates
from over 120 stores with an emphasis on own branded products.
The Bed Shed was acquired in September 2001 and operates from
over 50 larger format stores, predominantly located in
Scotland, focussed on a value for money proposition.
The Furniture division, which trades under the Harveys brand,
is one of the UK`s leading retailers of furniture. It operates
approximately 170 stores and trades as Harveys: The Furniture
Store. Harveys was acquired by the Homestyle Group in 2000.
The division has a strong value for money proposition aimed at
the broad mass market.
For the 61 weeks ended 1 July 2006, Homestyle`s turnover was
GBP507 million (52 weeks ended 30 April 2005 turnover of GBP454
million), and operating loss was GBP23 million (52 weeks ended
30 April 2005 operating loss GBP13 million), loss before tax
was GBP25 million (52 weeks ended 30 April 2005 loss before tax
of GBP26 million) and loss per share was 10.6 pence (52 weeks
ended 30 April 2005 loss per share of 33.3 pence).
Further information on Homestyle will be contained in the
Scheme Document.
8. Details of the New Steinhoff Shares
The Steinhoff Shares are quoted on and tradable on the JSE.
Application will be made for the New Steinhoff Shares to be
quoted and traded on the JSE with effect from the Effective
Date.
The New Steinhoff Shares will be issued free from all liens,
charges, equitable interests, encumbrances and other third
party rights and/or interests of any nature whatsoever and with
all rights attaching thereto. The New Steinhoff Shares will be
issued credited as fully paid and will rank in full for all
dividends and other distributions made or paid after the date
of their allotment and otherwise pari passu in all respects
with the existing Steinhoff Shares.
Further details of the terms of the New Steinhoff Shares and
instructions on how to elect for the Share Election will be
provided in the Scheme Document.
9. Management and employees
The Steinhoff Directors have given assurances to the
Independent Directors that, following the Scheme becoming
effective, the existing employment rights, including pension
rights, of all the employees of Homestyle will be fully
safeguarded.
10. Irrevocable undertakings and letters of intention
To become effective, the Scheme requires the approval of Scheme
Shareholders at the Court Meeting and the passing of the
Special Resolution at the EGM.
Neither Steinhoff International nor Steinhoff Europe is
entitled to vote at the Court Meeting and both will abstain
from voting at the EGM. However, Steinhoff Europe and
Steinhoff International will undertake to the Court to be bound
by the Scheme. In addition, Mr Norbert Steinhoff (a director
of Steinhoff International) is beneficially interested in
263,800 Homestyle Shares. Mr Steinhoff will abstain from
voting at the Court Meeting and at the EGM.
Court Meeting
Steinhoff International and Steinhoff Europe have received
irrevocable undertakings to vote (or procure the vote) in
favour of the Scheme at the Court Meeting (or, in the event
that the Acquisition is implemented by way of a takeover offer,
to accept such offer) in respect of 25,845,026 Homestyle Shares
in aggregate, representing approximately 25.6 per cent. of the
share capital of Homestyle expected to be in issue at the
record date for the Court Meeting and entitled to vote at that
meeting (excluding those Homestyle Shares in which Mr Norbert
Steinhoff is beneficially interested).
In addition, Steinhoff International and Steinhoff Europe have
received a non-binding letter of intention to vote (or procure
the vote) in favour of the Scheme at the Court Meeting (or, in
the event that the Acquisition is implemented by way of a
takeover offer, to accept such offer) from one Homestyle
Shareholder in respect of such Homestyle Shares as may be held
by such Homestyle Shareholder at the record date for the Court
Meeting. As at 12 December 2006 (the last dealing day prior to
the date of this Announcement), such Homestyle Shareholder
owned, or could procure the vote in respect of, 13,094,921
Homestyle Shares, representing approximately 12.9 per cent. of
the existing issued share capital of Homestyle expected to be
in issue at the record date for the Court Meeting and entitled
to vote at that meeting (excluding those Homestyle Shares in
which Mr Norbert Steinhoff is beneficially interested).
EGM
Steinhoff International and Steinhoff Europe have also received
irrevocable undertakings to vote in favour of the Special
Resolution to be proposed at the EGM in respect of a total of
25,845,026 Homestyle Shares in aggregate, representing
approximately 25.6 per cent. of the share capital of Homestyle
expected to be in issue at the record date for the EGM
(excluding the Majority Shares and those Homestyle Shares in
which Mr Norbert Steinhoff is beneficially interested).
