CPI PSG
 
PSG/CPI - PSG Group Limited/Capitec - Firm Intention In Accordance With SRP
 
Requirements To Make A Mandatory Offer To Capitec Shareholders
 
PSG Group Limited
 
(Incorporated in the Republic of South Africa)
 
Registration Number: 1970/008484/06
 
Share Code: PSG
 
ISIN Code: ZAE000013017
 
("PSG")
 
Capitec Bank Holdings Limited
 
(Incorporated in the Republic of South Africa)
 
Registration Number: 1999/025903/06
 
Share Code: CPI
 
ISIN Code: ZAE000035861
 
("Capitec")
 
FIRM INTENTION IN ACCORDANCE WITH SRP REQUIREMENTS TO MAKE A MANDATORY OFFER TO
 
CAPITEC SHAREHOLDERS
 
1. INTRODUCTION
 
Capitec shareholders are hereby advised that the Capitec board of directors
 
has received notice from PSG of a firm intent to make a mandatory offer to
 
all Capitec shareholders to acquire all Capitec ordinary shares not held by
 
PSG, on terms and conditions, the salient features of which are set out
 
below ("the Mandatory Offer"). The mandatory offer is in compliance with
 
the requirements of the Securities Regulation Code on Takeovers and Mergers
 
and the Rules of the Securities Regulation Panel ("SRP"), ("the Code").
 
2. BACKGROUND TO THE MANDATORY OFFER
 
On 14 May 2007, PSG extended a voluntary offer to all Capitec shareholders
 
to acquire up to 34.9% of the ordinary issued share capital of Capitec
 
("the Original PSG Offer"). The Original PSG Offer was a share for share
 
transaction whereby Capitec shareholders that accepted the Original PSG
 
Offer received 1.4545 PSG shares for every 1 Capitec share disposed of by
 
Capitec shareholders. Pursuant to the Original PSG Offer, PSG increased its
 
shareholding in Capitec to 34.9%.
 
In terms of the Code, a shareholder (in this case PSG) is required to make
 
a mandatory offer to all remaining shareholders of an offeree company in
 
the event that the said shareholder, together with any persons acting in
 
concert with such shareholder, acquires control of the company. Control is
 
defined as 35% or more of the voting rights of the offeree company ("the
 
35% Threshold"). In addition, the Code stipulates that, unless the
 
contrary is established, a company shall be deemed to be acting in concert
 
with any of its directors who hold shares in the offeree company.
 
It has recently come to PSG's attention that, as a result of the non-
 
beneficial shareholding in Capitec held by a director of PSG and as a
 
result of the aforementioned deeming provision of the Code, PSG is deemed
 
to have crossed the 35% Threshold when it implemented the Original PSG
 
offer. PSG, after consulting with the SRP on the appropriate action to be
 
taken, has been advised by the SRP that it is required to make a mandatory
 
offer to all Capitec shareholders at the same offer consideration as was
 
applied to the Original PSG Offer, save for adjusting the aforementioned
 
consideration to take into account dividends that were paid by both Capitec
 
and PSG to their ordinary shareholders after implementation of the Original
 
PSG Offer.
 
Given that the Capitec share price has increased substantially compared to
 
the PSG share price in the period between the Original PSG Offer and the
 
date hereof, the PSG and Capitec boards are of the view that the Mandatory
 
Offer is neither fair nor reasonable to Capitec shareholders. Capitec will
 
however obtain a fairness opinion prepared by an independent party, that
 
will be included in the Mandatory Offer circular.
 
At the time of the Original PSG Offer, the South African Reserve Bank
 
granted PSG approval to increase its shareholding in Capitec to 49%. In
 
this regard PSG will obtain irrevocable undertakings from material Capitec
 
shareholders to ensure that the maximum number of shares that PSG could
 
obtain in terms of the Mandatory Offer will be limited to 49% of the
 
ordinary issued share capital of Capitec.
 
3. TERMS OF THE MANDATORY OFFER
 
PSG owns, directly and indirectly, together with the director concerned, in
 
excess of 35% of the ordinary issued share capital of Capitec and as such
 
is required to make the Mandatory Offer to acquire all Capitec shares not
 
held by PSG from all Capitec shareholders. The salient terms of the
 
Mandatory Offer are set out below:
 
3.1 The Offer Consideration
 
3.1.1 Capitec shareholders that accept the Mandatory Offer shall
 
receive 1.5767 PSG shares for every 1 Capitec share disposed of
 
in terms of the Mandatory Offer.
 
3.1.2 For the avoidance of doubt, it is recorded that Capitec shares
 
acquired in terms of the Mandatory Offer will be "ex" dividend.
 
Similarly, any PSG shares issued as offer consideration will be
 
issued "ex" dividend.
 
3.2 The Offer Period
 
The Offer will be open for acceptance from 09:00 on Monday, 21 December
 
2009 and will close at 12:00 on Friday, 15 January 2010 ("the Closing
 
Date"). The last day to trade Capitec shares in order to participate in the
 
Offer is Friday, 8 January 2010. Shares in Capitec will trade "ex" the
 
right to participate in the Offer from Monday, 11 January 2010. The record
 
date for the Offer is Friday, 15 January 2010. The offer consideration will
 
be credited to the accounts of dematerialised Capitec shareholders that
 
accept the Offer, at their CSDP or broker (as the case may be) on Monday,
 
18 January 2010. The offer consideration will be posted to certificated
 
Capitec shareholders that accept the Offer on or about Tuesday, 19 January
 
2010.
 
3.3 Conditions Precedent
 
In the event that PSG is required to issue more than 5% of its issued share
 
capital as at 28 February 2009 to Capitec shareholders that accept the
 
Mandatory Offer, same will become conditional on PSG shareholder approval.
 
3.4 Opinion and recommendation
 
As set out above, PSG makes the Mandatory Offer in order to comply with
 
the Code and is required to do so at the same offer consideration as was
 
applied to the Original PSG Offer, save for adjusting to take into account
 
dividends that were paid by both Capitec and PSG to their ordinary
 
shareholders after implementation of the Original PSG Offer. Given that
 
the Capitec share price has increased substantially compared to the PSG
 
share price in the period between the Original PSG Offer and the date
 
hereof, neither the PSG nor the Capitec board regards the Mandatory Offer
 
as being fair or reasonable to Capitec shareholders.
 
The circular that will be sent to Capitec shareholders shall contain a
 
fairness opinion prepared by an independent party to enable Capitec
 
shareholders to make an informed decision regarding the Mandatory Offer.
 
4. CIRCULAR TO CAPITEC SHAREHOLDERS
 
A circular, subject to approval thereof by the SRP, containing full details
 
of the Mandatory Offer will be posted to Capitec shareholders on or about
 
Monday, 21 December 2009.
 
By order of the Capitec Board By order of the PSG Board
 
Stellenbosch Stellenbosch
 
7 December 2009 7 December 2009
 
Sponsor
 
PSG Capital (Pty) Limited
 
Date: 07/12/2009 16:30:01 Produced by the JSE SENS Department.
 
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