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Joint announcement of firm intention, the delisting of Mettle and withdrawal of cautionary announcement
Mettle Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2008/002061/06)
JSE share code: MLE
ISIN: ZAE000257622
("Mettle” or "the Company")
Genfin Holdings Proprietary Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2015/358979/07)
("Genfin” or "the Offeror")
JOINT ANNOUNCEMENT OF FIRM INTENTION BY THE OFFEROR TO MAKE AN OFFER TO
METTLE SHAREHOLDERS TO ACQUIRE THEIR SHARES, THE DELISTING OF METTLE AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
1.1. The board of directors of Mettle (“the Board”) is pleased to announce that the Company has
entered into an implementation agreement with Genfin (the “Implementation Agreement”), in
terms of which Genfin notifies the Company of its firm intention to make an offer (“the Proposed
Offer”) to acquire all of the issued shares (each a “Mettle Share”) in the share capital of the
Company that it does not own, other than the shares held by certain shareholders holding, in
aggregate, 157 320 450 Mettle Shares (the “Excluded Shareholders”), by way of a scheme
of arrangement (the “Scheme”), for a cash consideration of R2.10 per Mettle Share (“Scheme
Consideration”). The Scheme will be implemented in accordance with sections 114 and 115
of the Companies Act, No 71 of 2008, as amended (“the Companies Act”) and will be proposed
by the Board to shareholders of the Company (“Mettle Shareholders”) (other than the
Excluded Shareholders) (“Scheme Participants”).
1.2. The Proposed Offer constitutes a firm intention by the Offeror to make an offer to the Scheme
Participants, as contemplated in Chapter 5 of the Companies Act and Chapter 5 of the
Companies Regulations, 2011, promulgated under the Companies Act (which includes the
Takeover Regulations issued pursuant to sections 120 and 223 of the Companies Act) (the
“Companies Regulations”).
1.3. The Scheme, if successful, will be followed by the delisting (“the Delisting”) of the Mettle
Shares from the Alternative Exchange (“the AltX”) of the JSE Limited (“JSE”).
1.4. Certain of the Excluded Shareholders are presumed to be acting in concert with the Offeror for
purposes of the Companies Act and the Companies Regulations.
2. Rationale for the Proposed Offer
The Board believes that the Company and its subsidiaries are more suited to an unlisted environment,
and that the current listing provides little benefit to the Company at this stage of its operating cycle. In
addition, the Delisting will enable the Company to save on the costs associated with being listed on the
AltX.
Genfin is an investment holding company focused on building a portfolio of companies that provide
finance to small and medium enterprises and a smaller portfolio of other financial services focussed
assets. In pursuit of this investment strategy, Genfin has accumulated a material shareholding in Mettle
over the past 12 months and now wishes to consolidate its investment in the Company in an unlisted
environment and to provide additional capital in order to facilitate and support organic and acquisitive
growth.
Scheme Participants will be provided with an opportunity to realise their investment in Mettle at an
attractive premium to the Company’s share price, being a premium of 23.1% to the 30-day volume
weighted average price (“VWAP”) of Mettle Shares on the date preceding this announcement and a
premium of 46.7% to the VWAP of Mettle Shares on Friday, 24 January 2020, being the date preceding
the publication of the cautionary announcement alluding to the Proposed Offer.
3. Salient terms of the Scheme
3.1. The Proposed Offer constitutes an “affected transaction”, as defined in section 117(1)(c) of the
Companies Act. The Proposed Offer will be implemented by way of the Scheme. In terms of
the Scheme, the Offeror will make an offer to all Scheme Participants to purchase their shares
for the Scheme Consideration, to be settled in cash.
3.2. The Scheme is subject to the fulfilment of the following conditions precedent:
3.2.1. the resolution (“Scheme Resolution”) relating to the Scheme is approved by the
requisite majority of independent Mettle Shareholders;
3.2.2. in respect of the appraisal rights of shareholders as contained in section 164 of the
Companies Act, no valid appraisal demands are received by Mettle or, if any valid
appraisal demands are received, such demands are received from Mettle Shareholders
who, in aggregate, hold less than 5% (five percent) of the aggregate number of Mettle
Shares;
3.2.3. if any Mettle Shareholder who voted against the Scheme Resolution applies to court
for a review of the Scheme in terms of section 115(3)(b) and section 115(6) of the
Companies Act, either (i) the court refuses to grant leave to apply for such review, or
(ii) if leave to apply for review is granted, the court refuses to set aside the Scheme
Resolution;
3.2.4. a compliance certificate in respect of the Scheme is issued by the Takeover Regulation
Panel (“TRP”) in terms of section 119(4)(b) of the Companies Act; and
3.2.5. the Offeror and its concert parties provide notice to the Company, by no later than the
close of business on the day immediately prior to the fulfilment of the condition
precedent in paragraph 3.2.1 that no material adverse event (as such term is defined
in the Implementation Agreement) has occurred.
3.3. The conditions precedent in paragraph 3.2.5 may be waived by Genfin. The condition precedent
in paragraph 3.2.2, if waived, must be waived by both Genfin and Mettle. All remaining
conditions precedent may not be waived.
4. Funding of the Scheme Consideration and Confirmation of Financial Resources
4.1. The Offeror confirms, in accordance with Regulation 106(6)(c) of the Companies Regulations,
that its repayment of the financing obtained to fund the aggregate Scheme Consideration will
not depend upon the business of Mettle nor anticipated receipts of distributions from Mettle.
