THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are a holder of Johnnic Holdings Limited ( Johnnic ) ordinary shares ( Johnnic shares ) ( Johnnic shareholder ) and are in any doubt as to the action you should take arising from this circular, please consult your Central Securities Depository Participant ( CSDP ), broker, banker, attorney, accountant or other professional advisor immediately. If you have disposed of all your Johnnic shares, this circular should be handed to the purchaser of such Johnnic shares or to the CSDP, broker, banker, attorney, or other agent through whom such disposal was effected. Action required If you have already accepted the offer (the offer ) by Mercanto Investments (Proprietary) Limited ( Mercanto ), a wholly-owned subsidiary of Hosken Consolidated Investments Limited ( HCI ), set out in the circular dated Monday 21 July 2008 (the offer circular ), then this circular is for information purposes only and you need not take any further action. If you are a certificated Johnnic shareholder and have not yet surrendered your documents of title (in negotiable form) in relation to your Johnnic shares, please do so prior to 12:00 on Friday, 15 August 2008 (the closing date ). Certificated Johnnic shareholders who accept the offer prior to the closing date are referred to the offer circular and the announcement released on the Securities Exchange News Service ( SENS ) on Wednesday, 23 July 2008 and published in the South African press on Thursday, 24 July 2008 for further information relating to the offer consideration and settlement thereof. If you are a dematerialised Johnnic shareholder and have not yet surrendered your Johnnic shares, please notify your CSDP or broker, as the case may be, to surrender your Johnnic shares in the manner and time stipulated in the agreement entered into between you and your CSDP or broker, as the case may be. Dematerialised Johnnic shareholders who accept the offer prior to the closing date are referred to the offer circular and the announcement released on SENS on Wednesday, 23 July 2008 and published in the South African press on Thursday, 24 July 2008 for further information relating to the offer consideration and settlement thereof. Hosken Consolidated Investments Limited Johnnic Holdings Limited (Registration number 1973/007111/06) (Registration number 1889/000429/06) (Share code: HCI ISIN: ZAE000003257) (Share code: JNC ISIN: ZAE000024352) ( HCI ) ( Johnnic ) Circular to the Johnnic shareholders who have not accepted the offer by Mercanto, a wholly-owned subsidiary of HCI, to acquire their Johnnic shares; regarding HCI s intention to acquire, through Mercanto, all of their Johnnic shares in terms of section 440K(1) of the Companies Act, 1973 (Act 61 of 1973), as amended ( Companies Act ) (the proposed transaction ); and incorporating a notice by Mercanto in terms of section 440K(1) of the Companies Act. Investment bank to the proposed transaction Sponsor to HCI and Johnnic Attorneys to HCI Independent advisor to Johnnic Attorneys to Johnnic Corporate Finance Division Deloitte & Touche Registered Auditors Date of issue: Monday, 4 August 2008
CORPORATE INFORMATION AND ADVISORS Directors of Mercanto M J A Golding J A Copelyn Directors of HCI M J A Golding (Executive chairman) J A Copelyn (Chief Executive Officer) A van der Veen (Executive director) V E Mphande (Executive director) J A Mabuza (Executive director) V M Engel (Non-executive director) M F Magugu (Non-executive director) A M Ntuli (Non-executive director) J Ngcobo (Non-executive director) M L Molefi (Non-executive director) Y Shaik (Non-executive director) R S Garach (Non-executive director) Secretary and registered office of HCI T G Govender Block B, Longkloof Studios Darters Road Gardens Cape Town, 8001 (PO Box 5251, Cape Town, 8000) Transfer secretaries to HCI and Johnnic Computershare Investor Services (Proprietary) Limited (Registration number 2004/003647/07) 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) Investment bank to the proposed transaction Investec Bank Limited (Registration number 1969/004763/06) 100 Grayston Drive Sandton, 2196 (PO Box 785700, Sandton, 2146) Attorneys to HCI Edward Nathan Sonnenbergs Inc. 1 North Wharf Square Loop Street Foreshore Cape Town, 8001 (PO Box 2293, Cape Town, 8000) Directors of Johnnic M J A Golding (Chairman) A van der Veen (Chief Executive Officer) S A Queen (Chief Financial Officer) R K Jackson (Executive director) J A Copelyn (Non-executive director) V E Mphande (Non-executive director) M F Magugu (Non-executive director) L W Maasdorp (Non-executive director) R S Garach (Non-executive director) Secretary and registered office of Johnnic HCI Managerial Services (Proprietary) Limited (Registration number 1996/017874/07) Block B, Longkloof Studios Darters Road Gardens Cape Town, 8001 (PO Box 5251, Cape Town, 8000) Sponsor to HCI and Johnnic Investec Bank Limited (Registration number 1969/004763/06) 100 Grayston Drive Sandton, 2196 (PO Box 785700, Sandton, 2146) Independent advisor to Johnnic Deloitte & Touche Corporate Finance Division Deloitte & Touche, Deloitte Place The Woodlands, Woodlands Drive Woodmead Sandton, 2196 (Private Bag X6, Gallo Manor, 2052) Attorneys to Johnnic Webber Wentzel 10 Fricker Road Illovo Boulevard Sandton, 2196 (PO Box 61771, Marshalltown, 2107) 1
