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SUI/RAH - Sun International Limited/Real Africa Holdings Limited - Firm

Release Date: 01/12/2011 10:58
Code(s): RAH SUI
Wrap Text

SUI/RAH - Sun International Limited/Real Africa Holdings Limited - Firm intention announcement SUN INTERNATIONAL LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1967/007528/06) Share code: SUI ISIN:ZAE000097580 ("Sun International") REAL AFRICA HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1994/003919/06) (Share code: RAH) (ISIN: ZAE000008702) ("RAH" or "the Company") JOINT ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER BY SUN INTERNATIONAL (SOUTH AFRICA) LIMITED ("OFFEROR"), A WHOLLY-OWNED SUBSIDIARY OF SUN INTERNATIONAL, TO ACQUIRE ALL OF THE ORDINARY SHARES IN THE ISSUED SHARE CAPITAL OF RAH (WHICH IT DOES NOT ALREADY OWN) ON THE BASIS SET OUT IN THIS JOINT ANNOUNCEMENT 1. INTRODUCTION RAH and Sun International shareholders are referred to the RAH announcement released on SENS on 30 August 2011 wherein RAH shareholders were advised that Sun International, through the offeror, had expressed an interest to acquire the entire issued ordinary share capital of RAH ("the RAH shares") that Sun International does not indirectly (through the offeror) already own ("the proposed acquisition"). The offeror has notified the board of directors of RAH of its intention to proceed with the proposed acquisition to be implemented by way of an offer by the offeror to acquire all the RAH shares in issue, other than those held by the offeror, ("offer shares") in terms of Section 117(1)(c)(v) of the Companies Act, No. 71 of 2008, as amended from time to time, (the "Companies Act") read with Section 117(f) and in terms of the Takeover Regulations, Chapter 5 (Fundamental Transactions and Takeover Regulations) of the Companies Regulations, 2011 promulgated under the Companies Act ("the Takeover Regulations") ("the offer"). 2. THE OFFER 2.1 Terms of the Offer Subject to the approvals and/or consents to effect the offer being granted by the Takeover Regulation Panel ("TRP") and the JSE Limited ("JSE") the offeror intends to make an offer to acquire all of the offer shares for a cash consideration of 422 cents per RAH share (the "offer consideration"). The offer consideration represents: - a 26% premium to the RAH market price of 335 cents as at the date prior to the initial cautionary announcement on SENS, being 7 December 2010 (the "cautionary announcement"); and - a 27% premium to the 30 day volume weighted average trading price of RAH of 331 cents for the 30 day period to the date prior to the cautionary announcement. In the event that the RAH shareholders holding at least 90% (ninety percent) of the offer shares accepts the offer within 4 (four) months after the date the date of the offer, the offeror reserves the right to invoke the provisions of Section 124 of the Companies Act to compulsorily acquire all of the offer shares in respect of which the offer was not accepted. Should the offeror become entitled to and elect to exercise its entitlement in terms of Section 124 of the Companies Act, RAH will become a wholly-owned subsidiary of Sun International and an application will be made to the JSE for the listing of the RAH shares on the JSE to be terminated. 2.2 Payment of the offer consideration and cash confirmation The offeror confirms that it has sufficient cash resources and/or facilities to satisfy, in full, the offer consideration. In this regard, the TRP has been furnished with independent written confirmation from RMB and Nedbank that the offeror has sufficient cash resources and / or facilities to satisfy, in full, the offer consideration. 3. RATIONALE AND REASONS FOR THE OFFER RAH`s primary investment is its 76,8% interest in Afrisun Leisure Investments (Pty) Limited`s ordinary shares and 100% interest in Afrisun Leisure SW, KZ, and AG shares. - Afrisun Leisure holds minority interests in a number of Sun International`s subsidiaries namely: - Afrisun Gauteng (Pty) Limited (Carnival City casino) (22,9% effective economic interest); Afrisun KZN (Pty) Limited (Sibaya casino) (14,6% effective economic interest); - Emfuleni Resorts (Pty) Limited ("Emfuleni") (Boardwalk casino and Fish River Sun) (3,5% effective economic interest); - SunWest International (Pty) Limited (GrandWest casino and Table Bay Hotel) (14,9% effective economic interest); - Worcester Casino (Pty) Limited (Golden Valley casino and lodge) (9,7% effective economic interest); - Zonwabise Resorts (Pty) Limited (Holds an effective 20,3% in