In addition, Steinhoff International and Steinhoff Europe have
received a non-binding letter of intention to vote in favour of
the Special Resolution to be proposed at the EGM from one
Homestyle Shareholder in respect of such Homestyle Shares as
may be held by such Homestyle Shareholder at the record date
for the EGM. As at 12 December 2006 (the last dealing day
prior to the date of this Announcement), such Homestyle
Shareholder owned, or could procure the vote in respect of,
13,094,921 Homestyle Shares, representing approximately 12.9
per cent. of the share capital of Homestyle expected to be in
issue at the record date for the EGM (excluding the Majority
Shares and those Homestyle Shares in which Mr Norbert Steinhoff
is beneficially interested).
11. Structure of Proposals
(a) Introduction
The Acquisition is intended to be effected by means of a scheme
of arrangement between Homestyle and the Scheme Shareholders
under section 425 of the Companies Act, the provisions of which
will be set out in full in the Scheme Document. The purpose of
the Scheme, together with the proposed changes to the articles
of association of Homestyle, is to provide for Steinhoff Europe
to become the owner of the whole of the issued share capital of
Homestyle. The Scheme will provide for the cancellation of the
Scheme Shares and the application of the reserve arising from
such cancellation in paying up in full a number of new
Homestyle Shares which is equal to the number of Scheme Shares
cancelled and issuing them to Steinhoff Europe and/or its
nominee(s).
Scheme Shareholders will then receive either the Cash
Consideration or the Share Consideration on the basis set out
in paragraph 2 above.
To become effective, the Scheme requires the approval of Scheme
Shareholders at the Court Meeting. The Scheme also requires
the sanction of the Court and the passing of the Special
Resolution to be proposed at the EGM, as well as satisfaction
or waiver of the other conditions set out in Appendix I. Upon
the Scheme becoming effective, it will be binding on all
Homestyle Shareholders, irrespective of whether or not they
attended or voted in favour of the Scheme at the Court Meeting
or in favour of the Special Resolution at the EGM.
(b) The Meetings
Notices of the Court Meeting and the EGM will be set out in the
Scheme Document. Entitlements to attend and vote at the
Meetings and the number of votes which may be cast at them will
be determined by reference to holdings of Homestyle Shares as
shown in the register of members of Homestyle at the time
specified in the notice of the relevant Meeting.
Neither Steinhoff International nor Steinhoff Europe is
entitled to vote at the Court Meeting and both will abstain
from voting at the EGM. However, Steinhoff Europe and
Steinhoff International will undertake to the Court to be bound
by the Scheme. In addition, Mr Norbert Steinhoff (a director
of Steinhoff International) is beneficially interested in
263,800 Homestyle Shares. Mr Steinhoff will abstain from
voting at the Court Meeting and at the EGM.
The Court Meeting
The Court Meeting, which is expected to be convened for 19
January 2007, will be held at the direction of the Court to
seek the approval of the Scheme Shareholders to the Scheme. At
the Court Meeting, voting will be by way of poll and each
Scheme Shareholder present in person or by proxy will be
entitled to one vote for each Scheme Share held. The approval
required at the Court Meeting is a majority in number of those
Scheme Shareholders who are present and vote, either in person
or by proxy, and who represent 75 per cent. or more in value of
all Scheme Shares held by Scheme Shareholders represented at
the meeting.
Scheme Shareholders have the right to raise any objections they
may have to the Scheme at the Court Meeting.
It is important that as many votes as possible (whether in person or
by proxy) at the Court Meeting are cast so that the Court may
be satisfied that there is a fair and reasonable representation
of Scheme Shareholders` opinion.
A form of proxy for the Court Meeting will be sent to Scheme
Shareholders together with the Scheme Document.
The EGM
It is expected that the EGM will be convened for 19 January
2007, to consider and, if thought fit, pass the Special
Resolution (which requires votes in favour representing at
least 75 per cent. of the votes cast) to approve:
(i) the reduction of capital of Homestyle (in connection with the
Scheme);
(ii) the giving of authority to the Homestyle Directors to allot
shares in Homestyle to Steinhoff Europe, as provided for in the
Scheme; and
(iii) a share capital reorganisation and certain amendments to
the articles of association of Homestyle as described below.
Notice of the EGM will be set out in the Scheme Document.
Voting on the Special Resolution will be on a show of hands
unless a poll is demanded. The Chairman reserves the right to
demand a poll and, in such event, each Homestyle Shareholder
present in person or by proxy will be entitled to one vote for
every Homestyle Share held.
It is proposed that the articles of association of Homestyle
will be amended to ensure that any Homestyle Shares which are
issued after the EGM but before the Scheme Record Time will be
subject to and bound by the Scheme. Any Homestyle Shares
issued on the exercise of options under the Homestyle Share
Option Schemes or otherwise after the Scheme Record Time will
not be subject to the Scheme.