IMPORTANT DATES AND TIMES 2008 Notice given in terms of section 440K(1) of the Companies Act on Monday, 4 August Listing of Johnnic shares suspended on the JSE Limited ( JSE ) with effect from the commencement of trade Tuesday, 5 August Last day to trade in order for Johnnic shareholders to participate in the offer Friday, 8 August Johnnic shares trade ex the right to participate in the offer Monday, 11 August Offer consideration settlement date in respect of firm acceptances of the offer received before 12:00 on Friday, 8 August 2008 Monday, 11 August Record date on which Johnnic shareholders must be recorded in the register in order to participate in the offer Friday, 15 August Closing date of the offer at 12:00 on Friday, 15 August Offer consideration settlement date in respect of firm acceptances of the offer received before 12:00 on Friday, 15 August 2008 Monday, 18 August Last day to apply to the High Court of South Africa ( Court ) in terms of section 440K(1) of the Companies Act Monday, 15 September Compulsory acquisition of the Johnnic shares held by the remaining Johnnic shareholders who have not accepted the offer contained in the offer circular becomes effective on the commencement of business Tuesday, 16 September Date of payment of the consideration to: Within seven calendar days of the later of (i) Johnnic in respect of Johnnic certificated shareholders; 4 and the expiry of the notice or the dismissal (ii) dematerialised Johnnic shareholders accounts of any application to the Court made in who have not accepted the offer contained in the offer circular terms of section 440K(1) of the Companies Act (or if not a business day, the next business day) Termination of the listing of Johnnic ordinary shares on the JSE from the commencement of trade Wednesday, 24 September Notes: 1. The above dates and times are subject to amendment, subject to prior written approval from the Securities Regulation Panel being obtained, at the discretion of HCI and/or Johnnic. Any such amendment will be released on SENS and published in the South African press. 2. There will be no dematerialisation or rematerialisation of Johnnic shares after the notice to invoke section 440K(1) of the Companies Act has been announced on Monday, 4 August 2008. 3. All times indicated above are South African times. 4. The cash consideration in respect of certificated Johnnic shareholders will be paid to Johnnic (to be held in trust by Johnnic for and on behalf of such certificated Johnnic shareholders) within seven days of the later of the expiry of the notice or the dismissal of any application to the Court made in terms of section 440K(1) of the Companies Act and after such payment and submission of such instruments of transfer by Mercanto, their Johnnic shares will be transferred to Mercanto. If you are a certificated Johnnic shareholder and wish to claim your entitlement to the cash consideration, you must lodge with or deliver your documents of title to the transfer secretaries of Johnnic, Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001, (PO Box 61763, Marshalltown, 2107) and/or provide the transfer secretaries of Johnnic with an indemnity on terms acceptable to the transfer secretaries of Johnnic in respect of such consideration, prior to the payment of the consideration. Certificated Johnnic shareholders are requested to provide the following banking details (name of bank, branch name, branch code, account number) to the transfer secretaries of Johnnic as the cash consideration will be settled via an electronic cash payment. In respect of the dematerialised Johnnic shares, the relevant CSDP or broker will arrange for the dematerialised Johnnic shareholders accounts to be credited with the cash consideration which will be paid by Mercanto within seven days of the later of the expiry of the notice or the dismissal of any application to Court made in terms of section 440K(1) of the Companies Act, in the manner and time stipulated in the agreement entered into between such dematerialised Johnnic shareholder and their CSDP or broker. 2