Emfuleni) (26,7% effective economic interest); - National Casino Resort Manco (Pty) Limited (33,0% effective economic interest); and - Gauteng Casino Resort Manco (Pty) Limited (30,0% effective economic interest). The offer will create a single listed point of entry into the Sun International Group whilst simultaneously increasing Sun International`s exposure to its own existing core gaming activities. The offeror currently owns 66.53% of the RAH shares in issue with Grand Parade Investments Limited ("GPI") and Utish Investments (Pty) Limited ("Utish") collectively owning 30,57% of the RAH shares. The RAH shares therefore have very limited liquidity and RAH minority shareholders have limited options to realise their investment. Only 0,003% of RAH`s shares trading in a 30 day period (0,007% over 60 days) up to Tuesday, 29 November 2011, the date prior to this announcement. The offer provides RAH shareholders with an opportunity to realise the underlying value of their investment in RAH, whilst reducing the distribution costs associated therewith, thereby maximising value for RAH shareholders. 4. PRO FORMA FINANCIAL EFFECTS OF THE OFFER The table below sets out the pro forma financial effects of the offer on a RAH shareholder who accepts the offer: Market Offer Change value consideration(1 (%)
before ) (cents) the offer (cents)
Financial effects as at 7 December 2010(2): Market value (3) 335 422 26% 30-day volume weighted average 331 422 27% (4) 60-day volume weighted average 323 422 31% (5) 242 422 74%
Net asset value (RAH balance sheet for the year ended 30 June 2011) (6) Net asset value (RAH directors` 349 422 21% valuation) (6) Issued shares, net of treasury 361.9 shares (million) Notes and assumptions: (1) No account has been taken of adjustments for interim RAH distributions, taxes, commissions or any other charges in calculating the above financial effects. (2) All financial effects, other than the net asset value calculations, are calculated as at 7 December 2010, being the last trading day prior to the publication of the cautionary announcement by Sun International. (3) The closing market price per RAH share on 7 December 2010. (4) The volume weighted average traded price of RAH shares over the 30 trading days up to and including 7 December 2010, being the last trading day prior to the publication of the cautionary announcement by Sun International. (5) The volume weighted average traded price of RAH shares over the 60 trading days up to and including 7 December 2010, being the last trading day prior to the publication of the cautionary announcement by Sun International. (6) Per RAH annual report for the year ended 30 June 2011. 5. IRREVOCABLE UNDERTAKINGS Each of Utish and GPI, who collectively hold 110 641 690 RAH shares (constituting 30,57% of the RAH shares in issue excluding treasury shares) have irrevocably and unconditionally undertaken to accept the offer within 2 business days of the offer being made. 6. SUN INTERNATIONAL SHAREHOLDINGS IN RAH The offeror currently owns a beneficial interest of 66.53% in RAH ordinary shares (excluding treasury shares). Neither the offeror nor Sun International have traded in RAH shares over the last six months. 7. RECOMMENDATION AND FAIR AND REASONABLE OPINION A sub-committee of the RAH board of directors comprising of the three independent directors of RAH (the "Independent Board") was formed for the purposes of considering the offer according to the requirements of the Takeover Regulations. The Independent Board has appointed KPMG Services (Proprietary) Limited, an independent advisor acceptable to the TRP, to provide it with external advice in relation to the offer and to make appropriate recommendations to the Independent Board for the benefit of RAH shareholders. The Independent Board has received an opinion from the independent expert to the effect that the offer consideration is fair and reasonable. The substance of the external advice and the views of the Independent Board will be detailed in the offer circular to be sent to RAH shareholders in relation to the offer. The Independent Board, based on the information currently available is satisfied that the offer is fair and reasonable and unanimously recommend to RAH shareholders that they accept the offer by tendering their RAH shares in terms of the offer 8. THE OFFER CLOSING DATE The closing date of the offer is 12:00 on Friday, 27 January 2012. RAH shareholders that wish to accept the offer must accordingly do so (in the manner stipulated in the offer circular) by not later than 12:00 on Friday, 27 January 2012. The payment of the offer consideration will be made to RAH shareholders as set out in paragraphs 9 and 10 below. 9. SALIENT DATES AND TIMES 2011 Opening date of offer at 09:00 Monday, 5 December 2012