Accordingly, it is also proposed that the articles of
association of Homestyle will be amended so that any Homestyle
Shares issued to any person other than Steinhoff Europe (or its
nominee(s)) after the Scheme Record Time will automatically be
acquired by Steinhoff Europe (or its nominee(s)) in
consideration for the payment by Steinhoff Europe to such
person of the Cash Consideration or the issue by Steinhoff
International to such person of the Share Consideration (as
such person may elect or be deemed to have elected) as would
have been payable or issuable under the Scheme had such
Homestyle Shares been Scheme Shares. The proposed amendments
to the articles of association of Homestyle will be set out in
full in the notice of the EGM.
(c) Modifications to the Scheme
The Scheme will contain a provision for Homestyle, Steinhoff
International and Steinhoff Europe jointly to consent on behalf
of all concerned to any modifications, additions or conditions
to the Scheme which the Court may think fit to approve or
impose. The Court would be unlikely to approve of or impose
any modifications, additions or conditions to the Scheme which
might be material to the interests of Scheme Shareholders
unless Scheme Shareholders were informed of any such
modification, addition or condition. It would be a matter for
the Court to decide, in its discretion, whether or not a
further meeting of Scheme Shareholders should be held.
(d) Conditions to the Scheme
The conditions to the Scheme are set out in full in Appendix I.
The Scheme is conditional amongst other things upon:
(i) the Scheme becoming effective by not later than 28 February
2007 or such later date as Homestyle, Steinhoff International
and Steinhoff Europe may agree and (if required) the Court may
allow;
(ii) approval of the Scheme by a majority in number of the Scheme
Shareholders who are present and vote either in person or by
proxy at the Court Meeting, or any adjournment of that Meeting,
and who represent 75 per cent. or more in value of the Scheme
Shares held by such Scheme Shareholders;
(iii) the Special Resolution to be set out in the notice of EGM
being duly passed by the requisite majority at the EGM or any
adjournment of that Meeting; and
(iv) the sanction (with or without modification (but subject to such
modification being acceptable to Homestyle, Steinhoff
International and Steinhoff Europe)) of the Scheme and
confirmation of the reduction of capital of Homestyle by the
Court, an office copy of the Court Order and the minute of such
reduction attached thereto being delivered for registration to
the Registrar of Companies and, in the case of the reduction of
capital, registration of such Court Order by him.
(e) Sanction of the Scheme by the Court
Under the Companies Act, the Scheme also requires the sanction
of the Court. The Court Hearing is expected to be held on 15
February 2007, subject to satisfaction or waiver of the other
conditions. Each of Steinhoff International and Steinhoff
Europe has confirmed that it will be represented by Counsel at
the Court Hearing so as to consent to the Scheme and to
undertake to the Court to be bound by it.
The Scheme will become effective in accordance with its terms
on delivery of an office copy of the Court Order to the
Registrar of Companies, and (in relation to the reduction of
capital comprised in the Proposals) the registration of such
Court Order by him.
If the Scheme becomes effective, it will be binding on all
Homestyle Shareholders irrespective of whether or not, being
entitled to do so, they attended or voted in favour of the
Scheme at the Court Meeting or in favour of the Special
Resolution at the EGM. If the Scheme does not become effective
by 28 February 2007 (or such later date (if any) as Homestyle,
Steinhoff International and Steinhoff Europe may agree and (if
required) the Court may allow) the Scheme will not become
effective and the Scheme will not proceed.
12. Homestyle Share Option Schemes
Participants in the Homestyle Share Option Schemes will be
contacted regarding the effect of the Scheme on their rights
under the Homestyle Share Option Schemes. The effect of the
Proposals on subsisting options under the Homestyle Share
Option Schemes is summarised below.
Options granted under the Homestyle Share Option Schemes that
are not already exercisable will not become exercisable as a
result of the Scheme becoming effective. Those options will
continue to vest (if at all) in accordance with the applicable
vesting criteria for those options.
All Homestyle Shares issued prior to the Scheme Record Time on
the exercise of options will be subject to the terms of the
Scheme. The Scheme will not extend to Homestyle Shares issued,
including on the exercise of options, after the Scheme Record
Time. However, as stated above, an amendment to the articles
of association of Homestyle is to be proposed at the EGM to the
effect that Homestyle Shares issued on the exercise of options
after the Scheme Record Time will be automatically transferred
to Steinhoff Europe (or its nominee(s)) in consideration for a
payment by Steinhoff Europe to such person of such Cash
Consideration or the issue by Steinhoff International to such
person of the Share Consideration (as such person may elect or
be deemed to have elected) as would have been payable or
issuable under the Scheme had such Homestyle Shares been Scheme
Shares.