Hosken Consolidated Investments Limited Johnnic Holdings Limited (Registration number 1973/007111/06) (Registration number 1889/000429/06) (Share code: HCI ISIN: ZAE000003257) (Share code: JNC ISIN: ZAE000024352) ( HCI ) ( Johnnic ) CIRCULAR TO JOHNNIC SHAREHOLDERS 1. THE OFFER As set out in the offer circular to Johnnic shareholders dated Monday, 21 July 2008 (the offer circular ), Mercanto Investments (Proprietary) Limited ( Mercanto ), a wholly-owned subsidiary of HCI, made an offer to acquire all of the Johnnic shares in issue, other than those already held by HCI and its subsidiaries (the HCI group ) ( offer shares ), for one of the following settlement alternatives of the offer consideration ( offer consideration ): the cash consideration ( cash consideration ), being an amount equal to R16.75 per Johnnic share, settled in cash; or the combined share and partial cash consideration ( combined share and partial cash consideration ), settled as follows: 0.02085 HCI ordinary shares per Johnnic share; plus R15.11 in cash per Johnnic share. The offer circular stipulated that, in the event that Mercanto, a wholly-owned subsidiary of HCI, becomes entitled to and elects to invoke section 440K(1) of the Companies Act, Johnnic shareholders who did not accept the offer prior to the closing date will receive the cash consideration only. Johnnic shareholders who accept the offer prior to the closing date will still have the option to elect either the cash consideration or the combined share and partial cash consideration (the offer ). 2. RESULTS OF THE OFFER On Wednesday, 30 July 2008, being the last practicable date of this circular, Mercanto had received acceptances from Johnnic shareholders in respect of approximately 52 100 460 Johnnic shares, equating to 94.9% of the offer shares. As the offer has been accepted by Johnnic shareholders holding more than nine-tenths of the offer shares, Mercanto will invoke the provisions of section 440K(1) of the Companies Act to compulsorily acquire all the Johnnic shares in respect of which the offer has not been accepted. The listing of Johnnic shares on the JSE and Johnnic American Depositary Receipts will be terminated and Johnnic will become a wholly-owned subsidiary of the HCI group. The relevant provisions of section 440K(1) of the Companies Act are included in Annexure 1 to this circular. 3. NOTICE OF COMPULSORY ACQUISITION If you are reflected in the register of Johnnic as a Johnnic shareholder, who, as at the closing date has not accepted the offer in respect of your holdings of Johnnic shares, you are referred to the notice, issued by Mercanto in terms of section 440K(1) of the Companies Act and attached to this circular (the notice ).The compulsory acquisition of your Johnnic shares will become effective upon the later of the expiration of six weeks after the date of the notice, being Monday, 15 September 2008, or the dismissal by the Court of an application, if any, made in terms of section 440K(1) of the Companies Act by any Johnnic shareholder who, prior to the closing date, had not accepted the offer ( effective date ). 3
In terms of section 440K(1) of the Companies Act, Mercanto intends to compulsorily acquire all the Johnnic shares in respect of which the offer has not been accepted (the remaining Johnnic shares ) for the cash consideration. Johnnic shareholders will only be entitled to receive the cash consideration in respect of the remaining Johnnic shares. By order of the HCI board By order of the Johnnic board J A Copelyn Director A van der Veen Director 4 August 2008 4 August 2008 Registered office Registered office Block B, Longkloof Studios Block B, Longkloof Studios Darters Road Darters Road Gardens Gardens Cape Town, 8001 Cape Town, 8001 (PO Box 5251, Cape Town, 8000) (PO Box 5251, Cape Town, 8000) 4
Hosken Consolidated Investments Limited (Registration number 1973/007111/06) (Share code: HCI ISIN: ZAE000003257) ( HCI ) NOTICE IN TERMS OF SECTION 440K(1) OF THE COMPANIES ACT, NO. 61 OF 1973, AS AMENDED (THE COMPANIES ACT ), TO SHAREHOLDERS OF JOHNNIC HOLDINGS LIMITED ( JOHNNIC ) ( JOHNNIC SHAREHOLDERS ) WHO HAVE NOT ACCEPTED THE OFFER BY MERCANTO INVESTMENTS (PROPRIETARY) LIMITED ( MERCANTO ), A WHOLLY-OWNED SUBSIDIARY OF HOSKEN CONSOLIDATED INVESTMENTS LIMITED ( HCI ), TO ACQUIRE ALL THEIR JOHNNIC ORDINARY SHARES ( JOHNNIC SHARES ) 1. In terms of the offer circular to Johnnic shareholders dated Monday, 21 July 2008 (the offer circular ), HCI, through Mercanto, made an offer to acquire all of the Johnnic shares in issue, other than those already held by HCI and its subsidiaries (the HCI group ) ( offer shares ), for one of the following settlement alternatives of offer consideration ( offer consideration ): the cash consideration ( cash consideration ), being an amount equal to R16.75 per Johnnic share, settled in cash; or the combined share and partial cash consideration ( combined share and partial cash consideration ), settled as follows: 0.02085 HCI ordinary shares per Johnnic share; plus R15.11 in cash per Johnnic share. The offer circular stipulated that, in the event that Mercanto becomes entitled to and elects to invoke section 440K(1) of the Companies Act, Johnnic shareholders who did not accept the offer prior to the closing date of the offer, being 12:00 on Friday, 15 August 2008 ( closing date ), will receive the cash consideration only. Johnnic shareholders who accept the offer prior to the closing date will still have the option to elect either the cash consideration or the combined share and partial cash consideration (the offer ). 