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Declaration information in relation to a renounceable rights offer of R10 billion and cautionary announcement
WOOLWORTHS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1929/001986/06
Share code: WHL ISIN: ZAE000063863
("WHL" or the “Company” or the “Group”)
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA AND JAPAN,
OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF
APPLICABLE LAW OR REGULATION
DECLARATION INFORMATION RELATING TO A RENOUNCEABLE RIGHTS OFFER OF
R10 BILLION AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders of WHL (“Shareholders”) are referred to the announcements released
on the Stock Exchange News Service (“SENS”) of the JSE Limited (“JSE”) on Wednesday,
9 April 2014 and Friday, 16 May 2014, relating to the acquisition by WHL of the entire issued
share capital of David Jones Limited (“David Jones”) (“the Acquisition”).
Shareholders are further referred to the announcement released on SENS on Tuesday, 17
June 2014 relating to the approval by the requisite majority of Shareholders of all the
resolutions proposed at a general meeting of Shareholders held on Tuesday, 17 June 2014
relating to the Acquisition.
For purposes of the Acquisition, an unsecured syndicated facility agreement was entered
into by WHL and Woolworths Proprietary Limited with, among others, Citibank, N.A., London
Branch, J.P. Morgan Limited and The Standard Bank of South Africa Limited (as mandated
lead arrangers and bookrunners) and Citibank, N.A., South Africa Branch, JPMorgan Chase
Bank, N.A., Johannesburg Branch and The Standard Bank of South Africa Limited (as
underwriters and lenders) for the provision of a short-term equity bridge facility in a principal
amount of up to R11 billion (“the Equity Bridge Facility”).
The board of directors of WHL (the "Board") is pleased to announce that the Company
intends to raise a gross total of R10 billion through a fully underwritten renounceable rights
offer ("the Rights Offer") for purposes of repaying the Equity Bridge Facility, subject to the
satisfaction of the conditions precedent set out in paragraph 3 below.
A further announcement setting out the full terms and finalisation information of the Rights
Offer will be released on or about Tuesday, 2 September 2014.
2. RATIONALE AND APPLICATION OF PROCEEDS
The Acquisition, completed on 1 August 2014, is part of WHL´s strategy to further expand its
international operations in order to transform itself into a leading southern hemisphere
fashion retailer with sufficient scale to compete effectively with global apparel retailers.
The combination of WHL and David Jones (the “Enlarged Group”) provides significant
advantages that will benefit both companies and their customers. The Enlarged Group will
have increased scale that will drive significant efficiencies through enhanced global sourcing
and the ability to leverage common seasonality and fashion trends, improving value for the
customer and overall profitability.
The Acquisition was completed for A$2.15 billion* (R21.6 billion) in cash and was funded
using:
- A$993 million (R10.0 billion) from the Group's cash holdings;
- A$891 million (R9.0 billion) from the Equity Bridge Facility (excluding transaction costs),
which will be repaid with the proceeds from the Rights Offer; and
- A$264 million (R2.7 billion) from the senior syndicated facility made available by
Commonwealth Bank of Australia, National Australia Bank Limited and Westpac Banking
Corporation (“the Australian Senior Facility”).
* All A$ figures have been converted at the R/A$ exchange rate of 10.0675
In light of the foregoing and the Enlarged Group’s capital structure, the Board has formed
the view that it is prudent to raise equity capital from Qualifying Shareholders (WHL ordinary
shareholders registered in the WHL share register on the Record Date (as specified below),
excluding holders of treasury shares and WHL’s American Depository Receipts, and who do
not have their registered address in any jurisdiction in which it would be unlawful to make
the Rights Offer) in order to repay the Equity Bridge Facility used to fund the Acquisition.
In reaching this view, the Board has given due consideration to the continued
implementation of the Enlarged Group’s strategy.
3. CONDITIONS PRECEDENT
The implementation of the Rights Offer is subject to the fulfilment of the following conditions
precedent:
- approval by the JSE of the circular relating to the Rights Offer ("the Rights Offer
Circular");
- approval by the JSE of the application for the listing of the Letters of Allocation
envisaged in terms of the Rights Offer and of the application for listing of any Rights
Offer shares required for implementation of the Rights Offer on the JSE; and
- any other relevant approvals required by the JSE.