Holders of awards under the Homestyle Group PLC Share Incentive
Plan will also be contacted regarding the effect of the Scheme
on their rights. The Homestyle Shares to which such awards
relate are issued shares and will be Scheme Shares.
13. Disclosure of interests in Homestyle
Save for the irrevocable undertakings referred to in paragraph
10 above, the Homestyle Shares owned by Steinhoff Europe
referred to in paragraph 2 above and the 263,800 Homestyle
Shares in which Mr Norbert Steinhoff is interested referred to
at paragraphs 10 and 11 above, as at the date of this
Announcement, neither Steinhoff International nor Steinhoff
Europe, nor, so far as the Steinhoff Directors are aware, any
person acting in concert with either has any interest in or
right to subscribe for any relevant securities of Homestyle nor
are they party to any short positions (whether conditional or
absolute and whether in the money or otherwise) relating to
relevant securities of Homestyle, including any short positions
under derivatives, agreements to sell or any delivery
obligations or rights to require another person to take
delivery. Neither Steinhoff International nor Steinhoff
Europe, nor, so far as the Steinhoff Directors are aware, any
person acting in concert with them, has borrowed or lent any
relevant securities of Homestyle.
14. Delisting of Homestyle Shares and re-registration
The last day of dealings in, and for registration of transfers
of, Homestyle Shares is expected to be shortly before the date
of the Court Hearing, following which the Homestyle Shares will
be suspended from trading on the London Stock Exchange`s market
for listed securities.
Prior to the Scheme becoming effective, application will be
made to the UK Listing Authority for cancellation of the
listing of the Homestyle Shares on the Official List and to the
London Stock Exchange for cancellation of the Homestyle Shares
from trading on its market for listed securities. It is
expected that the de-listing will become effective from 8.00
a.m. on the Effective Date.
On the Effective Date, share certificates in respect of Scheme
Shares will cease to be valid. In addition, on the Effective
Date, entitlements to Scheme Shares held within the CREST
system will be cancelled.
It is proposed that, following the Scheme becoming effective,
and after the Homestyle Shares have been de-listed, Homestyle
will be re-registered as a private company.
15. Expected timetable
It is anticipated that the Scheme Document will be posted on or
around 22 December 2006, that the Court Meeting and the
Extraordinary General Meeting will be held on 19 January 2007,
that the Court Hearing will take place on 15 February 2007, and
that, subject to the necessary conditions being fulfilled, the
Effective Date will occur on 19 February 2007.
16. Source of finance and cash confirmation
Steinhoff Europe proposes to finance the Cash Consideration
payable pursuant to the Cash Election through a GBP100 million
acquisition facility being provided by Citibank International
plc. Further details of this facility will be contained in the
Scheme Document.
Citigroup has confirmed that it is satisfied that sufficient
resources are available to Steinhoff Europe to satisfy the Cash
Consideration payable to Scheme Shareholders, assuming all
Scheme Shareholders elect for the Cash Election.
17. Responsibility
The Steinhoff Directors accept responsibility for the
information contained in this Announcement other than the
information for which responsibility is taken pursuant to the
paragraphs below. To the best of the knowledge and belief of
the Steinhoff Directors, who have taken all reasonable care to
ensure such is the case, the information contained in this
Announcement for which they are responsible is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
The Homestyle Directors accept responsibility for all the
information contained in this Announcement (other than the
recommendation of the Proposals) relating to Homestyle, the
Homestyle Group, the opinions of Homestyle and the Homestyle
Group, the Homestyle Directors and members of their immediate
families, related trusts and their connected persons. To the
best of the knowledge and belief of the Homestyle Directors
(who have taken all reasonable care to ensure that such is the
case), the information contained in this Announcement for which
they are responsible is in accordance with the facts and does
not omit anything likely to affect the import of such
information.
The Independent Directors accept responsibility for their
recommendation of the Proposals. To the best of the knowledge
and belief of the Independent Directors (who have taken all
reasonable care to ensure that such is the case), the
information contained in this Announcement for which they are
responsible is in accordance with the facts and does not omit
anything likely to affect the import of such information.
