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SHF-Steinhoff- Disposal of SA furniture interests to a Private Equity consortium This announcement appears as a matter of record only STEINHOFF INTERNATIONAL HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration no. 1998/003951/06) Ordinary share code: "SHF" ISIN: ZAE000016176 ("Steinhoff") Disposal of the South African furniture interests of Steinhoff Africa Holdings (Proprietary) Limited ("Steinhoff Africa") ("Furnco") to a Private Equity consortium led by ABSA Capital, a division of Absa Bank Limited ("AbCap") INTRODUCTION Shareholders are referred to the announcement dated 12 April 2007 wherein it was stated that Steinhoff had received approaches from certain Private Equity groups for an acquisition of Furnco. Accordingly, the directors of Steinhoff are pleased to announce that agreement has now been reached between, inter alia, Steinhoff Africa and AbCap for the disposal of Furnco, in terms of a Leverage Buyout ("the LBO"), to a consortium led by AbCap, and including Furnco management and Black Economic Empowerment partners ("BEE") (collectively, "the Consortium"). PURCHASE CONSIDERATION The purchase consideration for Furnco amounts to R1,375 billion and will be payable, effectively in cash upon fulfillment of all of the conditions precedent detailed below. OWNERSHIP OF FURNCO Upon implementation of the LBO, Furnco will be owned by Furnco management, AbCap and BEE (with an effective minimum BEE interest of 26%). RATIONALE FOR THE LBO Furnco manufactures and distributes a wide range of furniture and related products. It consists of four sub-divisions: upholstered furniture, bedding, non-solid case goods and solid case goods. These divisions are supported by an import distribution business that imports household goods to supplement the manufactured ranges and Roadway Logistics, which fulfils a large part of their logistics needs. Furnco`s product offering include many of the major furniture brands at price points ranging from the upper to lower ends of the market. Furnco has developed into a substantial self-sustaining enterprise and its current ownership structure within Steinhoff is not optimal for its continued development and growth. Furnco`s strategy had independently emerged as one driving towards the creation of an independent, broad-based household goods business. This, accompanied by the composition of Newco shareholders, notably Furnco management and BEE, are expected to deliver above-average growth opportunities in terms of BEE procurement and shareholders` interests that are perfectly aligned. Substantial synergies are also envisaged between Furnco and the larger ABSA Group`s various economic development initiatives. From a Steinhoff point of view, the LBO paves the way for the continuation and acceleration of its strategy to expand Steinhoff`s Retail interests in South Africa. FINANCIAL EFFECTS Although of substantial strategic importance to Steinhoff, the LBO is not expected to have a material effect on Steinhoff`s headline earnings and net asset value per share. CONDITIONS PRECEDENT The LBO is conditional on the fulfillment of the following conditions precedent: - the conclusion of the related comprehensive sale agreements, funding agreements and shareholders agreements (in respect of Newco); and - the necessary Regulatory approvals, notably, the Competition Authorities being obtained. Wynberg, Sandton 22 May 2007 Sponsor Legal Advisors to AbCap PSG Capital Limited Roodt Inc Date: 24/05/2007 10:46:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.