2. On Wednesday, 30 July 2008, being the last practicable date of this circular, Mercanto had received acceptances from Johnnic shareholders in respect of approximately 52 100 460 Johnnic shares, equating to 94.9% of the offer shares. 3. In terms of section 440K(1) of the Companies Act, Mercanto intends to compulsorily acquire all the Johnnic shares in respect of which the offer has not been accepted ( the remaining Johnnic shares ) for the cash consideration. 4. The letter addressed to holders of the remaining Johnnic shares ( remaining Johnnic shareholders ) and which was sent with this circular, forms part of this circular in general and this notice in particular in terms of section 440K(1) of the Companies Act. 5. Notice is accordingly given in terms of section 440K(1) of the Companies Act to the remaining Johnnic shareholders that Mercanto intends to compulsorily acquire the remaining Johnnic shares.the relevant provisions of section 440K(1) of the Companies Act are set out in Annexure 1 to this circular. 6. The remaining Johnnic shareholders are hereby advised that they are entitled to make application to the High Court of South Africa ( Court ) in terms of the said section 440K(1) of the Companies Act within six weeks after the date of this notice, being Monday, 15 September 2008, seeking an Order in terms of that section. 7. Upon expiration of six weeks from the date of this notice, if no application has been made to Court, or if such application has been made and the application is dismissed, or if such application is pending, then after it has been dismissed, as the case may be, Mercanto shall be entitled and bound to compulsorily acquire from the remaining 5
Johnnic shareholders their remaining Johnnic shares in accordance with the provisions of section 440K(1) of the Companies Act on the terms and conditions set out in the offer circular. Accordingly, at that time, in respect of the certificated Johnnic shares, instruments of transfer signed by Mercanto will be submitted to Johnnic in terms of section 440K(2) of the Companies Act, and in respect of the dematerialised Johnnic shares, the relevant CSDP or broker will compulsorily surrender the dematerialised Johnnic shares and all the shares of the remaining Johnnic shareholders, which will be transferred to Mercanto. 8. The cash consideration in respect of certificated Johnnic shareholders will be paid to Johnnic (to be held in trust by Johnnic for and on behalf of such certificated Johnnic shareholders) within seven days of the later of the expiry of the notice or the dismissal of any application to the Court made in terms of section 440K(1) of the Companies Act and after such payment and submission of such instruments of transfer by Mercanto, their Johnnic shares will be transferred to Mercanto. If you are a certificated Johnnic shareholder and wish to claim your entitlement to the cash consideration, you must lodge with or deliver your documents of title to the transfer secretaries of Johnnic, Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001, (PO Box 61763, Marshalltown, 2107) and/or provide the transfer secretaries of Johnnic with an indemnity on terms acceptable to the transfer secretaries of Johnnic in respect of such consideration, prior to the payment of the consideration. Certificated Johnnic shareholders are requested to provide the following banking details (name of bank, branch name, branch code, account number) to the transfer secretaries of Johnnic as the cash consideration will be settled via an electronic cash payment. In respect of the dematerialised Johnnic shares, the relevant CSDP or broker will arrange for the dematerialised Johnnic shareholders accounts to be credited with the cash consideration which will be paid by Mercanto within seven days of the later of the expiry of the notice or the dismissal of any application to Court made in terms of section 440K(1) of the Companies Act, in the manner and time stipulated in the agreement entered into between such dematerialised Johnnic shareholder and their CSDP or broker. By order of the board HOSKEN CONSOLIDATED INVESTMENTS LIMITED J A Copelyn Director Cape Town 4 August 2008 6