ENQUIRIES
Steinhoff International Tel:
Piet Ferreira +27 (0)11 445 3061
Stehan Grobler +27 (0)11 445 3050
Citigroup (Financial adviser to Steinhoff) Tel:
Ian Hart +44 (0)20 7986 4000
Mark Todd +44 (0)20 7986 4000
Homestyle Tel:
Donald Macpherson +44 (0)1925 647 200
Tim Kowalski +44 (0)1925 647 200
Hawkpoint (Financial adviser to Homestyle) Tel:
Christopher Darlington +44 (0)20 7665 4563
Hudson Sandler Limited (PR adviser to Tel:
Homestyle)
Andrew Hayes +44 (0)20 7796 4133
Jessica Rouleau +44 (0)20 7796 4133
Hawkpoint, which is authorised and regulated by the Financial
Services Authority, is acting for Homestyle Group PLC and no
one else in connection with the Proposals and will not be
responsible to anyone other than Homestyle Group PLC for
providing the protections afforded to clients of Hawkpoint or
for providing advice in relation to the Proposals, the contents
of this Announcement or any transaction or arrangement referred
to in this Announcement.
Citigroup, which is authorised and regulated by the Financial
Services Authority, is acting for Steinhoff International
Holdings Limited and Steinhoff Europe AG and no one else in
connection with the Proposals and will not be responsible to
anyone other than Steinhoff International Holdings Limited and
Steinhoff Europe AG for providing the protections afforded to
clients of Citigroup or for providing advice in relation to the
Proposals, the contents of this Announcement or any transaction
or arrangement referred to in this Announcement.
This communication does not constitute an offer to sell or
invitation to purchase or subscribe for any securities or the
solicitation of an offer to buy securities, or the solicitation
of any vote or approval, in any jurisdiction pursuant to the
Proposals or otherwise. Any response in relation to the
Proposals should only be made on the basis of the information
contained in the Scheme Document.
Steinhoff International Holdings Limited and Steinhoff Europe
AG each reserve the right to elect to implement the Proposals
by making a takeover offer under the City Code for the entire
issued and to be issued share capital of Homestyle Group PLC
not already owned by Steinhoff Europe.
The release, publication or distribution of this Announcement
in jurisdictions other than the United Kingdom may be
restricted by law and therefore persons in such jurisdictions
into which this Announcement is released, published or
distributed should inform themselves about, and observe, such
restrictions. Any failure to comply with the restrictions may
constitute a violation of the securities laws of any such
jurisdiction.
The availability of the Share Election to persons not resident
in the United Kingdom may be affected by the laws of the
relevant jurisdictions. Persons who are subject to the laws of
any jurisdiction other than the United Kingdom should inform
themselves about, and observe, any applicable requirements.
The statements contained in this Announcement are made as at
the date of this Announcement, unless some other time is
specified in relation to them and the release of this
Announcement shall not give rise to any implication that there
has been no change in the facts set out in this Announcement
since that date. Nothing contained in this Announcement shall
be deemed to be a forecast, projection or estimate of the
future financial performance of Homestyle Group PLC, Steinhoff
International Holdings Limited or Steinhoff Europe AG, except
where otherwise stated.
Certain statements which appear in a number of places
throughout this Announcement may constitute "forward-looking
statements" which are statements concerning matters that are
not historical, including anticipated financial and operational
performance, business prospects and similar matters. A variety
of factors could cause the actual results and expectations of
Homestyle Group PLC, Steinhoff International Holdings Limited
or Steinhoff Europe AG to differ materially from the
anticipated results or other expectations expressed in any such
forward-looking statements. The statements, if any, are
illustrative only and do not amount to any representation that
they will be achieved as they involve risks and uncertainties
and relate to events and depend upon circumstances that may or
may not occur in the future. None of Steinhoff International
Holdings Limited, Steinhoff Europe AG or Homestyle Group PLC
assumes any obligation or intends to update these forward-
looking statements, except as required pursuant to applicable
law.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the City Code, if any
person is, or becomes, "interested" (directly or indirectly) in
1% or more of any class of "relevant securities" of Homestyle
Group PLC or Steinhoff International Holdings Limited, all
"dealings" in any "relevant securities" of that company
(including by means of an option in respect of, or a derivative
referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 pm (London time) on the London
business day following the date of the relevant transaction.
This requirement will continue until the Effective Date of the
Scheme or when the "offer period" for the purposes of the City
Code otherwise ends (or such later date(s) as the Panel may
specify). If two or more persons act together pursuant to an
agreement or understanding, whether formal or informal, to
acquire an "interest" in "relevant securities" of Homestyle
Group PLC or Steinhoff International Holdings Limited, they
will be deemed to be a single person for the purpose of Rule
8.3.
Under the provisions of Rule 8.1 of the City Code, all
"dealings" in "relevant securities" of Homestyle Group PLC or
Steinhoff International Holdings Limited, by Homestyle Group
PLC or Steinhoff International Holdings Limited or by any of
their respective "associates", must be disclosed by no later
than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose
"relevant securities" "dealings" should be disclosed, and the
number of such securities in issue, can be found on the
Takeover Panel`s website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has
long economic exposure, whether conditional or absolute, to
changes in the price of securities. In particular, a person
will be treated as having an "interest" by virtue of the
ownership or control of securities, or by virtue of any option
in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which
can also be found on the Panel`s website. If you are in any
doubt as to whether or not you are required to disclose a
"dealing" under Rule 8, you should consult the Panel on
telephone number +44 (0)20 7638 0129; fax number +44 (0)20 7236
7013.
