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NASPERS LIMITED - Unbundling of Novus Holdings Limited Shares to Naspers Shareholders

Release Date: 05/09/2017 17:30
Code(s): NPN     PDF:  
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Unbundling of Novus Holdings Limited Shares to Naspers Shareholders

Naspers Limited
(Incorporated in the Republic of South Africa)
Registration number: 1925/001431/06
Share code: NPN
ISIN: ZAE000015889
(“Naspers”)

UNBUNDLING OF NOVUS HOLDINGS LIMITED SHARES TO NASPERS SHAREHOLDERS

1.   Background and rationale for the Unbundling
     1.1. Naspers “N” and “A” shareholders (“Naspers Shareholders”) are referred to the announcement released on
          SENS on 3 August 2017 in terms of which Naspers Shareholders were advised that the Competition Tribunal
          had approved the merger filing by Media24 Proprietary Limited (“Media24”) concerning the change of control
          in Novus Holdings Limited (“Novus”) (“Merger Filing”). The Merger Filing includes a condition that Media24
          divest itself of the majority of its shareholding in Novus whilst permitting Media24 to retain a non-controlling
          minority stake in Novus of 19% (“Merger Condition”).
     1.2. Media24 has subsequently approved the unbundling of the majority of its shareholding in Novus, being
          151,786,287 Novus shares (“Unbundled Novus Shares”), to Naspers.

2.   Further details of the Unbundling
     2.1. In order to comply with the Merger Condition, the Naspers board of directors has resolved to unbundle all of
          the Unbundled Novus Shares it receives from Media24 to Naspers Shareholders (“Unbundling”) by way of
          a distribution in specie in terms of section 46(1)(a)(ii) of the South African Companies Act, 2008 (“Companies
          Act”) and section 46 of the South African Income Tax Act, 1962 (“Income Tax Act”).
     2.2. The Unbundled Novus Shares will be unbundled in the intended ratio of 0.34588 Novus shares and 0.06918
          Novus shares for every one Naspers N share and every one Naspers A share respectively (“Unbundling
          Ratio”) held at the close of business on the Unbundling record date (“Record Date”).
     2.3. Accordingly, Media24 will first distribute the Unbundled Novus Shares to Naspers following which Naspers
          will unbundle the Unbundled Novus Shares on the terms as set out in this SENS announcement to Naspers
          Shareholders.

3.   Implementation of the Unbundling
     3.1. Naspers Shareholders, who hold their “A” and “N” Naspers shares (“Naspers Shares”) in certificated format,
          (“Certificated Naspers Shareholders”) will be issued their respective Unbundled Novus Shares in
          certificated form. Pursuant to the Unbundling, share certificates will be posted, at the risk of the Certificated
          Naspers Shareholders, by registered post in South Africa on about the first business day after the Record
          Date (“Operative Date”) to the addresses reflected in the share register of Naspers on the Record Date.
     3.2. Such Certificated Naspers Shareholders are advised that they will have to dematerialise the Unbundled
          Novus Shares received by them in certificated form prior to trading in such Novus shares on the JSE Limited
          (“JSE”).
     3.3. Naspers Shareholders, who hold their Naspers Shares in dematerialised format (“Dematerialised Naspers
          Shareholders”) will have their accounts at their Central Securities Depository Participant (“CSDP”) or broker
          updated on the Operative Date with the relevant Unbundled Novus Shares pursuant to the Unbundling.
     3.4. Documents of title in respect of Naspers Shares (“Documents of Title”) are not required to be surrendered
          in order to receive the Unbundled Novus Shares.
     3.5. To the extent that Certificated Naspers Shareholders wish to received their Unbundled Novus Shares in
          dematerialised format, those Naspers Shareholders should contact Link Market Services Proprietary Limited
          (“Transfer Secretaries”) directly.

