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FINBOND GROUP LIMITED - Firm Intention Announcement by RVF to make a Mandatory Offer

Release Date: 26/05/2017 17:50
Code(s): FGL     PDF:  
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Firm Intention Announcement by RVF to make a  Mandatory Offer

 Finbond Group Limited                  Riskowitz Value Fund LP
 (Incorporated in the Republic (Formed in the State of Delaware
 of South Africa)                       in the United States of America)
 (Registration number                   (Registration number 4797702)
 2001/015761/06)                        (“RVF”)
 (JSE share code: FGL)
 (ISIN: ZAE000138095)
 (“Finbond” or “the Company”)




FIRM INTENTION ANNOUNCEMENT BY RVF TO MAKE A MANDATORY OFFER


1.   INTRODUCTION

     Shareholders of Finbond (Finbond Shareholders) are referred
     to the announcement released by Finbond on the stock exchange
     news service of the JSE Limited (SENS) on 7 April 2017
     stating that holders of ordinary shares in the Company are
     advised that RVF and Conduit Capital Limited (Conduit
     Capital) have acquired a beneficial interest in ordinary
     shares of the Company, such that their beneficial interests
     of the securities of the Company amounts to 36.8% of the
     total number of shares in issue.

     Finbond Shareholders are also referred to the announcement
     released by RVF and Conduit Capital Limited on SENS on the
     same day, stating that pursuant to an acquisition of
     beneficial interests in ordinary shares in Finbond
     (Acquisition), RVF, Conduit Capital, Protea Asset Management
     LLC and Ithuba Investments LP (Concert Parties) are able to
     exercise more than 35% (thirty five per cent) of the voting
     rights attached to the issued ordinary shares in Finbond
     (Finbond Shares)

     The Acquisition gives rise to an obligation to make a
     mandatory offer in terms of section 123 of the Companies Act
     read with Chapter 5 of the Companies Regulations, 2011
     (Companies Regulations).

     The purpose of this announcement is to advise Finbond
     Shareholders of the terms and conditions of the mandatory
     offer referred to above, in compliance with Regulation 101
     of Chapter 5 of the Companies Regulations.

2.   THE OFFER

       Terms of the Offer

       RVF will make a mandatory offer (Offer) to acquire all the
       issued Finbond Shares other than those beneficially owned
       by:

           -    RVF and the other Concert Parties;

           -    Finbond Chief Executive Officer, Dr Willie van Aardt,
                through Kings Reign Investments Proprietary Limited;

           -    Net1 Finance Holdings Proprietary Limited and its
                affiliates;

           -    Buckley Capital Management, LLC; and

           -    the subsidiaries of Finbond,

           (collectively, the Excluded Finbond Shareholders).

The registered holders of Finbond Shares, other than those
beneficially owned by the Excluded Finbond Shareholders,
are referred to hereinafter as the Offeree Shareholders
and the Finbond Shares held by them are referred to as the
Offer Shares.

An Offeree Shareholder shall be entitled to accept the
Offer in respect of all or any of its Offer Shares.

RVF as the offeror under the Offer is acting in concert
with the other Concert Parties.

Offer Consideration

RVF shall offer to acquire all the Offer Shares from the
Offeree Shareholders for a cash offer consideration of
R2.91 (two Rand and ninety one cents) per Offer Share
(Offer Consideration), being the highest price paid within
the 6 (six) month  period   before   the   date    of    this
announcement.

The Offer Consideration represents a discount of:

 9,06% (nine comma zero six per cent) discount to the
 closing price of a Finbond Share on the JSE on Wednesday,
 24 May 2017 of R3.20;

 9,91% (nine comma nine one per cent) discount to the 30
 day VWAP of Finbond shares on the JSE of R3.23 up to
 Wednesday, 24 May 2017;

 19,39% (nineteen comma three nine per cent) to 30,88%
 (thirty comma eight eight per cent) discount to the fair
 value range determined by BDO.

The Offer Period

The Offer will open for acceptance one day after the date
of posting of the combined offer circular to be distributed
to    the   Offeree   Shareholders   in   respect   of     the   Offer
(Combined Offer Circular) and will, in accordance with
       Regulations   102(4)    and   105(5)    of   the   Companies
       Regulations, be open for a minimum period of 30 (thirty)
       business days (Offer Period).

