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Intention by Primedia to acquire remaining shares in NAIL.
New Africa Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06)
Share code: NAI and NAN
ISIN: ZAE000033338 and ZAE000033346
(NAIL) or (Company)
Primedia Proprietary Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/044403/07)
(Primedia) or (Offeror)
JOINT ANNOUNCEMENT OF A FIRM INTENTION BY PRIMEDIA TO ACQUIRE ALL OF THE NAIL
ORDINARY SHARES AND ALL OF THE NAIL N ORDINARY SHARES IN THE ISSUED SHARE
CAPITAL OF NAIL WHICH IT DOES NOT ALREADY OWN
1. INTRODUCTION
The boards of each of NAIL and Primedia announce that Primedia has informed the board of directors of
NAIL (NAIL Board) of its intention to make an offer to acquire all of the NAIL Ordinary Shares and NAIL
N Ordinary Shares (collectively the NAIL Shares) not already held by it (Offer Shares), from the
NAIL Ordinary Shareholders and NAIL N Ordinary Shareholders (collectively the NAIL Shareholders),
in terms of Section 117(1)(c)(v) of the Companies Act, No. 71 of 2008, as amended, (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).
This firm intention announcement serves to provide the NAIL Shareholders with an overview of the
terms and conditions of the Offer.
2. RATIONALE FOR THE OFFER
Primedia is a focused media company with interests in broadcasting, other forms of advertising and
filmed entertainment.
Currently, Primedia is the majority shareholder of NAIL, holding 76.06% of NAIL Ordinary Shares and
95.81% of NAIL N Ordinary Shares in issue. Primedias preference is to hold 100% of media assets
under its control, which enables it to fully integrate the assets in question into the Primedia business and
to derive synergies with the other media assets within its portfolio.
The holding of 100% of NAIL is in line with Primedias strategy.
Primedia, as the controlling shareholder of NAIL, believes that the economic costs of maintaining the
listing of NAIL on the JSE far outweigh the economic benefits for NAIL as well as NAIL Shareholders.
In addition, the NAIL Shares have not traded since NAILs suspension from the JSE in August 2006, and
the Offer provides NAIL Shareholders with an opportunity to realise their investments at a premium to
the net asset value of 29.2 cents per NAIL Share as at 30 June 2012.
3. THE OFFER
3.1 Terms of the Offer
Primedia hereby offers to acquire all of the NAIL Ordinary Shares and all of the NAIL N
Ordinary Shares not already held by it on the terms set out below:
3.1.1 Offer Consideration
Offeree shareholders who accept the Offer may elect to receive either:
3.1.1.1 an initial cash consideration of 59.48 cents per NAIL Share (Initial Cash
Portion) plus an attributable portion of the potential agterskot which will be
payable as and when the Tax Claim is determined; or
3.1.1.2 a once-off cash offer consideration of 102.96 cents per NAIL Share with no
agterskot (Once-Off Offer Consideration), at a premium of 253% to the net
asset value of 29.2 cents per NAIL Share as at 30 June 2012.
3.1.2 The agterskot
The agterskot, if any, will be calculated by reference to the outcome of the balance of
NAILs claim against the South African Revenue Service for historical income tax
overpayments (plus interest and penalties thereon) (Tax Overpayment Claim).
Assuming that the Tax Overpayment Claim is settled in full in NAILs favour, NAIL
estimates that (based on the current values excluding any interest after 30 June 2012),
the maximum amount that could be realised is an amount of R4.743 million, or 3.75
cents per NAIL Share.
The attributable portion of the potential agterskot will be net of any costs incurred in
realising the Tax Overpayment Claim and will be paid by Primedia within 21 days of the
final determination of the Tax Overpayment Claim.
3.1.3 Condition precedent
The Offer is conditional on the acceptance of the Offer by NAIL Shareholders (other
than Primedia) holding at least 90% of the NAIL Ordinary Shares and at least 90% of
the NAIL N Ordinary Shares.
3.2 Payment of the offer consideration and cash confirmation
Primedia confirms that it has sufficient cash resources and/or facilities to satisfy, in full, the offer
consideration. In this regard, the Takeover Regulations Panel (TRP) has been furnished with
an irrevocable unconditional guarantee issued by First National Bank, in favour of the NAIL
Shareholders for the sole purpose of fully satisfying the cash offer commitments.
3.3 Offerors intention to invoke the provisions of section 124 of the Companies Act
If NAIL Shareholders (other than Primedia) holding at least 90% (ninety percent) of NAIL
ordinary shares and at least 90% of NAIL N Ordinary Shares accept 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 Primedia become entitled to and elect to exercise its entitlement in terms of Section 124
of the Companies Act, NAIL will become a wholly-owned subsidiary of Primedia and an
application will be made to the JSE for the listing of the NAIL Shares on the JSE to be
terminated.
