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SHF/JDG - Steinhoff/JD Group - Joint announcement by Steinhoff and JD Group

Release Date: 13/02/2012 14:00
Code(s): JDG SHF
Wrap Text

SHF/JDG - Steinhoff/JD Group - Joint announcement by Steinhoff and JD Group relating to the combined circular to JD Group shareholders and notice of general meeting to JD Group shareholders Steinhoff International Holdings Limited Incorporated in the Republic of South Africa (Registration number 1998/003951/06) Share code: SHF ISIN: ZAE000016176 ("Steinhoff") JD Group Limited (Incorporated in the Republic of South Africa) (Registration number 1981/009108/06) ISIN: ZAE000030771 JSE code: JDG ("JD Group") JOINT ANNOUNCEMENT BY STEINHOFF AND JD GROUP RELATING TO THE COMBINED CIRCULAR TO JD GROUP SHAREHOLDERS AND NOTICE OF GENERAL MEETING TO JD GROUP SHAREHOLDERS 1. Introduction and background Shareholders of Steinhoff ("Steinhoff Shareholders") and JD Group ("JD Group Shareholders") are referred to the announcements released by Steinhoff and JD Group, respectively, on the Securities Exchange News Service ("SENS") of the JSE Limited on 26 January 2012 ("SENS Announcements"), which outlined Steinhoff`s firm intention to extend a partial offer ("Partial Offer") to all JD Group Shareholders other than Steinhoff ("Independent JD Group Shareholders"). In terms of the Partial Offer, Independent JD Group Shareholders will be entitled to tender and sell 26.2% of their shares in JD Group ("JD Group Shares") to Steinhoff based on an exchange ratio of 16 shares in KAP International Holdings Limited ("KAP") ("Consideration Shares") for each share in JD Group ("JD Group Share") held on the closing date of the Partial Offer. On completion, the Partial Offer will result in Steinhoff acquiring an additional 38.2 million JD Group Shares, being 17.7% of the current issued share capital (excluding treasury shares) of JD Group ("JD Group`s Net Issued Share Capital"), which together with Steinhoff`s existing 32.4% shareholding in JD Group, will result in Steinhoff holding 50.1% of JD Group`s Net Issued Share Capital. Independent JD Group Shareholders are hereby advised that a combined Partial Offer circular containing details of the Partial Offer and incorporating a notice of general meeting ("Combined Circular") was posted to Independent JD Group Shareholders on Saturday, 11 February 2012. The Combined Circular is available on both JD Group`s website at www.jdgroup.co.za and Steinhoff`s website at www.steinhoffinternational.com. 2. Opinion by the independent expert The independent board of JD Group comprising Mr VP Khanyile, Mr MP Matlwa, Mr JH Schindehutte and Mr MJ Shaw ("the Independent Board") were tasked to consider whether the terms and conditions of the Partial Offer are fair and/or reasonable to Independent JD Group Shareholders. In discharging its obligations, the Independent Board undertook an independent assessment of the terms of the Partial Offer and engaged PricewaterhouseCoopers Corporate Finance Proprietary Limited ("the Independent Expert") to provide an opinion as to whether the terms and conditions of the Partial Offer are fair and/or reasonable to the Independent JD Group Shareholders, as required by regulation 110(1) of the regulations published by the Minister of Trade and Industry in terms of section 223 of the Companies Act, 71 of 2008, as amended ("the Act"). In this regard, the Independent Expert has advised the Independent Board that it has considered the terms and conditions of the Partial Offer and is of the opinion that these terms and conditions are fair and reasonable to Independent JD Group Shareholders ("Fair and Reasonable Opinion"). A copy of the Independent Expert`s Fair and Reasonable Opinion is set out in the Combined Circular. 3. Recommendation of the Independent Board The Independent Board, taking into account the Fair and Reasonable Opinion of the Independent Expert, has considered the terms and conditions of the Partial Offer and is of the opinion that the terms and conditions thereof are fair and reasonable to Independent JD Group Shareholders. In particular, the Independent Board has considered the fair value range determined by the Independent Expert and is in agreement with the fair value range so determined and has placed reliance on the valuation performed by the Independent Expert. In formulating its opinion the Independent Board has considered the price and the value of JD Group Shares relative to the price and value per KAP share. There were no factors considered to be too difficult to quantify or unquantifiable by the Independent Board when formulating its opinion. Accordingly, the Independent Board recommends that Independent JD Group Shareholders vote in favour of the ordinary resolutions to be proposed at the JD Group general meeting. The resolutions allow the Partial Offer to be approved. 4. Unaudited pro forma financial effects The pro forma financial effects of the Partial Offer on JD Group, as well as the pro forma financial effects on an Independent JD Group Shareholder accepting the Partial Offer are set out in the Combined Circular. 5. Conditions precedent The Partial Offer remains subject to the conditions precedent as set out in the announcement released by Steinhoff on 26 January 2012 and which are set out in the Combined Circular. 6. Notice of general meeting As provided in terms of Section 125(3)(b)(ii) of the Act, because the Independent JD Group Shareholders control more than 50% of the general voting rights of all the issued JD Group Shares, the Partial Offer must be approved by a simple majority of Independent JD Group Shareholders present and voting at a general meeting of JD Group Shareholders. Accordingly, a general meeting of JD Group Shareholders will be held on Monday, 12 March 2012 at 12:00 in the David Sussman Auditorium, Ground Floor, JD House, at 27 Stiemens Street, Braamfontein, Johannesburg for the purposes of considering and if deemed fit, passing the ordinary resolutions required to approve the Partial Offer in terms of section 125(3)(b)(ii) of the Act ("JD Group General Meeting"). 7. Important dates and times The important dates and times in relating to the JD Group General Meeting are set out below. Important dates and time in respect of the JD 2012 Group General Meeting Last day to trade in order to be eligible to participate and vote at the JD Group General Friday, 24 February Meeting on Record date in order to be eligible to participate and vote at the JD Group General Friday, 2 March Meeting on Forms of proxy for the JD Group General Meeting to be received by 12:00 on Thursday, 8 March JD Group General Meeting to be held at 12:00 on Monday, 12 March Results of the JD Group General Meeting to be released on SENS on Monday,12 March Results of the JD Group General Meeting to be published in the South African press on Tuesday, 13 March The Partial Offer opened today, and will remain open for at least 30 business days. . The KAP Transaction (as defined in the SENS Announcements) was approved by KAP Shareholders on 18 January 2012. The only remaining condition precedent to which the KAP Transaction is subject, is the approval of the competition authorities in South Africa ("Competition Authorities"). Accordingly, the closing date of the Partial Offer will depend on the timing on which such approval, as well as the approval of the Competition Authorities of the change of control pursuant to the Partial Offer, is obtained and the fulfillment of the remainder of the conditions precedent. A further announcement in respect of the salient dates and times of the Partial Offer will be released immediately after the approval of the Competition Authorities in respect of both transactions has been obtained. Johannesburg 13 February 2012 Investment bank and transaction sponsor to Steinhoff in relation to the Partial Offer The Standard Bank of South Africa Limited Investment bank and transaction sponsor to Steinhoff in relation to the KAP Transaction Investec Corporate Finance Sponsor to Steinhoff PSG Capital Proprietary Limited Legal adviser to Steinhoff Cliffe Dekker Hofmeyr Inc. Sponsor to JD Group PSG Capital Proprietary Limited Legal adviser to JD Group Fluxmans Inc. Independent reporting accountants to JD Group Deloitte Independent expert PricewaterhouseCoopers Corporate Finance Proprietary Limited Date: 13/02/2012 14:00:02 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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