APPENDIX I
CONDITIONS TO IMPLEMENTATION OF THE PROPOSALS
1. The Proposals will be conditional upon the Scheme becoming
unconditional and being implemented by no later than 28 February
2007 or such later date as, subject to the City Code, Homestyle,
Steinhoff International and Steinhoff Europe may agree and (if
required) the Court may allow.
The Scheme will be conditional upon:
(a) approval of the Scheme by a majority in number representing 75
per cent. or more in value of the Scheme Shares held by Scheme
Shareholders who are present and voting, either in person or by
proxy, at the Court Meeting or at any adjournment of that
Meeting;
(b) the resolution to be set out in the notice of the EGM (namely
the Special Resolution) being duly passed by the requisite
majority at the EGM or at any adjournment of that Meeting;
(c) the sanction (with or without modification (but subject to such
modification being acceptable to Homestyle, Steinhoff
International and Steinhoff Europe)) of the Scheme and the
confirmation of the reduction of capital of Homestyle by the
Court, an office copy of the Court Order and of the minute
confirming the reduction of capital of Homestyle being delivered
for registration to the Registrar of Companies in England and
Wales and, in the case of the reduction of capital of Homestyle,
registration of such Court Order by the Registrar of Companies
in England and Wales; and
(d) the JSE agreeing to admit to trading the New Steinhoff Shares
and such admission becoming effective.
2. Homestyle, Steinhoff International and Steinhoff Europe have
agreed that, subject as stated in paragraph 3 below, application to
the Court to sanction the Scheme and to confirm the reduction of
capital of Homestyle will not be made unless the conditions in
paragraphs 1(a) and (b) above had been fulfilled and, immediately
prior to the hearing of the petition to sanction the Scheme and to
confirm the reduction of capital of Homestyle (or any adjournment of
such hearing), the following conditions are satisfied or waived:
(a) all authorisations, orders, grants, recognitions,
confirmations, consents, clearances, certificates, licences,
permissions and approvals necessary or reasonably considered by
Steinhoff International and Steinhoff Europe to be appropriate
for, or in respect of, the Proposals and the implementation of
the Scheme have been obtained, in terms and in a form
reasonably satisfactory to Steinhoff International and
Steinhoff Europe and, where the absence of any thereof would,
in the reasonable opinion of Steinhoff International and
Steinhoff Europe, have a material adverse effect on the
Homestyle Group and the Steinhoff Group taken together as a
whole (the "Enlarged Group"), these remain in full force and
effect, and no intimation of an intention to revoke or not
renew any of these is received, and all necessary filings have
been made and all necessary waiting periods (including any
extensions thereof) under any applicable legislation or
regulation of any jurisdiction have expired or have been
terminated (as appropriate) and all necessary statutory and
regulatory obligations in connection with the Proposals in any
jurisdiction have been complied with;
(b) no government or governmental, quasi-governmental,
supranational, statutory or regulatory body, central bank,
trade agency, association, institution or professional or
environmental body or any court or any other similar person or
body in any jurisdiction (each an "Authority") has taken,
instituted, implemented or threatened prior to the Scheme
Record Time any action, proceeding, suit, investigation or
enquiry, or enacted, made or proposed any statute, regulation
or order, or taken any other step that would or might in any
respect which would be material to the Enlarged Group taken as
whole:
(i) require the divestiture by any member of the Enlarged
Group of all or any portion of its businesses, assets or
properties;
(ii) impose any limitation on the ability of any of them to
conduct their respective businesses or to own their
respective assets or properties; or
(iii) that would or might make the Proposals or the Scheme,
or their respective implementation, void or unenforceable
in any jurisdiction; and
(c) except as publicly announced by Homestyle prior to 13 December
2006 through a Regulatory Information Service or fairly
disclosed in writing to Steinhoff International and Steinhoff
Europe prior to 13 December 2006 and save as disclosed in the
annual report and accounts of Homestyle for the financial year
ended 1 July 2006, since 1 July 2006:
(i) there having been no material adverse change or
deterioration in the business, assets, financial or
trading position or profits or prospects of the Homestyle
Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the
Homestyle Group is or may become a party (whether as
claimant or defendant or otherwise), and no material
enquiry or investigation by or complaint or reference to
any government or governmental, quasi-governmental,
supranational, statutory, regulatory or investigative
body, authority, court, trade agency, association or
institution or professional or environmental body or any
other similar person or body whatsoever in any relevant
jurisdiction, against or in respect of any member of the
Homestyle Group, having been threatened, announced or
instituted or remaining outstanding by, against or in
respect of any member of the Homestyle Group; and
(iii) no contingent or other liability having arisen or
become apparent or increased which might be likely in
either case to have a material adverse effect on the
Homestyle Group taken as a whole.