4.   Fractional entitlements
     4.1. Where a Naspers Shareholder’s entitlement to Unbundled Novus Shares distributed in terms of the
          Unbundling, calculated on the basis of the Unbundling Ratio, results in a fractional share entitlement, such
          fraction of an Unbundled Novus Share will be rounded down to the nearest whole number, resulting in
          allocations of whole Unbundled Novus Shares and a cash payment will be made to the Naspers Shareholder
          for the fraction.
     4.2. The applicable cash payment will be determined with reference to the volume weighted average price
          (“VWAP”) of an Unbundled Novus Share traded on the JSE on the first business day after the last day to
          trade in Naspers Shares in order to participate in the Unbundling (“LDT Date”), (being the day on which
          Naspers Shares begin trading “ex” the entitlement to receive the Unbundled Novus Shares), discounted by
          10%. The basis for the applicable cash payment will be announced on SENS two business days after the
          LDT Date.
     4.3. For illustrative purposes, this SENS announcement assumes the VWAP of an Unbundled Novus Share
          traded on the JSE on the first business day after the LDT Date to be 725 cents. The basis for the applicable
          cash payment would therefore be 653 cents (725 cents discounted by 10%).
     4.4. Example of fractional entitlement:
          This example assumes that a Naspers Shareholder holds 100 Naspers N shares at the close of business on
          the Record Date.
          Unbundled Novus Share entitlement = 100 x 0.34588 (being the Unbundling Ratio for Naspers N shares) =
          34.588 Unbundled Novus Shares. The rounding provision described above is then applied and the
          Shareholder will receive:
          34 Unbundled Novus Shares in respect of the 100 Naspers N shares held and a cash payment for the
          fractional entitlement based on the 653 cents noted above of 653 x 0.588 = 384 cents.

5.   Distributions to foreign Naspers Shareholders
     5.1. The distribution of Unbundled Novus Shares to persons resident in jurisdictions outside of South Africa
          (“Foreign Naspers Shareholders”) in terms of the Unbundling may be affected by the laws of such Foreign
          Naspers Shareholders’ relevant jurisdiction. Those Foreign Naspers Shareholders should consult their
          professional advisers as to whether they require any governmental or other consent or need to observe any
          other formalities to enable them to take up their entitlements.
     5.2. This paragraph sets out the restrictions applicable to Naspers Shareholders who have registered addresses
          outside South Africa, who are nationals, citizens or residents of countries other than South Africa, or who are
          persons (including, without limitation, custodians, nominees and trustees) who have a contractual or legal
          obligation to forward this document to a jurisdiction outside South Africa or who hold shares for the account
          or benefit of any such Foreign Naspers Shareholder.
     5.3. It is the responsibility of any Foreign Naspers Shareholder (including, without limitation, nominees, agents
          and trustees for such persons) being notified by this SENS announcement of the Unbundling and wishing to
          take up their entitlement to Unbundled Novus Shares to satisfy themselves as to the full observance of the
          applicable laws of any relevant territory, including obtaining any requisite governmental or other consents,
          observing any other requisite formalities and paying any issue, transfer or other taxes due in such territories.
     5.4. Foreign Naspers Shareholders are obliged to observe the applicable legal requirements of their relevant
          jurisdictions.
     5.5. Notification in terms of this SENS announcement will not constitute an offer of Unbundled Novus Shares in
          those jurisdictions in which it would be illegal to make such an offer and, in those circumstances, this SENS
          announcement, will only be for information purposes. No person being notified in terms of this SENS
          announcement in any territory, other than South Africa, may treat the same as constituting an offer to such
          person unless, in the relevant territory, such an offer could lawfully be made to him without contravention of
          any registration or other legal requirements.
     5.6. Accordingly, persons (including, without limitation, nominees, agents and trustees) being notified in terms of
          this SENS announcement should not distribute or send the same to any person in, or citizen or resident of,
          or otherwise into any jurisdiction where to do so would or might contravene local securities laws or
          regulations. Any person who does distribute this SENS announcement into any such territory (whether under
          a contractual or legal obligation or otherwise) should draw the recipient’s attention to the contents of this
          paragraph.
     5.7. Naspers reserves the right, but shall not be obliged, to treat as invalid any distribution of Unbundled Novus
          Shares, in terms of the Unbundling, which appears to Naspers or its agents to have been executed, effected
          or dispatched in a manner which may involve a breach of the securities laws or regulations of any jurisdiction
          or if Naspers believes or its agents believe that the same may violate applicable legal or regulatory
          requirements.
     5.8. An excluded Foreign Naspers Shareholder (“Excluded Foreign Naspers Shareholder”) includes any
          Foreign Naspers Shareholder who is unable to receive any of the Unbundled Novus Shares to be distributed
          to him because of the laws of the jurisdiction of that Naspers Shareholder, or any Foreign Naspers
          Shareholder that Naspers is not permitted to transfer any of the Unbundled Novus Shares to because of the
          laws of the jurisdiction of that Foreign Naspers Shareholder. The Unbundled Novus Shares to which Excluded
          Foreign Naspers Shareholders would be entitled in terms of the Unbundling may be aggregated and disposed
          of on the JSE in an orderly manner by the Transfer Secretaries on behalf of and for the benefit of Excluded
          Foreign Naspers Shareholders as soon as is reasonably practical after the implementation of the Unbundling
          at the best price that can reasonably be obtained at the time of sale.
     5.9. CSDPs will be responsible for informing the Transfer Secretaries of all dematerialised Naspers Shares held
          by them on behalf of such Excluded Foreign Naspers Shareholders.
     5.10. Excluded Foreign Naspers Shareholders will, in respect of their entitlement to the Unbundled Novus Shares,
           receive the average consideration per Unbundled Novus Share (net of transaction and currency conversion
           costs) received by the Transfer Secretaries pursuant to the sale process as set out in the preceding sub-
           paragraph. The average consideration per Unbundled Novus Share due to each Excluded Foreign Naspers
           Shareholder will only be paid once all such Unbundled Novus Shares have been disposed of.

