R&E and JCI resume Merger Talks

1. On 26 August 2008, R&E announced on SENS that the company had not been able to achieve the settlement agreement with JCI as envisaged in the Memorandum of Understanding (MOU) signed by the companies and furthermore, had not been able to effect the proposed merger as contemplated in the joint SENS announcement of 23 April 2007.
2. R&E announced further that, the merger having failed, the dispute between the companies would be referred to arbitration.
3. On 27 August 2008, JCI published a SENS announcement stating that in its view there was no reason why the merger should be aborted and that JCI intended engaging with R&E in regard to the issues raised in R&E’s announcement.
4. Following R&E’s SENS announcement of 26 August 2008, discussions with shareholders and JCI regarding a possible merger were revived. These discussions have progressed to such a stage that R&E no longer feels it necessary to persist with its position as announced on 26 August 2008.
5. On 31 October 2008 R&E renewed its cautionary announcement and indicated that it is engaged in “without prejudice” discussions with JCI regarding the possibility of a merger.
6. The Boards of R&E and JCI have each resolved to proceed with the merger of the companies based on a merger ratio of 1 R&E share in exchange for every 95 JCI shares which is the ratio proposed in the announcement of 23 April 2007.
7. The proposal will be subject to regulatory approval being obtained, the shareholders of R&E and JCI voting in favour thereof, and the scheme of arrangement to be proposed by R&E to JCI shareholders (excluding R&E) being implemented in all respects by 31 March 2009 or such later date as may be agreed between the companies.
7. The successful implementation of the proposed merger will result in:
7.1 R&E becoming the owner of the entire issued share capital of JCI, thereby obtaining control of the underlying business and assets of JCI; and
7.2 the listing of JCI shares on the JSE, being terminated; and
7.3 the current shareholders of R&E and JCI, owning approximately 78% and 22% of the post merger R&E share capital respectively.
8. Shareholders in both companies will be kept abreast of developments as soon as practically possible. Both companies have resubmitted draft documentation to the JSE Limited and Securities Regulation Panel for approval.
9. Accordingly, shareholders in both companies are advised to continue to exercise caution when trading in their shares over the counter.
6th November 2008
Sponsor to R&E
PSG Capital (Pty) Limited
Sponsor to JCI
Sasfin Capital
A division of Sasfin Bank Limited
Date: 06/11/2008 17:45:30 Produced by the JSE SENS Department.
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2008-11-06 17:45:30     Source: JSE News Service (SENS)
Posted in Company Announcements.