3. Each of Steinhoff International and Steinhoff Europe reserve
the right to waive all or any of the conditions in paragraph 2
above.
4. Neither Steinhoff International nor Steinhoff Europe will
invoke any of the conditions in paragraph 2 unless the
circumstances that give rise to the right to invoke the
relevant conditions are of material significance to Steinhoff
International or Steinhoff Europe in the context of the
Acquisition.
5. Each of Steinhoff International and Steinhoff Europe reserve the
right to elect to implement the Acquisition by way of a takeover
offer. In such event, such offer will be implemented on the
same terms (subject to appropriate amendments, including
(without limitation) an acceptance condition set at 90 per cent.
of the Homestyle Shares to which such offer relates), so far as
applicable, as those which would apply to the Scheme.
APPENDIX II
DEFINITIONS
In this Announcement, unless the context otherwise requires, the
following expressions have the following meanings:
"Acquisition" the acquisition by Steinhoff Europe of the
entire issued and to be issued share capital
of Homestyle not already owned by Steinhoff
Europe, pursuant to the Proposals
"Australia" the Commonwealth of Australia, its
territories and possessions
"business day" or any day on which the London Stock Exchange
"dealing day" is open for the transaction of business
"Canada" Canada, its provinces and territories and
all areas subject to its jurisdiction and
any political sub-division of such
territories and areas
"Cash Consideration" the cash consideration payable pursuant to
the Cash Election
"Cash Election" the election under which Scheme Shareholders
may elect to receive 100p from Steinhoff
Europe per Scheme Share under the Scheme
"Citigroup" Citigroup Global Markets Limited
"City Code" the City Code on Takeovers and Mergers
"Closing Price" the middle market price of a Homestyle Share
at the close of business on the dealing day
to which such price relates, derived from
the Daily Official List of the London Stock
Exchange for that dealing day
"Companies Act" the Companies Act 1985
"Court" the High Court of Justice in England and
Wales
"Court Hearing" the hearing by the Court of the petition to
sanction the Scheme under section 425 of the
Companies Act and to confirm the reduction
of Homestyle`s share capital under section
137 of the Companies Act
"Court Meeting" the meeting of Scheme Shareholders to be
convened by order of the Court under section
425 of the Companies Act to consider and, if
thought fit, approve the Scheme, including
any adjournment of it
"Court Order" the order of the Court sanctioning the
Scheme under section 425 of the Companies
Act and confirming the reduction of capital
of Homestyle under section 137 of the
Companies Act
"CREST" the system for the holding and transfer of
uncertificated securities operated by
CRESTCo in accordance with the Regulations
"CRESTCo " CRESTCo Limited
"Daily Official List" the Daily Official List of the London Stock
Exchange
"EBT" the Homestyle Group PLC Employee Benefit
Trust
"Effective Date" the date on which the Scheme becomes
effective in accordance with its terms
"Explanatory the explanatory statement to be prepared in
Statement" compliance with section 426 of the Companies
Act and to be set out in the Scheme Document
"Extraordinary the extraordinary general meeting of
General Meeting" or Homestyle, notice of which will be set out
"EGM" in the Scheme Document, including any
adjournment of that meeting
"Hawkpoint" Hawkpoint Partners Limited
"Homestyle" Homestyle Group PLC
"Homestyle Shares" ordinary shares of 25p each in the capital
of Homestyle
"Homestyle Directors" the board of directors of Homestyle
or "Homestyle Board"
"Homestyle Group" Homestyle, its subsidiaries and subsidiary
undertakings
"Homestyle registered holders of Homestyle Shares
Shareholders"
"Homestyle Share each of the Rosebys PLC Unapproved 1997
Option Schemes" Executive Share Option Scheme; the Rosebys
PLC 2001 Approved Executive Share Option
Scheme; the Rosebys Limited 1991 Executive
Share Option Scheme; the Cantors 1996 Non-
approved Executive Share Option Scheme; the
Cantors 1996 Executive Share Option Scheme;
the Rosebys PLC 1999 Long Term Incentive
Plan and the Homestyle Group PLC Share
Incentive Plan
"Independent Donald Macpherson, Tim Kowalski and Rian du
Directors" Plessis
"JSE" the JSE Securities Exchange South Africa,
operated by the JSE Limited
"Listing Rules" the rules and regulations made by the UK
Listing Authority under Part VI of the
Financial Services and Markets Act 2000 (as
amended from time to time)
