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VUN - Vunani - Acquisition And Renewal Of Cautionary Announcement VUNANI LIMITED (formerly Vunani Capital Holdings (Proprietary) Limited) (Incorporated in the Republic of South Africa) (Registration number 1997/020641/06) (JSE code: VUN & ISIN: ZAE000110359) ("Vunani" or "the Company") ACQUISITION OF A FURTHER 35% STAKE IN EDGE HOLDING COMPANY (PROPRIETARY) LIMITED ("EDGE") AND RENEWAL OF CAUTIONARY ANNOUNCEMENT 1. INTRODUCTION Shareholders are referred to the cautionary announcement, dated 30 May 2008, and are advised that a Sale of Shares Agreement has been entered into between Northern Ocean Investments 48 (Proprietary) Limited ("the purchaser"), a wholly owned subsidiary of Vunani Capital (Proprietary) Limited ("Vunani Capital"), and Edge ("the agreement") in terms of which Vunani Capital, via Northern Ocean, will acquire an additional 35% of the entire issued share capital of Edge on the terms and conditions set out below ("the transaction"). Vunani Capital is a wholly-owned subsidiary of Vunani. 2. BACKGROUND INFORMATION Vunani Capital holds an existing 10% interest in Edge which was acquired in July 2006. At that time Edge had funds under management of R2.1 billion which amount has increased nearly three-fold to its current funds under management of R6.0 billion. Edge is today one of South Africa`s largest managers of fund of hedge funds on behalf of pension funds and high net worth individuals. An internal restructuring within Edge has made it possible for Vunani to acquire the additional 35% equity stake in that company without significantly diluting the senior executives` shareholding. Prior to this restructuring the shareholding of Edge comprised the senior executives of Edge with 65%, investors 25% and Vunani 10%. The vendors to Vunani are the Trustees for the time being of the Kirsten Family Trust, the SWP Trust and the Hyde Park Trust and Herman Johan Viljoen. Subsequent to the transaction, the senior executives of Edge will hold 55% of its equity and Vunani 45%. The beneficial shareholders of Edge will be as follows: HJ Viljoen 34.7% JM Kirsten 15.3% Other senior executives of Edge 5.0% Vunani 45.0% 100.0% 3. RATIONALE FOR THE TRANSACTION The transaction presents an opportunity for Vunani to expand its operational activities in fund of hedge fund management and strengthens its strategy to build a financial services business comprising a number of operating businesses. It is the intention of the shareholders of Edge to re-brand the company, Vunani Edge, to more fully reflect the active role of Vunani and its executives in the business. 4. PURCHASE CONSIDERATION The purchase consideration of R96.25 million will be discharged in cash on the payment date as defined in the agreement and will be funded by borrowings. A potential additional amount of up to R43.75 million ("the additional consideration") will be payable in cash or Vunani shares or a combination of cash and Vunani shares at the purchaser`s election. The additional consideration is subject to a stepped formula relating to the funds under management of Edge growing to R6.8 billion by 28 February 2009. If applicable, the additional consideration shall be payable on 30 March 2009. 5. EFFECTIVE DATE In terms of the agreement, the transaction will come into effect on 1 March 2008 subject to the successful fulfilment of the conditions precedent set out in paragraph 6 below. 6. CONDITIONS PRECEDENT The transaction is conditional, inter alia, upon: - the completion of a satisfactory due diligence by the purchaser; - the board of the purchaser approving the transaction; - Edge shareholders approving the transaction; - service, confidentiality and restraint agreements for Mr HJ Viljoen and Mr JM Kirsten being entered into; - compliance with any regulatory obligations to the extent required by law to effect the transaction, including, if appropriate, approval of the Competition Commission; - the execution of a shareholders` agreement governing the relationship of shareholders of Edge. Warranties as are normal in transactions of this nature have been provided. 9. CLASSIFICATION OF THE TRANSACTION The transaction is classified as a Category 2 transaction in terms of the Listings Requirements of the JSE Limited. 10. RENEWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are advised to continue exercising caution when dealing in the Company`s securities on the JSE Limited until such time as the financial effects of the transaction are published. Johannesburg 10 June 2008 Designated Advisers: Merchant Sponsors (Proprietary) Limited Vunani Corporate Finance Advisers to Edge Leaf Capital (Proprietary) Limited Date: 10/06/2008 10:54:44 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