6.   South African exchange control
     The Unbundled Novus Shares are not freely transferable from the common monetary area and must be dealt with
     in terms of the South African Exchange Control Regulations, promulgated in terms of section 9 of the South African
     Currency and Exchanges Act, 1933 (“Exchange Control Regulations”). The following is a summary of the
     Exchange Control Regulations, is not comprehensive and is intended as a guide only. In the event that Foreign
     Naspers Shareholders have any doubts in respect of their obligations in terms of the Exchange Control Regulations
     they should consult their professional advisers.
     Emigrants from the common monetary area
     6.1. The Unbundled Novus Shares received by the Foreign Naspers Shareholders who are emigrants from the
          common monetary area and whose registered address is outside the common monetary area will:
           6.1.1.   in the case of Dematerialised Naspers Shareholders be credited to their blocked share accounts at
                    the CSDP controlling their blocked portfolios; or
           6.1.2.   in the case of Certificated Naspers Shareholders whose Documents of Title have been restrictively
                    endorsed under the Exchange Control Regulations, be endorsed “Non-Resident” and will be sent
                    to the authorised dealer in foreign exchange controlling their blocked assets.
     6.2. The CSDP or broker will ensure that all requirements of the Exchange Control Regulations are adhered to in
          respect of their clients falling into this category of investor, whether shares are held in dematerialised or
          certificated form.

     All other non-residents of the common monetary area
     6.3. The Unbundled Novus Shares received by the Naspers Shareholders who are non-residents of the common
          monetary area and who have never resided in the common monetary area and whose registered address
          are outside the common monetary area will:
           6.3.1.   in the case of Dematerialised Naspers Shareholders be credited to their share accounts at the
                    CSDP controlling their portfolios; or
           6.3.2.   in the case of Certificated Naspers Shareholders whose Documents of Title have been restrictively
                    endorsed under the Exchange Control Regulations, be deposited with an Authorised Dealer in
                    foreign exchange in South Africa nominated by such Naspers Shareholder. It will be incumbent on
                    the Naspers Shareholder concerned to nominate the Authorised Dealer and to instruct the
                    nominated Authorised Dealer as to the disposal of the relevant Naspers Shares. If the information
                    regarding the Authorised Dealer is not given, the Unbundled Novus Shares will be held in trust for
                    the Naspers Shareholder concerned pending the receipt of the necessary information or instruction.
     6.4. The CSDP or broker will ensure that all requirements of the Exchange Control Regulations are adhered to in
          respect of their clients falling into this category of investor, whether held in dematerialised or certificated form.

