Wrap Text
Category 1 Transaction Announcement: Proposed Disposal by Niveus of certain Gaming Businesses
NIVEUS INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1996/005744/06)
Share code: NIV
ISIN: ZAE000169553
(“Niveus” or “the Company”)
CATEGORY 1 TRANSACTION ANNOUNCEMENT: PROPOSED DISPOSAL BY NIVEUS OF
CERTAIN GAMING BUSINESSES
1. INTRODUCTION
Shareholders are referred to the announcement released on the Stock Exchange News Service of
the JSE (“SENS”) by Hosken Consolidated Investments Limited (“HCI”) on 14 December 2016
(“HCI Announcement”), in which HCI, inter alia, announced its intention to reorganise its various
gaming investments, including its investments in Niveus and Tsogo Sun Holdings Limited
(“Tsogo”).
Shareholders are herewith advised that Niveus has accepted an indicative offer from Tsogo for the
sale of all its interests in Vukani Gaming Corporation Proprietary Limited (“Vukani”) and Galaxy
Gaming and Entertainment Proprietary Limited (“Galaxy”) and all their associated entities, trusts
and businesses (collectively the “Gaming Businesses”) to Tsogo for a purchase consideration
consisting of 160 million ordinary shares in the issued share capital of Tsogo (“Consideration
Shares”) and a cash amount equal to the agreed costs incurred by the Gaming Businesses in
respect of new gaming licences (“Proposed Transaction”).
Following the implementation of the Proposed Transaction, it is Niveus’ intention to retain the
Consideration Shares.
2. DESCRIPTION OF THE GAMING BUSINESSES
Vukani is the largest route operator of limited pay-out machines (“LPMs”) in South Africa and
manages more than 5 000 LPMs at third-party sites. It is the only LPM route operator that is
licenced in all provinces and has been involved in the industry since its inception.
Galaxy was established in 1997 to operate licensed bingo centres. Bingo is offered through
electronic bingo terminals (“EBTs”) and paper bingo games at Galaxy’s licensed bingo centres. At
present, Galaxy is licensed in Gauteng, KwaZulu-Natal, Limpopo, North West, Mpumalanga and
the Eastern Cape. Galaxy also operates the Kuruman Grand Oasis casino in the Northern Cape.
3. PARTICULARS OF THE PROPOSED TRANSACTION
In terms of the Proposed Transaction, Niveus will sell the Gaming Businesses to Tsogo as going
concerns, free of interest bearing liabilities and cash, other than working capital required in the
ordinary course of business.
The purchase consideration will comprise of:
- the Consideration Shares, the total value of which is approximately R4,648 billion, calculated
based on the volume weighted average trading price of the Consideration Shares for the
30 trading days prior to the date of this announcement; and
- a cash amount equal to the agreed costs incurred by the Gaming Businesses in respect of
new gaming licences.
The Consideration Shares will be issued to Niveus ex dividends.
4. RATIONALE FOR THE PROPOSED TRANSACTION
The rationale for the Proposed Transaction, as set out in the HCI Announcement, is to consolidate
the HCI group’s South African gaming interests under Tsogo.
The transaction enables Niveus shareholders to realise value for its investments in the LPM and
bingo industries and provides the Niveus shareholders with more diversified exposure in the
gaming, leisure and property market through the Tsogo Consideration Shares.
5. CONDITIONS PRECEDENT
The Proposed Transaction is subject to the fulfilment of the following conditions precedent
(“Conditions Precedent”):
- that Tsogo concludes, and is satisfied with the results of, a due diligence investigation in
respect of the Gaming Businesses, particularly including a review of the earnings of the
Gaming Businesses for the financial year ended 31 March 2017, which due diligence
investigation is expected to be concluded by no later than 31 May 2017;
- that the Proposed Transaction be approved by a subcommittee of independent directors of
Tsogo;
- that final formal written sale agreements are concluded between Tsogo and Niveus; and
- that the parties obtain any and all required statutory and regulatory approvals for the
implementation of the Proposed Transaction (including shareholder approval in terms of the
JSE Listings Requirements) on such conditions as are acceptable to Niveus and Tsogo.
The Conditions Precedent must be fulfilled by not later than 31 May 2017, which date may be
extended by mutual consent between the parties.
6. EFFECTIVE DATE OF THE PROPOSED TRANSACTION
Delivery and payment in respect of the Gaming Businesses shall take place on the 1st business
day of the month following the date on which the last of the Conditions Precedent is fulfilled.
The effective date of the Proposed Transaction is anticipated as being 1 June 2017.
7. FINANCIAL INFORMATION
The value of the net assets of the Gaming Businesses attributable to equity holders of Niveus at
30 September 2016 was R700 million and the attributable headline profits for the 12 months then
ended, was R210 million.
8. CLASSIFICATION OF THE PROPOSED TRANSACTION
As the value of the Proposed Transaction exceeds 30% of Niveus’ market capitalisation, it meets
the definition of a category 1 transaction as contemplated in section 9 of the JSE Listings
Requirements and accordingly is required to be approved by an ordinary resolution of the
shareholders of Niveus.
Tsogo is a related party to Niveus due to the fact that it is a subsidiary of HCI (which is Niveus’
holding company). The Proposed Transaction is therefore a related party transaction in terms of
the JSE Listings Requirements and will require a fairness opinion to be prepared by an
independent expert and the approval of the Niveus shareholders by an ordinary resolution.
The Proposed Transaction also constitutes the sale of the greater part of the assets or undertaking
of Niveus in terms of section 112 of the Companies Act and will require the approval of the
Takeover Regulation Panel and compliance with the provisions of section 115 of the Companies
Act. The board of directors of Niveus has retained the right to make the Proposed Transaction
conditional on a maximum threshold of shareholders that exercise their appraisal rights in
accordance with section 115 of the Companies Act. The threshold will inter alia be determined by
the cash resources available to the group to satisfy any claims under section 115.
As a result of the above, a fairness opinion will be prepared by an independent expert and will be
included in the circular to Niveus shareholders referred to in paragraph 9 below, a general meeting
of Niveus shareholders will be convened and a special resolution in respect of the Proposed
Transaction will be required to be approved by Niveus shareholders at such general meeting.
9. CIRCULAR
A circular containing the full details of the Proposed Transaction, incorporating a notice convening
the required Niveus general meeting and a copy of the fairness opinion, will be posted to
shareholders in due course and the salient dates and times of the Proposed Transaction, including
the date of the general meeting, will be announced on SENS once the circular has been posted.
10. CAUTIONARY
Niveus shareholders are referred to the renewal of a cautionary announcement released by Niveus
on SENS on 18 November 2016 and are advised that, as the particulars of the Proposed
Transaction have now been announced, caution is no longer required to be exercised by
shareholders when dealing in Niveus securities.
Cape Town
14 December 2016
Sponsor: PSG Capital Proprietary Limited
Date: 14/12/2016 04:02:00 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.
Sharenet Sites 
