JOHN DANIEL HOLDINGS LIMITED - Further Detailed Cautionary Announcement

Further Detailed Cautionary Announcement

JOHN DANIEL HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: JDH - ISIN: ZAE000136677
("the Company" or "JDH" or "the Group")


FURTHER DETAILED CAUTIONARY ANNOUNCEMENT


Background
Further to the cautionary announcements released on SENS, the
last one being released on 19 November 2012, JDH is pleased to
announce that the Company has signed an acquisition agreement
("Agreement") with Escalator Capital Global Limited ("Global"),
the ultimate controlling shareholder in JDH, which sets out the
acquisition of Global’s investments in three of its subsidiaries
(“the Proposed Transaction”).

One of the three subsidiaries, Escalator Capital (RF) Limited
(“Escalator Capital”) is the direct controlling shareholder of
JDH. If successful the acquisition will result in a reverse
takeover as defined in the JSE Listing Requirements and will
require shareholder approval in General Meeting.

This announcement summarises the key terms and conditions
contained in the Agreement. The Agreement is subject to certain
suspensive conditions as noted below.

Until the suspensive conditions are met, neither the Agreement
nor this announcement constitutes consummation of the Proposed
Transaction nor a firm intention on the part of JDH to make an
offer to shareholders of Escalator Capital, Escalator Capital
Namibia Limited (“Escalator Namibia”) or Escalator Africa
Limited (“Escalator Africa”) in accordance with the requirements
of the Companies Act, 2008 (No. 71 of 2008) (“the Act”) and the
Takeover Regulations or any other relevant law.

Details of the Proposed Transaction
The Proposed Transaction will, if successfully concluded,
comprise the purchase of:

  - 400 000 000 shares in Escalator Capital which represents
    66.67% of Escalator Capital’s issued capital. Escalator
    Capital is a company incorporated in terms of the laws of
    the Republic of South Africa;

  - 5 100 000 shares in Escalator Namibia, which represents
    99.99% of Escalator Namibia’s issued capital. Escalator
    Namibia is a company incorporated in terms of the laws of
    the Republic of Namibia; and
  - 420 000 000 shares in Escalator Africa, which represents
    70.00% of Escalator Africa’s issued capital. Escalator
    Africa is a company incorporated in terms of the laws of
    the Republic of Swaziland.

The purchase consideration has been determined as R46 499 982
with the effective date of the transaction being no later than
1 January 2013. The proposed purchase consideration will be
settled by the issue of 774 999 692 JDH ordinary shares issued
at the 30 day VWAP price of 6 cents per share.

JDH`s potential equity acquisition may constitute an "affected
transaction" for Escalator Capital in terms of the Act and the
Takeover Regulations thereto, and accordingly JDH may be
required to make a mandatory offer to all Escalator Capital
shareholders. JDH may also be required to make a mandatory offer
to the shareholders of Escalator Namibia and Escalator Africa.


Rationale for the Proposed Transaction
JDH believes that the Proposed Transaction represents both a
compelling value and strategic proposition for shareholders for
the following reasons:

  - the proposed acquisitions are a continuation of the JDH
    Group’s restructure and recapitalisation process initiated
    in September 2010. It is aimed at ensuring wealth
    generation and the future sustainability of the listed
    group;
  - the combined group’s statement of financial position is
    likely to reflect a significantly improved net asset value
    position and the results of operations are likely to
    support future shareholder value;
  - the enlarged Group will have direct access to fund raising
    expertise and funding lines; and
  - the enlarged listed Group intends applying to JSE Limited
    (“the JSE”) for the transfer of its listing from the
    Venture Capital Market to the Main Board of the list in due
    course.

The new Group’s main focus will be on the financial services
sector and intends changing its name to reflect the change in
shareholding and focus, subject to shareholder approval.

Conditions precedent to the Proposed Transaction
The Proposed Transaction will be subject to the fulfillment of
conditions precedent which is customary for transactions of this
nature.

Such conditions precedent include, inter alia:

  - approval of the transaction by the JDH board of directors;
  - approval of the transaction by JDH shareholders in general
    meeting;
  - approval by the Takeover Regulation Panel, if and where
    applicable;
  - approval by the South African Reserve Bank, if and where
    applicable;
  - approval by the JSE, if and where applicable.

A detailed terms announcement will, subject to the approval of
the South African Takeover Regulation Panel and the JSE be
released in due course.

Shareholders are advised to continue to exercise caution when
dealing in the Company`s shares until a further announcement is
made.

Johannesburg
14 December 2012

Sponsor
Arcay Moela Sponsors (Proprietary) Limited

Date: 14/12/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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