Primedia intends to invoke the Section 124 provisions at an offer price equal to the Once-Off
Offer Consideration, as outlined in paragraph 3.1.1.2.
3.4 Offer period
The Offer will be open for acceptance from 9:00 on Friday, 30 November 2012 and will close at
12:00 on Friday, 18 January 2013.
The Offeror expressly reserve the right, subject to approval by the TRP, to extend the closing
date of the Offer in accordance with the Takeover Regulations and any other applicable laws
and regulations. An announcement regarding any such extension will be released on SENS and
published in the press.
4. PRO FORMA FINANCIAL EFFECTS OF THE OFFER
The table below sets out the pro forma financial effects of the Offer on a NAIL Shareholder who accepts
the offer:
NAIL Ordinary Share NAIL N Ordinary Share
Before the Offer After the Offer % change Before the Offer After the Offer % change
cents cents % cents cents %
Market value (1) 30.00 102.96 243% 30.0 102.96 243%
Net asset value (2) 29.20 102.96 253% 29.20 102.96 253%
Notes:
1. The NAIL Shares have been suspended from trading on the JSE since 17 August 2006. The Before the Offer
column reflects the closing market price of 30 Cents per NAIL Share on 17 August 2006. The After the Offer
column reflects the Once-off Offer Consideration of 102.96 cents per NAIL Share.
2. The Before the Offer column reflects the net asset value per NAIL Share as at 30 June 2012, calculated on
the basis of 126 622 669 NAIL Shares in issue as at that date. The After the Offer column reflects the Once-
off Offer Consideration of 102.96 cents per NAIL Share.
5. IRREVOCABLE UNDERTAKINGS
Capricorn Capital Partners Investments Proprietary Limited (Capricorn), which holds 21.60% of the
NAIL Ordinary Shares in issue (90.23% of the NAIL Ordinary Shares not held by Primedia), and 3.92%
of the NAIL N Ordinary Shares in issue (93.60% of NAIL N Ordinary Shares not held by Primedia),
has irrevocably and unconditionally undertaken to accept the Offer.
6. PRIMEDIA SHAREHOLDING IN NAIL
Primedia currently owns a beneficial interest of 76.06% of the NAIL Ordinary Shares and 95.81% of the
NAIL N Ordinary Shares. Primedia has not traded in NAIL Shares over the last six months.
7. RECOMMENDATION AND FAIR AND REASONABLE OPINION
An independent board of NAIL (Independent Board) comprising three independent directors of NAIL,
namely R Bruyns, T Fearnhead and R Shough appointed in accordance with the Companies Act, was
formed for the purposes of considering the Offer according to the requirements of the Takeover
Regulations.
The Independent Board has appointed Grant Thornton Business Risk Service Proprietary Limited, an
independent expert acceptable to the TRP (Independent Expert), to provide it with external advice in
relation to the offer and to make appropriate recommendations to the Independent Board for the benefit
of NAIL 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 NAIL Shareholders
in relation to the Offer.
8. SALIENT DATES AND TIMES
Date of posting of the Offer circular to NAIL Shareholders Thursday, 29 November 2012
Opening date of the Offer from 9:00 Friday, 30 November 2012
Record date of the Offer at the close of business Friday, 18 January 2013
Closing date of the Offer at 12:00 Friday, 18 January 2013
Results of the Offer to be released on SENS Monday, 21 January 2013
Results of the Offer to be published in the press Tuesday, 22 January 2013
Once-off Offer Consideration and Initial Cash Portion of the Offer consideration settlement date,
Agterskot Offer Consideration posted to NAIL Shareholders being within six business days after
who have not dematerialised their NAIL Shares (NAIL the later of the Offer being declared
Shareholders will receive either a direct deposit or a posted wholly unconditional and acceptance of
cheque): the Offer
Once-off Offer Consideration and Initial Cash Portion of the Offer consideration settlement date,
Agterskot Offer Consideration paid to the CSDP or Broker, the later of the Offer being declared
as the case may be, of dematerialised NAIL Shareholders, wholly unconditional and acceptance of
whose acceptance of the Offer has been received by the the Offer
transfer secretaries
Notes:
1) The above dates and times are subject to amendment by the Offeror provided that such amendment is
approved by 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.
9. CIRCULAR
Further details of the Offer will be included in the Offer circular to be sent to NAIL Shareholders,
containing, inter alia, a form of acceptance, surrender and transfer. The Offer circular is expected to be
posted to NAIL Shareholders on or about Thursday, 29 November 2012.
10. RESPONSIBILITY STATEMENT
NAIL and the Independent Board accept responsibility for the information contained in this
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 importance of the
information.
Investment Bank
Investec Bank Limited
Legal advisor to NAIL and Primedia
Edward Nathan Sonnebergs
Sponsor to NAIL
Investec Bank Limited
Johannesburg
2 November 2012
Date: 02/11/2012 10:52:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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