SHF - Steinhoff - Termination of Discussions with Amap

SHF - Steinhoff - Termination of Discussions with Amap                          
STEINHOFF INTERNATIONAL HOLDINGS LIMITED                                        
(Incorporated in the Republic of South Africa)                                  
(Registration Number 1998/003951/06)                                            
Share code:  SHF & ISIN:  ZAE000016176                                          
("Steinhoff")                                                                   
TERMINATION OF DISCUSSIONS REGARDING THE MERGER OF THE SOUTH AFRICAN            
FURNITURE INTERESTS OF STEINHOFF AFRICA HOLDINGS (PROPRIETARY) LIMITED          
("Steinhoff Africa") WITH THE BUSINESS OF AMALGAMATED APPLIANCE HOLDINGS        
LIMITED ("Amap")                                                                
1.   BACKGROUND                                                                 
1.1  Steinhoff shareholders are referred to announcements released on       
         14 December 2006 and 5 March 2007 wherein it was announced that        
         agreement in principle had been reached to merge the furniture         
         interests of Steinhoff Africa ("the Steinfurn business") with the      
business of Amap ("the merger"). Steinhoff shareholders are            
         further referred to the announcement released to Amap                  
         shareholders today, 12 April 2007.                                     
    1.2  In terms of the merger, Steinhoff Africa, subject to certain           
conditions precedent, would have disposed of the Steinfurn             
         business to Amap for a consideration of R1 152 million ("the           
         merger consideration"), to be settled via a combination of cash        
         and the issue of ordinary shares in Amap ("the Amap consideration      
shares").                                                              
    1.3  The values for Amap and the Steinfurn business were calculated on      
         a relative basis applying similar ratings and valuation metrics        
         to both Amap and the Steinfurn business. These valuations (based       
on a historic price: earnings multiple of approximately 8 times)       
         were supported by the preliminary fair and reasonable opinion of       
         an independent professional expert to the independent directors        
         of Amap.                                                               
2.   TERMINATION OF MERGER DISCUSSIONS                                          
    2.1  On 11 April 2007 Amap informed Steinhoff Africa that two of its        
         major shareholders (which collectively hold a substantial              
         interest in Amap`s issued share capital) ("the opposing                
shareholders") have advised that, whilst they support the              
         rationale for the merger, they are not in agreement with the           
         relative valuation metrics of the merger.  The opposing                
         shareholders indicated that they would only support the merger         
should the Steinfurn business be valued at a substantial discount      
         to Amap.                                                               
    2.2  The merger would have comprised a related party transaction in         
         terms of the Listings Requirements of the JSE Limited in respect       
of which Steinhoff Africa would not have been permitted to vote.       
         The approval of the Amap opposing shareholders would therefore         
         have been a necessity in order to implement the relevant ordinary      
         and special resolutions pertaining to the merger.                      
2.3  The board of directors of Steinhoff Africa are of the opinion          
         that valuing Steinfurn at a discount to Amap does not fairly           
         reflect the value of Steinfurn and is thus not in the best             
         interest of Steinhoff and its shareholders.  This view is              
endorsed by offers from certain private equity groups, who have        
         approached Steinhoff Africa subsequent to the initial                  
         announcement of the merger.  These offers value Steinfurn, as a        
         standalone business, at a significant premium to the merger            
consideration.                                                         
         Accordingly, due to the likelihood of the conditions precedent to      
         which the merger would have been subject not all being fulfilled,      
         Steinhoff Africa and Amap have decided to terminate all                
proceedings in regards to the merger.                                  
    2.4  Steinhoff shareholders are hereby advised that, in view of the         
         merger proceedings being terminated, the directors of Steinhoff        
         and Steinhoff Africa have accordingly entered into negotiations        
with a view to selling the Steinfurn business to a consortium of       
         private equity investors.  The envisaged transaction will include      
         the participation of management and the facilitation of                
         meaningful BEE.                                                        
Johannesburg                                                                    
12 April 2007                                                                   
Sponsor                                                                         
PSG Capital                                                                     
Date: 12/04/2007 12:40:48 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department.