ITALTILE LIMITED - Update on Acquisition of Ceramic Industries Proprietary Limited ("Ceramic")

Update on Acquisition of Ceramic Industries Proprietary Limited ("Ceramic")

ITALTILE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1955/000558/06)
Share code: ITE ISIN: ZAE000099123
(“Italtile” or “the Group”)

UPDATE ON ACQUISITION OF CERAMIC INDUSTRIES PROPRIETARY LIMITED ("CERAMIC")

Further to the SENS announcements published on 26 April 2016, 9 June 2016 and 20 July 2016,
Italtile submitted a binding offer ("Binding Offer") on 16 July 2016 to Ceramic, to acquire up to a
further 73.5% of the company´s issued share capital ("the Acquisition"). In terms of the Acquisition,
the purchase consideration equates to R3.61 billion which will be settled in cash (50%) and the
balance by the issue of Italtile shares at R11.57 per share.

The Acquisition remains subject to attainment of certain conditions precedent and approval from
the competition authorities. Shareholders are referred to the SENS announcements published on
20 and 28 July 2016, 11 August 2016, 14 and 21 September 2016, 10 February 2017 and 17 March
2017, as well as the Acquisition circular dated 23 August 2016, for further detail in this regard.

Following the Competition Commission´s ("the Commission´s") prohibition of the Acquisition, the
Group filed a Request for Consideration with the Competition Tribunal ("the Tribunal") and
subsequently an in limine hearing was held with the Tribunal on 25 and 26 October 2016 to
consider certain circumscribed aspects of the proposed merger.

On 10 February 2017 the Group advised in its Reviewed Condensed Results announcement for the
six months ended 31 December 2016 that a full hearing with the Tribunal was scheduled to take
place between 6 and 15 March 2017.

Shareholders were subsequently advised that, following a request from the Commission,
proceedings scheduled for between 6 and 15 March 2017 would be delayed to enable the
Commission additional time to prepare for the hearing, including verifying key industry information
which the Commission indicated may be dispositive to its concerns regarding the proposed
Acquisition.

Accordingly, new Tribunal hearing dates were scheduled for 10 to 14 July 2017, with presentation
of final arguments scheduled for 31 July 2017.

These dates were beyond the previously agreed extension date of 30 June 2017 stipulated in the
Binding Offer and Implementation Agreement. Approval was therefore requested and obtained
from the Boards of Italtile and Ceramic to:
  - further extend the date for fulfilment of the Conditions contained in paragraphs 9.4(a), 9.4(f),
9.4(h) and 9.4(m) of the Binding Offer to 30 September 2017; and

  - further extend the date for fulfilment of the Conditions contained in clauses 5.1(c)(v),
5.1(c)(vii) and 5.1(c)(xii) of the Implementation Agreement to 30 September 2017.

The hearings scheduled for 10 to 14 July 2017 have subsequently been concluded, although
presentation of final arguments is now scheduled to take place on 18 August 2017. It is anticipated
that the entire process will conclude within the next two months.

Italtile remains optimistic of a favourable outcome in terms of obtaining the required approvals
from the competition authorities to proceed with the Acquisition.
Shareholders will be apprised of the details of the ruling as soon as practicable thereafter.

Johannesburg
1 August 2017

Sponsor
Merchantec Capital

Legal Advisor to Italtile
Hogan Lovells (SA) Inc.

Corporate and Legal Advisor to Rallen
Rabin & Associates Proprietary Limited

Corporate and Legal Advisor to Ceramic
Prinsloo, Tindle and Andropoulos Inc.

Date: 01/08/2017 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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