4. SALIENT DATES AND TIMES OF THE RIGHTS OFFER
Subject to the fulfilment of the conditions precedent as set out in paragraph 3 above, the
proposed salient dates and times for the Rights Offer are set out below:
2014
Finalisation announcement released on SENS Tuesday, 2 September
Last day to trade in WHL ordinary shares in order to participate Friday, 5 September
in the Rights Offer (cum rights)
WHL ordinary shares commence trading ex-rights at 09:00 on Monday, 8 September
Listing of and trading in the Letters of Allocation on the Monday, 8 September
exchange operated by the JSE commences at 09:00 on
Rights Offer Circular and form of instruction posted to Tuesday, 9 September
certificated Qualifying Shareholders
Record Date for the Rights Offer Friday, 12 September
Rights Offer opens at 09:00 on Monday, 15 September
Letters of Allocation credited to an electronic account held at the Monday, 15 September
Computershare Investor Services Proprietary Limited (the
“Transfer Secretaries”) in respect of certificated Qualifying
Shareholders
CSDP or broker accounts credited with rights in respect of Monday, 15 September
dematerialised Qualifying Shareholders
Rights Offer Circular and Form of Instruction, where applicable, Tuesday, 16 September
posted to dematerialised Qualifying Shareholders
Last day for trading Letters of Allocation on the exchange Thursday, 18 September
operated by the JSE
Listing of Rights Offer shares and trading therein on the Friday, 19 September
exchange operated by the JSE commences at 09:00 on
Payment to be made and Form of Instruction to be lodged with Friday, 26 September
the Transfer Secretaries by certificated Qualifying Shareholders
by 12:00 on
Rights Offer closes at 12:00 on Friday, 26 September
Record Date for the Letters of Allocation Friday, 26 September
Rights Offer shares issued on or about Monday, 29 September
Entitlement in respect of subscriptions for Rights Offer shares Monday, 29 September
available from
Central Securities Depository Participant’s (“CSDP”) or Broker Monday, 29 September
accounts of dematerialised Qualifying Shareholders
credited/debited and updated with Rights Offer shares
Share certificates posted to certificated Qualifying Shareholders Monday, 29 September
by registered post on or about
Results of the Rights Offer and basis of allocation of excess Monday, 29 September
Rights Offer shares announced on SENS
Results of the Rights Offer and basis of allocation of excess Tuesday, 30 September
Rights Offer shares published in the South African press
Rights Offer shares in respect of successful excess applications Wednesday, 1 October
(if applicable) issued on or about
CSDP or broker accounts of dematerialised Qualifying Wednesday, 1 October
Shareholders credited/debited and updated with Rights Offer
shares in respect of successful excess applications (if
applicable)
Share certificates in respect of successful excess applications (if Wednesday, 1 October
applicable) posted to certificated Qualifying Shareholders by
registered post on or about
Refund cheques posted to certificated Qualifying Shareholders Thursday, 2 October
in respect of unsuccessful excess applications (if applicable) on or about
Notes:
1. Share certificates in respect of WHL ordinary shares may not be dematerialised or re-materialised between
Monday, 8 September 2014 and Friday, 12 September 2014, both days inclusive.
2. CSDP effect payment on a delivery versus payment basis in respect of dematerialised Shares.
3. Dematerialised Qualifying Shareholders are required to inform their CSDP or brokers of their instructions in
terms of the Rights Offer in the manner and time stipulated in the agreement governing the relationship between
the Qualifying Shareholder and their CSDP or Broker. Dematerialised Qualifying Shareholders are advised to
contact their CSDP or broker as early as possible to establish what the cut-off dates and times are for
acceptance of the Rights Offer, as set out in the custody agreement, as this may be earlier than the proposed
closing time of the Rights Offer.
4. Any changes to the dates and times will be announced on SENS and in the press.
5. All times are South African Standard time.
5. CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the final terms, and pro forma financial effects, of the Rights
Offer will be announced in due course. Shareholders are accordingly advised to exercise
caution when dealing in the Company's securities until a further announcement regarding
the Rights Offer is made.
Cape Town
29 August 2014
Investor contacts:
WHL
Ralph Buddle
Head of Corporate Finance and Investor Relations
T: +21 27 407 3250
M: + 27 83 412 4923
Joint Bookrunners and Underwriters
Citigroup Global Markets Limited (“Citi”)
J.P. Morgan Securities plc (“J.P. Morgan”)
The Standard Bank of South Africa Limited (“Standard Bank”)
Transaction Sponsor to WHL:
Standard Bank
Lead Independent Sponsor to WHL:
Rand Merchant Bank (a division of FirstRand Bank Limited)
Legal advisers to WHL
Linklaters LLP
Webber Wentzel
Gilbert + Tobin
Legal advisers to the Joint Bookrunners
Latham & Watkins (London) LLP
Bowman Gilfillan Inc.
Financial Adviser
Rothschild
NOTICE TO RECIPIENTS
This announcement is not for distribution, directly or indirectly, in or into the United States
(including its territories and dependencies, any State of the United States and the District of
Columbia), Canada and Japan.
This announcement includes certain "forward-looking statements" that reflect the current views
or expectations of the Board with respect to future events and financial and operational
performance. All statements other than statements of historical fact are, or may be deemed to
be, forward-looking statements, including, without limitation, those concerning: the Group's
strategy; the economic outlook for the industry; use of the proceeds of the Rights Offer; the
Group’s ability to successfully integrate the operations of David Jones and recognise expected
synergies; future operating results; growth prospects; and the Enlarged Group's liquidity and
capital resources and expenditure. These forward-looking statements are not based on
historical facts, but rather reflect the Group's current plans, estimates, projections and
expectations concerning future results and events and generally may be identified by the use of
forward-looking words or phrases such as "believe", "expect", "anticipate", "intend", "should",
"planned", "may", "potential" or similar words and phrases.
This announcement does not constitute an offer of, or an invitation to purchase, any securities
of the Company in any jurisdiction. This announcement does not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in the United States. The securities
mentioned herein (the “Securities”) have not been, and will not be, registered under the United
States Securities Act of 1933 (the “Securities Act”). The Securities may not be offered or sold in
the United States absent registration or an applicable exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. There will be no public offer of the
Securities in the United States, Canada and Japan.
Citi, J.P. Morgan, Standard Bank and Rothschild are acting exclusively for the Company and no
one else in connection with the Rights Offer. They will not regard any other person (whether or
not a recipient of this announcement) as their respective clients in relation to the Rights Offer
and will not be responsible to anyone other than the Company for providing the protections
afforded to their respective clients nor for giving advice in relation to the Rights Offer or any
transaction or arrangement referred to herein. No representation or warranty, express or
implied, is made by Citi, J.P. Morgan, Standard Bank and Rothschild as to the accuracy,
completeness or verification of the information set forth in this announcement, and nothing
contained in this announcement is, or shall be relied upon as, a promise or representation in this
respect, whether as to the past or the future.
Citi, J.P. Morgan, Standard Bank and Rothschild assume no responsibility for its accuracy,
completeness or verification and, accordingly, disclaim, to the fullest extent permitted by
applicable law, any and all liability which they might otherwise be found to have in respect of this
announcement or any such statement.
Date: 29/08/2014 08:35:00 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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