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THE POTENTIAL ACQUISITION BY BIDVEST OF THE ENTIRE ISSUED SHARE CAPITAL OF

Release Date: 16/07/2001 16:08
Code(s): BVT PAG
Wrap Text
PARAGON
The Bidvest Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06
("Bidvest")
Paragon Business Communications Limited
(Incorporated in the Republic of South Africa)
(Registration number 1995/007711/06)
("Paragon")

THE POTENTIAL ACQUISITION BY BIDVEST OF THE ENTIRE ISSUED SHARE CAPITAL OF PARAGON 1. INTRODUCTION
Further to the cautionary announcement issued on 12 June 2001, Investec Bank Limited is authorised to announce that Bidvest has concluded an agreement with certain shareholders of Paragon who collectively hold 50,2% of the total number of Paragon shares in issue ("the majority shareholders"), and an agreement with Paragon ("the agreements"). In terms of the agreements Bidvest or a subsidiary of it will, subject to the fulfillment of certain conditions which are referred to in paragraph 4 below, extend an offer to the shareholders of Paragon in terms of Section 440 of the Companies Act, 1973 ("the Act") to purchase all their Paragon shares ("the offer"), or propose a scheme of arrangement in terms of Section 311 of the Act between Paragon and its shareholders pursuant to which Paragon will become a wholly owned subsidiary of Bidvest ("the scheme").
The board of directors of Paragon will appoint a financial advisor to the transaction when appropriate. Accordingly, an opinion on the aforementioned transaction from both the advisor and the board of directors of Paragon will become available after Bidvest has indicated that it will proceed with the transaction. 2. PURCHASE CONSIDERATION
The purchase consideration payable for each Paragon share by Bidvest or its subsidiary in terms of the offer or the scheme will be R0,76 (seventy six cents) or an amount based on the Tangible Net Asset Value per share of Paragon as at 30 June 2001, less R0,014 (one point four cents) ("NAV per share"), whichever is the lower amount, with a minimum payment of R0.70 (seventy cents) per share.
Interest at a rate of 9,72% per annum will be payable on the purchase consideration with effect from 1 October 2001 until the conditions
pertaining to the offer (if it is made) or the scheme (if it is proposed) are fulfilled. 3. IRREVOCABLE UNDERTAKINGS
Each of the majority shareholders has irrevocably undertaken to accept the offer in respect of all its shares in Paragon (if it is made), and to cast all of the votes attaching to its shares in Paragon in favour of the scheme (if it is proposed). 4. CONDITIONS PRECEDENT
The obligation of Bidvest or its subsidiary to extend the offer or propose the scheme and post the offer or scheme circular, is conditional, inter alia, upon the following:
- the NAV per share being not less than R0,70 (seventy cents) as at 30 June 2001. Bidvest is entitled to waive this condition;
- approvals, insofar as may be necessary, of the appropriate documentation by the JSE Securities Exchange South Africa, the Securities Regulation Panel and the Exchange Control Division of the South African Reserve Bank;
- approvals of the Competition Authorities in terms of the Competition Act, 1998 being duly given for the implementation of the offer or the scheme; and - Bidvest being satisfied with the results of a due diligence investigation to be undertaken by it into the affairs of Paragon. The due diligence investigation will not take place before the relevant approvals required from the Competition Authorities have been obtained.
The offer or the scheme, whichever is applicable,will be conditional upon, inter alia, the acceptance of the offer by at least 90% of the Paragon shareholders or the approval by at least 75% of the Paragon shareholders present and voting at the scheme meeting. 5. FURTHER ANNOUNCEMENTS
An announcement setting out the salient details (including terms and
conditions) of the offer or the scheme, the mechanics thereof, the actual purchase consideration, as well as the financial effects on Paragon
shareholders will be published in the press in due course. Cape Town 16 July 2001
Merchant bank Attorneys to Bidvest
Investec Bank Limited Bowman Gilfillan Inc
Lead sponsor to Bidvest Attorneys to Paragon Investec Securities Findlay and Tait Sponsor to Paragon PSG

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