7.   Taxation considerations relating to the Unbundling
     7.1. This paragraph is intended to provide a general guide and is not intended to constitute a complete analysis
          of the taxation consequences of the unbundling provisions in terms of South African taxation law. It is not
          intended to be, nor should it be considered as legal or taxation advice. Naspers and its advisers cannot be
          held responsible for the taxation consequences of the Unbundling and therefore, Naspers Shareholders are
          advised to consult their own taxation advisers in this regard.
     7.2. The Unbundling will constitute a disposal by Naspers of all of the Unbundled Novus Shares to the Naspers
          Shareholders. It is the intention that the disposal will be effected utilising the tax concessions provided for in
          section 46 of the Income Tax Act.
     7.3. The concessions provided for in section 46 of the Income Tax Act are outlined below:
          Disposal of Unbundled Novus Shares by Naspers
          The distribution of Unbundled Novus Shares by Naspers, in terms of the Unbundling, will be disregarded by
          Naspers in determining its taxable income or assessed loss in the tax year that the Unbundling takes place.
          On the basis that Naspers holds the Unbundled Novus Shares as capital assets, the Unbundling should not
          attract capital gains tax as levied in terms of the Eighth Schedule of the Income Tax Act (“CGT”).
          Dividends tax and returns of capital
          In terms of sections 46(5) and 46(5A) of the Income Tax Act, the distribution of the Unbundled Novus Shares
          must be disregarded in determining any liability for dividends tax and must also not be treated as a return of
          capital for the purposes of paragraph 76B of the Eighth Schedule to the Income Tax Act.
          Naspers Shares held as trading stock
          Any Naspers Shareholder holding Naspers Shares as trading stock will be deemed to acquire the Unbundled
          Novus Shares as trading stock. The combined expenditure (for the purposes of income tax) of such Naspers
          Shares and Unbundled Novus Shares will be the amount originally taken into account by the Naspers
          Shareholder prior to the Unbundling in respect of those Naspers Shares, as contemplated in section 11(a),
          section 22(1), or section 22(2) of the Income Tax Act.
          The original expenditure incurred in respect of the Naspers Shares will be apportioned between the
          Unbundled Novus Shares and the Naspers Shares by applying the ratio that the market value of Unbundled
          Novus Shares bear to the sum of the market value of the Unbundled Novus Shares and the Naspers Shares
          at the end of the day after the Unbundling, being determined with reference to Naspers and Novus’ closing
          share prices on the first business day after the LDT Date. Naspers will advise Naspers Shareholders of the
          specified ratio by way of an announcement to be released on SENS on the second business day after the
          LDT Date. This ratio must be used in the determination of any profits or losses derived on any future disposals
          of the Unbundled Novus Shares or Naspers Shares.
          The expenditure so allocated to the Unbundled Novus Shares will reduce the expenditure of the Naspers
          Shares held, thus allocating the expenditure between the Naspers Shares and the Unbundled Novus Shares.
          Naspers Shares held as capital assets
          Any Naspers Shareholder holding Naspers Shares as capital assets will be deemed to acquire the Unbundled
          Novus Shares as capital assets. The original expenditure incurred prior to the Unbundling in respect of the
          Naspers Shares, that is allowable in terms of paragraph 20 of the Eighth Schedule to the Income Tax Act,
          and (where applicable) the CGT valuation of the Naspers Shares, as contemplated in paragraph 29 of the
          Eighth Schedule to the Income Tax Act, will be apportioned between the Unbundled Novus Shares and the
          Naspers Shares by applying the ratio that the market value of Unbundled Novus Shares bears to the sum of
          the market values of the Unbundled Novus Shares and Naspers Shares at the end of the day after the
          Unbundling, being determined with reference to Naspers and Novus’ closing share prices on the first
          business day after the LDT Date. Naspers will advise Naspers Shareholders of the specified ratio by way of
          an announcement to be released on SENS on the second business day after the LDT Date. This ratio must
          be used in the determination of the capital gain or loss derived on any future disposals of the Unbundled
          Novus Shares or Naspers Shares.
          The expenditure (and CGT valuation, where applicable) so allocated to the Unbundled Novus Shares will
          reduce the expenditure (and CGT valuation, where applicable) of the Naspers Shares held, thus allocating
          this cost history between the Naspers Shares and the Unbundled Novus Shares.
          Naspers Shareholders will be deemed to have acquired the Unbundled Novus Shares on the date on which
          the Naspers Shares were originally acquired.

