Remgro (REM) Investor Update summary

Regulatory and Transaction Update

• Competition Commission no longer opposes the transaction after enhanced commitments addressing investment, overlap, and vertical foreclosure concerns, including a pledge to build 1 million homes and invest ZAR 10–12 billion over 5–6 years.

• Appeals Court hearing is scheduled, with a decision expected within two months; ICASA approval is pending but not seen as a major hurdle.

• BEE shielding will remain above 30%, meeting ICASA licensing requirements, and public interest commitments have been strengthened, including free fibre for public institutions and expanded enterprise development.

• Competition Tribunal initially prohibited the transaction; merging parties appealed, with a final ruling expected by 22 July 2025.

• Key risks include reduced competition in FWA and FTTH, potential price increases, and vertical foreclosure, with remedies such as divestiture arrangements and transparent purchaser selection.

Transaction Structure and Terms

• Maziv is valued at ZAR 36 billion, including Herotel; Vodacom will invest ZAR 6.11 billion in cash and ZAR 4.89 billion in assets.

• A pre-implementation dividend of up to ZAR 4.2 billion may be declared, subject to debt/EBITDA falling below 3x.

• Vodacom's maximum shareholding in Maziv is capped at 34.95%, with Remgro diluting its stake to facilitate this.

• Herotel's remaining 49.93% stake will be acquired at a minimum of ZAR 2.75 billion, with final value based on an independent market valuation.

• After the second Herotel transaction, Maziv's equity valuation is ZAR 38.75 billion, with an enterprise value of ZAR 59.6 billion and an EBITDA multiple of 11.49.

Financial Implications and Cash Flows

• Remgro expects to receive 57% of the ZAR 4.5 billion dividend, with potential for additional proceeds from the Herotel transaction.

• CIVH will use proceeds to reduce preference share debt and retain some cash for future opportunities.

• The transaction is expected to improve profitability at the Remgro level due to capital injection and reduced debt.

• The implied EV/EBITDA multiple for the transaction is approximately 11.5x, based on trailing twelve-month numbers to March 2025.

• Illustrative cash flows show a pre-implementation dividend of up to ZAR 4.2 billion to CIVH, with subsequent equity value adjustments.