South African retail giant Woolworths has cleared another hurdle as it closes in on the David Jones acquisition.
David Jones confirmed today that it has been informed by Woolworths that the South African Reserve Bank has approved the company's proposed acquisition of David Jones by way of the Scheme of Arrangement Proposal.
Accordingly, the condition precedent in clause 3.1(a) of the Scheme Implementation Deed is now satisfied.
As a result, Woolworths has now also released its 'Category 1 Circular' in relation to the proposed acquisition of David Jones under the scheme.
The circular, and accompanying 'Notice of General Meeting', has been released by Woolworths to provide its shareholders with information regarding the transaction.
The circular has also unearthed certain details about the Woolworths/David Jones transaction, including the fact that the $2.35 billion cost of the David Jones acquisition is expected to eclipse the total cash consideration of the takeover of $2.15 billion.
The figure of $2.35 billion to bring the Woolworths/David Jones acquisition to fruition has been mostly attributed to 'funders’ legal fees and consultancy fees' ($15.3 million) and estimated transaction costs, including financing and related costs.
As reported by media today, Rothschild is expected to gain $11 million for its merger and financial advisory work, while Standard Bank of South Africa will get $8 million for advice and transaction sponsorship.
The circular document also includes a request to convene a general meeting of its shareholders to approve both the transaction and certain matters pertaining to implementation of the subsequent equity raising that Woolworths intends to conduct post completion of the transaction.
The Woolworths shareholder meeting is due to be held in South Africa on Tuesday, June 17, 2014.
The circular has been prepared for Woolworths shareholders only and David Jones shareholders will not need to take any action in relation to it.
The David Jones board continues to unanimously recommend that David Jones shareholders vote in
favour of the scheme at the upcoming scheme meeting, in the absence of a superior proposal and subject to an independent expert concluding that the scheme is fair and reasonable.
A scheme booklet, providing full details of the Woolworths proposal (including reasons to vote in favour or against the scheme, and an independent expert report and details on how to vote will be mailed to David Jones shareholders in late May 2014.
The scheme meeting, at which David Jones shareholders can vote on the scheme, is expected to be held in late June 2014.