8.   Approvals
     8.1. In terms of the listing requirements of the JSE, where listed assets are unbundled, shareholder approval is
          not required per se. Accordingly, Naspers Shareholders will not be required to vote on the Unbundling.
     8.2. In addition, as the Unbundling does not constitute a section 112 disposal in terms of the Companies Act,
          Naspers Shareholders will not be required to vote on the Unbundling.
9.   Governing law
     The Unbundling will be governed by the laws of South Africa.

10. Salient dates and times

     The salient dates and times relating to the Unbundling are set out in the timetable hereunder:
                                                                                                                2017
      Finalisation announcement expected to be released on SENS, if required                   Tuesday, 12 September
      Expected LDT Date in order to participate in the Unbundling                              Tuesday, 19 September
      Announcement expected to be released on SENS in respect of the cash                      Thursday, 21 September
      payment applicable to fractional entitlements to the Unbundling, based on the
      VWAP of the Unbundled Novus Shares traded on the JSE on Wednesday, 20
      September 2017, discounted by 10%
      Announcement expected to be released on SENS in respect of the specified                 Thursday, 21 September
      ratio apportionment related to the tax consequences of the Unbundling
      Expected Record Date on which Naspers Shareholders must be recorded in                   Friday, 22 September
      Naspers’ share register to participate in the Unbundling
      Expected Operative Date of the Unbundling                                                Tuesday, 26 September
      Naspers Shareholders’ accounts at CSDP or broker expected to be updated                  Tuesday, 26 September
      and credited

     1.   The above dates are subject to amendment. Any material amendments will be released on SENS.

11. Brief overview of Novus
     Detailed information regarding Novus can be found on its website: https://novus.holdings/. For
     information purposes, Naspers has included a brief overview of Novus below from its publically available
     information.
     11.1. Novus is a market leader in the high-volume, high-quality print markets in South Africa, with very few national
           and other African competitors that can offer the same portfolio of products and services.
     11.2. Novus has ten printing plants and one tissue producing plant situated throughout South Africa. With the
           commissioning of a second tissue mill and quality enhancing equipment for the production of jumbo reel
           tissue wadding, Novus is positioned as a growing supplier of this product.
     11.3. Novus’ national network of plants allows it to attract a diverse customer base. Due to its scale, favourable
           terms can be negotiated with suppliers. New entrants to the market face high barriers to entry due to high
           capital investment, specialised skills and experience requirements.
     11.4. Clients benefit from seamless access to volume resources and extensive print and manufacturing capability
           through Novus’ modern operations across the country, providing a single source for all their requirements.
           Through the implementation of faster, more advanced technology and highly efficient, fully automated
           production processes, Novus is able to offer printing and manufacturing of a variety of high-quality products.
     11.5. Summarised key financial results

             31 March financial year-end              Unit                          FY2017                       FY2016

             Revenue                                  R’m                            4,312                        4,175
             EBITDA                                   R’m                              601                          846
             Operating profit                         R’m                              394                          649
             Operating profit excluding               R’m                              529                          651
             impairments and profit/(loss) on
             disposal of assets
             Headline earnings                         R’m                             354                          447
             Headline earnings per share              cents                         110.81                       139.94
             Cash generated from operations            R’m                             662                          720
             Cash conversion ratio                      %                           77.5%                        72.0%
             Total assets                              R’m                           3,697                        3,600
             NAV per share                            cents                         902.17                       883.32
             Dividends per share                      cents                             56                           70

     11.6. Novus’ strategic intent is to market and sell quality product solutions for print, labels and tissue throughout
           South Africa and into Africa.
Cape Town
5 September 2017

Financial advisor and sponsor
Investec Bank Limited

Legal advisors
Glyn Marais Inc.
Werksmans Inc.

Tax advisors
PricewaterhouseCoopers Tax Services Proprietary Limited

Date: 05/09/2017 05:30:00 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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