4.2. In accordance with Regulation 111(4) and Regulation 111(5) of the Companies Regulations,
Investec Bank Limited has provided an unconditional and irrevocable bank guarantee to the
TRP confirming that the Offeror has sufficient cash resources available to it to satisfy payment
of the aggregate Scheme Consideration of R118,031,720.10. The Offeror is obliged to pay a
once-off fee of R10 000 in respect of the guarantee.
5. Shareholding of the Offeror and Excluded Shareholders in Mettle
As at the date of this announcement, the Offeror and Excluded Shareholders are, directly or
indirectly, interested in Mettle Shares as set out in the table below:
Beneficial
Offeror Direct Indirect Total Total %
Genfin Holdings (Pty) Ltd 33 648 344 - 33 648 344 13.61
Excluded Shareholders
Granadino Investments (Pty) Ltd 82 369 947 - 82 369 947 33.32
Titan Global Investments (Pty) Ltd 28 695 605 - 28 695 605 11.61
Cream Magenta 140 (Pty) Ltd 12 951 674 - 12 951 674 5.24
Metcap 14 (Pty) Ltd 12 685 834 - 12 685 834 5.13
Titan Share Dealers (Pty) Ltd 10 236 344 - 10 236 344 4.14
Hendrik Frederick Prinsloo* - 9 591 972 9 591 972 3.88
Justin John Rookledge 683 622 683 622 0.28
William Daniel Marais* 3 556 66 007 69 563 0.03
Wikalox Investments (Pty) Ltd 30 308 - 30 308 0.01
Deuceprops 1015 CC 5 581 - 5 581 0.00
Total 147 662 471 9 657 979 157 320 450 63.65
* Includes shareholding of associates of such persons.
6. Irrevocable Undertakings
As at the date of this announcement, the Offeror has received irrevocable undertakings to vote
in favour of the resolutions to be proposed in relation to the Scheme from the following Mettle
Shareholders (such shareholders collectively holding 32 078 035 of the total issued Mettle
Shares):
Shareholder Mettle Shares % of Mettle % of
held Shares held voting
rights*
Teez Away Trading (Pty) Ltd 28 586 285 11.57 50.86
Aapstert Investments (Pty) Ltd 3 300 000 1.34 5.87
Friedrich Hans Esterhuyse 127 750 0.05 0.23
Murray Russell Collins 64 000 0.03 0.11
Total 32 078 035 12.99 57.07
* The percentage of voting rights indicated above is the percentage of voting rights which may
be exercised in respect of the Scheme resolution and, accordingly, excludes the voting rights
of the Offeror and Mettle Shareholders acting in concert with the Offeror.
7. No Comparable Offer
7.1. All participants (the “ESOP Participants”) in the Mettle Investments Employee Share Option
Program (the “ESOP”) have elected to waive their right to receive a comparable offer from
Genfin. Accordingly, Genfin is not required to make a comparable offer to the ESOP
Participants in terms of section 125(2) of the Companies Act as read with regulation 87 of the
Companies Regulations, 2011.
8. Independent Board
8.1. In accordance with section 114(2) of the Companies Act, the independent board of directors of
Mettle, being those directors of Mettle who act independently as contemplated in the
Companies Regulations, namely Bruce Chelius, Raymond Fenner and Marco Wentzel (“the
Independent Board") has appointed Nodus Capital Proprietary Limited ("the Independent
Expert") as required in terms of section 114(2) of the Companies Act and Regulation 90 of the
Companies Regulations, to provide the Independent Board with advice in relation to the
Scheme Consideration, and to make appropriate recommendations to the Independent Board
in relation to the Scheme Consideration.
8.2. The Independent Expert has performed a valuation of Mettle Shares. Taking into consideration
the terms and conditions of the Scheme, the Independent Expert has issued a report in which
it opines that the terms and conditions of the Scheme are fair and reasonable to the Scheme
Participants.
8.3. The full report will be contained in the Circular (as defined in paragraph 10 below).
9. Responsibility Statement
9.1. The Independent Board accepts responsibility for the information contained in this
announcement as it pertains to Mettle. To the best of the Independent Board's knowledge and
belief, the information contained in this announcement as it pertains to Mettle is true and nothing
has been omitted which is likely to affect the importance of such information.
9.2. The Offeror accepts responsibility for the information contained in this announcement as it
pertains to the Offeror. To the best of the Offeror's knowledge and belief, the information
contained in this announcement is true and nothing has been omitted which is likely to affect
the importance of such information.
10. Posting of Circular and Notice of General Meeting
A circular providing full details of the Scheme and containing, inter alia, a notice of general
meeting (“General Meeting”), the report by the Independent Expert, the recommendations of
the Independent Board and salient dates and times relating to the Scheme will be posted to
shareholders in due course (“Circular”). The salient dates in relation to the Scheme will be
published on the JSE's Securities Exchange News Service (“SENS”) prior to the posting of the
Circular.
11. Withdrawal of cautionary announcement
Shareholders are further advised that, pursuant to the publication of this firm intention
announcement, the cautionary announcement released on SENS on Friday, 24 January 2020
is withdrawn.
Cape Town
6 February 2020
Joint Corporate Advisor and Transaction Designated Joint Corporate Advisor
Advisor
Questco Proprietary Limited Mettle Corporate Finance Proprietary Limited
Legal Advisor to the Company Legal Advisor to the Offeror
Cliffe Dekker Hofmeyr Inc Edward Nathan Sonnenbergs Inc t/a ENSafrica
Independent Expert
Nodus Capital Proprietary Limited
Date: 06-02-2020 03:35:00
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