Last day for RAH shareholders to trade on the Friday, 20 January JSE to participate in the offer Shares trade ex the right to participate in the Monday, 23 January offer Record date on which RAH shareholders must be Friday, 27 January recorded in the register in order to participate in the offer Closing date of the offer (12:00) Friday, 27 January
Results of the offer announced on SENS Monday, 30 January Results of the offer published in the press on Tuesday, 31 January
Offer consideration posted to offer Offer consideration participants who have not dematerialised their settlement dates, being RAH shares (once documents of title have been within six business received) days after acceptance of the offer until the sixth business day after the closing date
Offer consideration credited to the CSDP or Offer consideration broker, as the case may be, of offer settlement dates, being participants who have dematerialised their RAH within six business shares and who have accepted the offer days after acceptance of the offer until the sixth business day after the closing date Notes: 1) The above dates and times are subject to amendment following the approval from the TRP. Any such change will be announced on SENS and/or published in the press. 2) All times indicated above are South African times. 10. ACTIONS TO BE TAKEN BY RAH SHAREHOLDERS RAH shareholders that wish to accept the offer ("offer participants") and who have dematerialised their RAH shares, either in whole or in part, should instruct their duly appointed CSDP or broker, in the manner and time stipulated in the agreement governing their relationship with their CSDP or broker, to accept the offer and electronically deliver their RAH shares. The offer consideration will be credited to the CSDP or broker, as the case may be, of offer participants who have dematerialised their RAH shares and accepted the offer, at their risk and dealt with in terms of the custody agreement entered into between the offer participant and their CSDP or broker, on the respective dates set out in paragraph 9 above. RAH shareholders who have not dematerialised their RAH shares ("certificated RAH shareholders") who wish to accept the offer must complete the form of acceptance, surrender and transfer attached to the offer circular in accordance with the instructions contained therein and forward it together with the relevant documents of title, by hand or by mail to the transfer secretaries, Computershare Investor Services 2004 (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61763, Marshalltown, 2107) so as to be received by not later than 12:00 on the closing date. The offer consideration will be posted to certificated RAH shareholders accepting the offer, on the respective dates set out in paragraph 9 above, provided the form of acceptance, surrender and transfer, together with the relevant document(s) of title (in negotiable form) are received by the transfer secretaries before 12:00 on the closing date of the offer. Additional copies of the form of acceptance, surrender and transfer to be used by certificated RAH shareholders who wish to accept the offer may be obtained from the offices of Sun International`s transfer secretaries, Computershare Investor Services 2004 (Proprietary) Limited. 11. DOCUMENTATION Further details of the offer will be included in the offer circular to be sent to RAH shareholders, containing, inter alia, a form of acceptance, surrender and transfer. The offer circular is expected to be posted to RAH shareholders on or about Monday, 5 December 2011. 12. RESPONSIBILITY STATEMENT Sun International and the Independent Board accept responsibility for the information contained in this firm intention announcement. To the best of their respective knowledge and belief, the information contained in this announcement is true and nothing has been omitted which is likely to affect the import of the information. Johannesburg 1 December 2011 Investment bank to Sponsor to Sun Attorneys to Sun Sun International International International Investec Bank Investec Bank ENS Limited Limited Independent Expert Sponsor to RAH Attorneys to RAH to RAH KPMG Investec Bank Bowman Gilfillan Limited Date: 01/12/2011 10:58:04 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.

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