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Acquisition of 8 000 000 Ordinary Shares in KWV Holdings Ltd
NIVEUS INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1996/005744/06)
Share code: NIV
ISIN: ZAE000169553
(“Niveus”)
ANNOUNCEMENT OF AN ACQUISITION BY NIVEUS OF 8 000 000 ORDINARY SHARES IN THE
ISSUED SHARE CAPITAL OF KWV HOLDINGS LIMITED (“KWV”)
1. INTRODUCTION
Niveus hereby advises shareholders that it has concluded an agreement to acquire 8 000 000
ordinary shares of KWV from Withmore Investments 1 Proprietary Limited (the “Seller”), being
11.67% of the issued share capital of KWV net of treasury shares (the “Sale Shares”), in exchange
for cash and the issue of new Niveus ordinary shares (“Niveus Shares”) on the terms set out in
paragraph 4 below (the “Transaction”).
2. RATIONALE FOR THE TRANSACTION
The Transaction will enable the Seller to effect an exchange which provides them with an
opportunity to diversify their investment and have access to the potential returns of the broader
asset base of Niveus which operates in industries other than those directly related to KWV.
3. OVERVIEW OF KWV
KWV is one of the leading wine and spirits producers in South Africa. The company sources wines
and grapes from the best and most sought after viticultural regions in South Africa. In addition,
KWV owns several internally renowned brands such as Roodeberg, KWV Wines, Laborie, Golden
Kaan, Cathedral Cellar, Cafe Culture, jimmijagga, Wild Africa Cream and the KWV 3, 5, 10, 15 and
20-year old brandies.
4. TERMS OF THE TRANSACTION
Niveus has concluded an agreement to acquire the Sale Shares from the Seller, being 11.67% of
the issued share capital of KWV net of treasury shares, in exchange for a cash amount of
R7,344,000, and the issue of 5,500,000 new Niveus Shares.
Niveus shareholder approval placing the unissued shares under the control of the Niveus directors
has been granted by way of an ordinary resolution in terms of clause 9.2.2 of Niveus’ memorandum
of incorporation.
5. CONDITIONS PRECEDENT
The Transaction is not subject to any conditions precedent and will be effective from the date of
issue of the 5,500,000 Niveus Shares, which is expected to be on or about 14 December 2012.
6. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The table below sets out the financial effects of the Transaction on Niveus shareholders assuming
that Niveus acquires the Sale Shares based on the unaudited interim results of Niveus for the six
months ended 30 September 2012. As the pro forma financial effects are unaudited and
illustrative, they may not give a true reflection of the financial effects of the Transaction. The
Niveus directors are responsible for the preparation of the unaudited pro forma financial
information.
Before the
Transaction - as After the
reported 30 Transaction (2)(3)(4)(5)
September 2012 (1) (6)(7)
% Change
Earnings per Niveus share (cents) 10.60 326.52 2,980.4%
Headline earnings per Niveus share (cents) 12.68 4.72 (62.8%)
Net asset value (“NAV”) per Niveus share (cents) (8) 467.37 727.31 55.6%
(8)
Net tangible asset value (“NTAV”) per Niveus share (cents) 415.88 660.54 58.8%
Weighted average number of Niveus shares (thousands”) 82,879 88,376 6.6%
Actual number of Niveus shares (thousands”) 107,119 112,619 5.1%
Notes:
The unaudited pro forma financial information is indicative only and has been based on the assumptions set
out below:
1. The financial information shown in the “Before the Transaction” column has been extracted from the
unaudited consolidated interim results of Niveus for the six month period ended 30 September 2012.
2. The effects of the Transaction have been calculated using the unaudited consolidated six month results of
KWV for the six month period ended 30 June 2012. These results were calculated by subtracting the 6
month results to 31 December 2011 from the 12 month results to 30 June 2012.
3. It has been assumed that the transactions were effected on 1 March 2012 for income statement purposes
and on 30 September 2012 for balance sheet purposes.
4. It has been assumed that after the implementation of the Transaction, Niveus will hold an effective 51.6%
of KWV and will control KWV. As a result, it is assumed that KWV is accounted for as a subsidiary and will
no longer be accounted for as an associate of Niveus.
5. Interest earned on the cash foregone as a result of the cash consideration paid, being R7,344,000, was
calculated at a pre-tax rate of 5.46%.
6. Once off transaction costs have been excluded from the pro forma financial effects.
7. The negative goodwill arises as a result of KWV being consolidated by Niveus and is calculated as the
difference between the net asset value of KWV which will be consolidated less purchase consideration for
the KWV shares, the carrying value of the investment in associate in Niveus’ accounts and the share of
KWV’s net assets owned by minorities. The negative goodwill is excluded from headline earnings per
share and accounts for the difference in the effect on earnings and headline earnings per share.
8. The increase in NAV is attributable to the net effect of the consolidation of KWV.
9. Niveus has not yet conducted an exercise in terms of IFRS 3 to identify and value any intangible assets
not currently recognised on KWV’s balance sheet. The detailed identification and valuation exercise will
only be completed once the Transaction is implemented.
7. NIVEUS SHAREHOLDINGS IN KWV
At the Last Practicable Date, being 10 December 2012, Niveus owns a direct and indirect beneficial
interest of 27,365,648 KWV ordinary shares (39.93% of KWV’s ordinary shares (net of treasury
shares)).
8. RESPONSIBILITY STATEMENT
The Transaction is categorised as a Category 2 transaction for Niveus in terms of the Listings
Requirements of the JSE Limited. As a result, Niveus is required to publish this announcement
containing details of the Transaction.
Niveus accepts responsibility for the information contained in this announcement. To the best of its
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.
Cape Town
11 December 2012
Investment Bank and Sponsor to Niveus:
Investec Bank Limited
Legal Advisers to Niveus:
Edward Nathan Sonnenbergs Inc
Date: 11/12/2012 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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