       Cash Confirmation

       In accordance with Regulation 111(4) and Regulation 111(5)
       of the Companies Regulations, Bowman Gilfillan Inc. has
       provided Finbond and the Takeover Regulation Panel (TRP)
       with an irrevocable cash confirmation, which confirms on
       and subject to the terms thereof that RVF has sufficient
       cash resources held in escrow by Bowmans Gilfillan Inc. to
       satisfy payment of the Offer Consideration for the Offer
       Shares in full.

       No set-off of the Offer Consideration

       The payment of the Offer Consideration to which any Offeree
       Shareholder is entitled under the Offer will be made in
       full in accordance with the terms of the Offer, without
       regard to any lien, right of set-off, counterclaim or other
       analogous right to which RVF may otherwise be, or claim to
       be, entitled against the Offeree Shareholder.

       Offer not made where unlawful

       The Offer shall not constitute an offer to purchase or the
       solicitation of an offer to sell any Finbond Shares in any
       jurisdiction in which such offer, solicitation or sale
       would be unlawful under the laws of such jurisdiction.

3.   RATIONALE FOR THE OFFER

     As an unintended consequence of the Acquisition, RVF and the
     other concert parties’ shareholding in Finbond has increased
     to above 35% (thirty five per cent), obliging RVF to make a
     mandatory offer to Finbond Shareholders for their Finbond
     shares in terms of section 123 of the Companies Act read
     with chapter 5 of the Companies Regulations.

4.   SUSPENSIVE CONDITION TO THE OFFER

     The Offer and the implementation thereof will be subject to
     the fulfilment of the suspensive condition (Offer Condition)
     that, by no later than 30 September 2017 (or such later date
     as is agreed between RVF and Finbond), and to the extent
     applicable, all and any requisite regulatory approvals
     required for implementation of the Offer have been obtained
     (either unconditionally or subject to conditions acceptable
     to RVF, acting reasonably), including all and any requisite
     approvals to the extent applicable:

     -      of the TRP, including among other things, the issue by
            the TRP of a compliance certificate or exemption in terms
            of the Companies Act in relation to the Offer;

     -      in terms of the Exchange Control Regulations, 1961 made
            in terms of the Currency and Exchanges Act No. 9 of
            1933, and all directives and rulings issued thereunder;
            and

     -      of the JSE.

     The Offer Condition may be waived (in whole or in part) by
     RVF, in writing, to the extent the waiver is permissible in
     law.

     Pursuant to Regulation 105(5) of the Companies Regulations,
     an announcement will be published on SENS within 1 (one)
     business day after the Offer Condition has been fulfilled
     or, if applicable, waived.

5.   INTEREST OF RVF AND THE CONCERT PARTIES IN FINBOND

     RVF and the other Concert Parties currently directly and/or
     indirectly beneficially own a total of 280 541 431 Finbond
     Shares, representing 36.81% of all the Finbond Shares.

6.   IRREVOCABLE   UNDERTAKINGS  NOT  TO ACCEPT THE  OFFER  BY
     SHAREHOLDERS OWNING 53.92%

     RVF has obtained irrevocable undertakings from, or on behalf
     of, the persons listed below, beneficially owning, in total,
     53,92% (fifty three comma nine two per cent) of the Finbond
     Shares in terms of which (amongst other things) they have
     irrevocably undertaken, with respect to the Finbond Shares
     beneficially owned by them, and subject to the terms of such
     undertakings, to be excluded from the Offer and accordingly
     to be Excluded Finbond Shareholders.

     There will be no change to the nature of Finbond’s business
     or its strategy, and no change to its board of directors or
     executive management, pursuant to the Offer. Finbond Shares
     will remain listed on the JSE following the completion of
     the Offer, subject to Finbond continuing to meet the public
     shareholder spread and related requirements of  the JSE
     Listings Requirements.


      Name                           No. of Finbond         Percentage
                                     Shares                 of       all
                                     Beneficially           Finbond
                                     Owned                  Shares


      Kings   Reign  Investments     182 595 351                23.96%
      Proprietary Limited
      Net1    Finance   Holdings     197 522 435                25.91%
      Proprietary Limited
      Finbond Property Finance        15 451 014                 2.03%
      Proprietary Limited
      Buckley Capital                 15 372 116                 2.02%
      Management, LLC
      Total                           410 988 916               53.92%


7.   FINBOND   GROUP   LIMITED  SHARE APPRECIATION RIGHTS  SCHEME
     (Finbond Scheme)

     RVF shall comply with any obligation it may have under the
     Companies Act and the Companies Regulations to make a
     comparable offer to the holders of the Share Appreciation
     Awards (SAA) under the Finbond Scheme (Comparable Offer).