"London Stock London Stock Exchange plc
Exchange"
"Majority Shares" the 157,665,225 Homestyle Shares currently
owned or controlled by Steinhoff Europe,
together with any further Homestyle Shares
acquired by the Steinhoff Group prior to the
Scheme Record Time
"Meetings" the Court Meeting and the EGM
"New Steinhoff the up to 101,409,623 new ordinary Steinhoff
Shares" Shares (assuming no further issues of
Homestyle Shares prior to the Scheme Record
Time) to be issued to Homestyle Shareholders
in respect of the Share Consideration on the
terms to be set out in the Scheme Document
"Official List" the Official List of the UK Listing
Authority
"Panel" the Panel on Takeovers and Mergers
"Proposals" the proposals for the cancellation of the
Scheme Shares as described in this
Announcement and to be described in more
detail in the Scheme Document together with
the other matters to be considered at the
Meetings
"R" or "Rand" the lawful currency of South Africa
"Ratio" the number of New Steinhoff Shares which are
to be issued by Steinhoff International in
consideration of the cancellation pursuant
to the Scheme of each Scheme Share in
respect of which the relevant Scheme
Shareholder has elected for the Share
Election, as described in paragraph 2 of
this Announcement
"Regulations" Uncertificated Securities Regulations 2001
(SI 2001/3755), as amended
"Scheme" the scheme of arrangement proposed to be
made under section 425 of the Companies Act
between Homestyle and the holders of Scheme
Shares as described in this Announcement and
to be set out in full in the Scheme Document
with, or subject to, any modification,
addition or condition approved or imposed by
the Court and agreed to by Homestyle,
Steinhoff International and Steinhoff Europe
"Scheme Document" the document to be posted to Homestyle
Shareholders setting out the details of the
Proposals, and convening the Meetings, with
or subject to any modification, addition or
condition approved or imposed by the Court
"Scheme Record Time" 6.00 p.m. on the day which is two days
preceding the Court Hearing
"Scheme Shareholders" registered holders of Scheme Shares
"Scheme Shares" (i) the Homestyle Shares in issue at the
date of the Scheme Document;
(ii) any Homestyle Shares issued after the
date of the Scheme Document but before the
Voting Record Time; and
(iii) any Homestyle Shares issued at or
after the Voting Record Time and on or
before the Scheme Record Time in respect of
which the original or any subsequent holders
of them are, or shall have agreed in writing
to be, bound by the Scheme, in each case
other than any Majority Shares
"Share Consideration" the New Steinhoff Shares to be issued
pursuant to the Share Election
"Share Election" the election under which Scheme Shareholders
may elect to receive such number of New
Steinhoff Shares per Scheme Share as
determined in accordance with the Ratio
"Special Resolution" the special resolution to be proposed at the
EGM in connection with amendments to the
articles of association of Homestyle, the
approval of the capital reduction forming
part of the Proposals and the granting of
authority to the Homestyle Directors to
allot new Homestyle Shares
"Steinhoff Africa" Steinhoff Africa Holdings (Proprietary)
Limited
"Steinhoff Directors" the board of directors of Steinhoff
International and the board of directors of
Steinhoff Europe
"Steinhoff Europe" Steinhoff Europe AG
"Steinhoff Steinhoff International Holdings Limited
International"
"Steinhoff Group" Steinhoff International, its subsidiaries
and subsidiary undertakings
"Steinhoff UK" Steinhoff UK Beds Limited
"Steinhoff Shares" ordinary shares of R0.005 each in Steinhoff
International
"subsidiary" and have the meanings given by the Companies Act
"subsidiary
undertaking"
"UK" or "United the United Kingdom of Great Britain and
Kingdom" Northern Ireland
"UK Listing the Financial Services Authority acting in
Authority" its capacity as the competent authority for
the purposes of Part VI of the Financial
Services and Markets Act 2000
"uncertificated" shall have the meaning given in the
Regulations
"United States" means the United States of America
(including the States and the District of
Columbia), its territories, its possessions
and other areas subject to its jurisdiction
"Voting Record Time" 6.00 p.m. on the day which is two days
before the date of the Court Meeting or the
EGM or, if the Court Meeting or the EGM is
adjourned, 6.00 p.m. on the day which is two
days before the day of such adjourned
meeting
"GBP", "pence" and the lawful currency of the United Kingdom"
"p"
Date: 13/12/2006 10:50:02 Produced by the JSE SENS Department.