ANNEXURE 1 PROVISIONS OF SECTION 440K OF THE COMPANIES ACT 440K. COMPULSORY ACQUISITION OF SECURITIES OF MINORITY IN AFFECTED TRANSACTION (1) (a) If an offer for the acquisition of securities under an affected transaction involving the transfer of securities or any class of securities of a company to an offeror, has within four months after the date of the making of such offer been accepted by the holders of not less than nine-tenths of the securities or any class of securities whose transfer is involved (other than securities already held at the date of the issue of the offer by, or by a nominee for, the offeror or its subsidiary), the offeror may at any time within two months after the date of such acceptance give notice in the prescribed manner to any holder of such securities who has not accepted the said offer, that he or it desires to acquire his or its securities, and where such notice is given, the offeror shall be entitled and bound to acquire those securities on the terms on which under the affected transaction the securities of the holders who have accepted the offer, were or are to be transferred to the offeror, unless on an application made by such holder within six weeks from the date on which the notice was given, the Court: (i) orders that the offeror shall not be so entitled and bound; or (ii) imposes conditions of acquisition different from those of the offer. (b) If the said offer has not been accepted to the extent necessary for entitling the offeror to give notice under subsection (1)(a), the Court may, on application by the offeror, issue an order authorising him to give notice under that sub-section if the Court is satisfied that: (i) the offeror has after reasonable enquiry been unable to trace one or more of the persons holding securities to which the offer relates; (ii) the securities whose transfer is involved, by virtue of acceptances of the offer, together with the securities held by the person or persons referred to in sub-paragraph (i), amount to not less than the minimum specified in sub-section (1)(a); and (iii) the consideration offered is fair and reasonable, but the Court shall not issue an order under this paragraph unless it considers that it is just and equitable to do so having regard, in particular, to the number of holders of securities who have been traced but who have not accepted the offer. (2) Where a notice has been given by the offeror under sub-section (1) and the Court, on an application made by a holder of the securities who has not accepted the offer, has not ordered as contemplated in sub-section (1)(a), the offeror shall, on the expiration of six weeks from the date on which the notice was given, or, if an application to the Court by such holder is then pending, after the application has been disposed of, transmit a copy of the notice to the offeree company, together with an instrument of transfer executed on behalf of such holder by any person appointed by the offeror, and pay or transfer to the offeree company the amount or other consideration representing the price payable by the offeror for the securities which by virtue of this Section he or it is entitled to acquire, and subject to the payment of the stamp duties ordinarily payable, the offeree company shall thereupon register the offeror as the holder of those securities: Provided that an instrument of transfer shall not be required for any security for which a share warrant is for the time being outstanding. (3) Where, in pursuance of an affected transaction referred to in sub-section (1), securities of an offeree company were or are to be transferred to a person and those securities, together with any other securities of the said offeree company held by, or by a nominee for, the offeror or its subsidiary at the date of the acceptance of the offer in question, comprise or include nine-tenths of the securities in the offeree company or of any class of those securities, then: (a) the offeror shall within a month from the date of such acceptance (unless he or it has already complied with this requirement under sub-section (1)) give notice of that fact in the prescribed manner to the holders of the remaining securities or of the remaining securities of that class, as the case may be, who have not accepted the offer under the affected transaction in question; and (b) any such holder may within three months from the giving of the notice to him require the offeror to acquire the securities in question, 7
and where the holder gives notice under paragraph (b) in relation to any securities, the offeror shall be entitled and bound to acquire those securities on the conditions on which under the affected transaction the securities of the holders who have accepted the offer were or are to be transferred to him or it, or on such other conditions as may be agreed upon or as the Court on the application of either the offeror or the holder may think fit to order. (4) Any sum, and any dividend or other sum accruing from any other consideration, received by the offeree company under this section shall be paid into a separate bank account with a banking institution registered under the Banks Act, 1965 (Act No. 23 of 1965), and any such sums, dividend or any other consideration so received shall be held in trust by the offeree company for the person entitled to the securities in respect of which the said sums, dividend or other consideration was received. (5) In this section any reference to a holder of securities who has not accepted the offer includes any holder who has failed or refused to transfer his securities to the offeror in accordance with the affected transaction. 8 PRINTED BY INCE (PTY) LTD W2CP05980