     As at the date of this announcement, there are 43 500 000
     SAAs in issue, all of which, in terms of the rules of the
     Finbond Scheme, have become unconditional, or will as a
     result of RVF and the other Concert Parties beneficially
     owning in excess of 35% (thirty five per cent) of the issued
     Finbond Shares become unconditional.

     The cash confirmation referred to in paragraph 2.4 will
     accordingly include an amount of R23 874 342 (twenty three
     million eight hundred and seventy four Rand three hundred
     and forty two Rand) in relation to RVF’s obligation under
     the Comparable Offer.

8.   RECOMMENDATION AND INDEPENDENT EXPERT OPINION

     The Independent Board of Finbond (Independent Board) has
     been formed for the purposes of considering the fairness of
     each of the Offer and the Comparable Offer in accordance
     with the Companies Regulations.

     The Independent Board has appointed BDO Corporate Finance,
     an independent expert to provide the Independent Board with
     independent, external advice in relation to the Offer and
     the Comparable Offer and to make appropriate recommendations
     to the Independent Board.

     BDO Corporate Finance has considered the terms and conditions
     of the Offer and, subject to the conditions contained in its
     opinion, has expressed the view that the Offer is not fair
     to Finbond Shareholders.

     BDO Corporate Finance has determined, based on its valuation
     procedures, a fair value range of R3.61 (three rand sixty
     one cents) to R4.21 (four rand twenty one cents) per Finbond
     Share.

9.   VIEWS OF THE FINBOND BOARD ON THE OFFER

     Finbond’s  board of directors (Finbond Board), having
     considered the terms of the Offer and the opinion of the
     Independent Board and independent advisor, is of the view
     that the Offer is not fair and recommends that Finbond
     Shareholders reject the Offer.

     This view is based on inter alia:

        -     BDO Corporate Finance having determined a fair value
              range of R3.61 (three Rand sixty one cents) to R 4.21
              (four Rand twenty one cents) per Finbond Share; and

        -     BDO Corporate Finance having considered the terms and
              conditions of the Offer and subject to the conditions
              contained in its opinion having determined that the
              Offer is not fair to Finbond Shareholders.

        -     the Offer being priced at R 2.91 (two Rand and ninety
              one cents), being a:

              o   9.06% (nine comma zero six per cent) discount to
                  the closing price of a Finbond Share on the JSE on
                  Wednesday, 24 May 2017 of R3.20;
            o   9,91% (nine comma nine one per cent) discount to
                the 30 day VWAP of Finbond shares on the JSE of
                R3.23 up to Wednesday, 24 May 2017;

            o   19,39% (nineteen comma three nine per cent) to
                30,88% (thirty comma eight eight per cent)
                discount to the fair value range determined by BDO.

      The members of the Finbond Board, and companies owned and
      controlled by them, will not be accepting the Offer in
      respect of the Finbond Shares beneficially owned by them.

10.   POSTING OF THE COMBINED OFFER CIRCULAR

      Full details of the Offer as well as the independent expert’s
      opinion and the views and recommendation of the Finbond Board
      will be included in the Combined Offer Circular which will
      contain, inter alia, the terms of the Offer, pertinent dates
      relating to the Offer and a form of acceptance, surrender
      and transfer for use by certificated Offeree Shareholders.
      The Combined Offer Circular is expected to be distributed to
      Finbond Shareholders by no later than 26 June 2017.

11.   RESPONSIBILITY STATEMENTS

      The board of RVF accepts responsibility for the information
      contained in this announcement insofar as it relates to RVF
      and the Concert Parties. To the best of its knowledge and
      belief, such information is true and nothing has been omitted
      which is likely to affect the importance of such information.

      The Finbond Independent Board accepts responsibility for the
      information contained in this announcement insofar as it
      relates to Finbond. To the best of its knowledge and belief,
      such information is true and nothing has been omitted which
      is likely to affect the importance of such information.
Johannesburg
26 May 2017


Sponsor to Finbond
Grindrod Bank Limited

Date: 26/05/2017 05:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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