HUGE GROUP LIMITED - Update on the acquisition of Connectnet Broadband Wireless (Pty) Ltd and renewal of the cautionary announcement

Update on the acquisition of Connectnet Broadband Wireless (Pty) Ltd and renewal of the cautionary announcement

HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG ISIN: ZAE000102042
(“Huge” or the “Company”)

UPDATE ON THE ACQUISITION OF CONNECTNET BROADBAND WIRELESS
PROPRIETARY LIMITED AND RENEWAL OF THE CAUTIONARY ANNOUNCEMENT

Shareholders are referred to the detailed cautionary announcement
released on SENS on 5 September 2016, wherein it was announced that Huge
had concluded a Memorandum of Agreement with CNET Empowerment
Proprietary Limited, DataWireless Proprietary Limited, DM Holdco Proprietary
Limited, Stephanus Marius Oberholzer and Unwire Communications
Proprietary Limited (collectively, the Relevant Shareholders) (“the
Memorandum of Agreement”), in terms of which Huge will purchase 100% of
the shares in and shareholder loan account claims against Connectnet
Broadband Wireless Proprietary Limited (ConnectNet) from the Relevant
Shareholders (the Proposed Transaction) for a total initial purchase
consideration of R275 000 000 (two hundred and seventy-five million Rand
only) (the Initial Purchase Consideration).

The Memorandum of Agreement records, amongst others, the following two
core commercial terms of the Proposed Transaction as agreed by Huge and
the Relevant Shareholders (collectively, the Parties):
- 45% (forty-five percent) of the Initial Purchase Consideration
   (R123 750 000) shall be paid by Huge to the Relevant Shareholders in cash
   (the Cash Portion), raised through the issue of shares (the Placement
   Shares) to certain third parties (the Subscribers);
- 55% (fifty-five percent) of the Initial Purchase Consideration (R151 250 000)
   (the Share Portion) shall be settled by Huge through the issue to the
   Relevant Shareholders of as many ordinary shares (the Consideration
   Shares) as may be required to be issued to discharge the Share Portion.
   The Consideration Shares will be issued on the same terms and conditions
   as the Placement Shares.

The Memorandum of Agreement was subject to the following conditions
precedent:
- Huge delivering expressions of interest (the Expressions of Interest) from
   Subscribers interested in subscribing for as many Huge shares (Shares) as
   are required to settle the Cash Portion of the Initial Purchase
   Consideration, on or before 17h00 on Monday, 3 October 2016; and
- the Relevant Shareholders (acting reasonably) confirming in writing that
   the Expressions of Interest are acceptable to them on or before 17h00 on
   Tuesday, 4 October 2016.
Huge has secured a letter of commitment (the Letter of Commitment) from a
leading South African financial institution (the Underwriting Party) to
underwrite the Placement Shares.

The Letter of Commitment has been delivered to the Relevant Shareholders,
and the Relevant Shareholders have confirmed in writing that the Letter of
Commitment is an Expression of Interest that is acceptable to them.

Accordingly, the Memorandum of Agreement is now unconditional.

In terms of the Memorandum of Agreement, the Relevant Shareholders
granted Huge an exclusivity period of 180 days, commencing from the date
on which the Memorandum of Agreement becomes unconditional, in which
to conclude transaction agreements (the Transaction Agreements).

Huge intends placing the Placement Shares by way of a book build (the
Bookbuild).

In terms of the Letter of Commitment, Huge will be required to allocate a
minimum of 25% (twenty five per cent) of the Placement Shares (the
Placement Participation Shares) issued pursuant to the Bookbuild, to the
Underwriting Party.

Huge shall pay the Underwriting Party an underwriting fee equal to 3% of the
amount which is underwritten by said Underwriting Party.

RENEWAL OF THE CAUTIONARY ANNOUNCEMENT
In light of the information disclosed above and the fact that negotiations
regarding other unrelated transactions, which may have an effect on the
price at which Huge shares are traded, remain underway, shareholders are
advised to continue to exercise caution when trading in their Huge shares.

Johannesburg
21 September 2016

Sponsor
Questco (Pty) Ltd

Date: 21/09/2016 03:25:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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