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TIGER BRANDS LIMITED - Oceana Fractional entitlements and apportionment announcement

Release Date: 25/04/2019 10:59
Code(s): TBS     PDF:  
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Oceana Fractional entitlements and apportionment announcement

TIGER BRANDS LIMITED
“Tiger Brands” or “the Company”
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS ISIN: ZAE000071080

UNBUNDLING OF SHAREHOLDING IN OCEANA GROUP LIMITED (“OCEANA”)
 ? CASH PROCEEDS IN RESPECT OF FRACTIONAL ENTITLEMENTS
 ? APPORTIONMENT OF TAX COST FOR SOUTH AFRICAN TAX PURPOSES

1. Introduction

Shareholders of Tiger Brands (“Shareholders”) are referred to the
detailed terms, declaration and finalisation announcement released by
Tiger Brands on the Stock Exchange News Service on 5 April 2019 (“the
Unbundling Announcement”) regarding the unbundling of the 49,104,774
shares in Oceana (“the Unbundled Shares”) to Shareholders in the ratio
of 25,86927 Unbundled Shares for every 100 shares held in Tiger Brands
(“Tiger Brands Shares”) on the close of business on Friday, 26 April
2019 (“the Unbundling”). The Unbundling amounts to a distribution in
specie of the Unbundled Shares in terms of section 46 of the South
African Income Tax Act, No. 58 of 1962 (‘the Income Tax Act”).

2. Purpose of the announcement

The purpose of this announcement is to notify Shareholders of the
following:

  - The value to be utilised in determining the cash payment due to a
     Shareholder in respect of any fractional entitlements (“the Cash
     Proceeds”);
  - The closing prices of both the Unbundled Shares and Tiger Brands
     Shares on 24 April 2019, the day the Tiger Brands Shares begin
     trading “ex” the entitlement to receive the Unbundled Shares; and
  - The ratio in which the expenditure incurred and / or the market
     value (for purposes of paragraph 29 of the Eighth Schedule to the
     Income Tax Act) (“the Market Value”) in respect of the Tiger Brands
     Shares must be apportioned between the Tiger Brands Shares and the
     Unbundled Shares for South African taxation purposes (“the
     Apportionment Ratio”).

3. Cash Proceeds of fractional entitlement

As outlined in paragraph 11 of the Unbundling Announcement, in
implementing the Unbundling, Tiger Brands is required by the Listing
Requirements of the JSE Limited (“Listings Requirements”) to round down
the fractional entitlements to Unbundled Shares to the nearest whole
number. The fractions of Unbundled Shares to which Shareholders would
otherwise have been entitled to, will not be transferred to them but
will be aggregated and sold in the open market as soon as practically
possible after the Unbundling.
Shareholders will accordingly receive monetary compensation (i.e. the
Cash Proceeds) in respect of their fractional entitlements to Unbundled
Shares. In accordance with the Listings Requirements, the Cash Proceeds
have now been determined with reference to the volume-weighted average
price (“VWAP”) of an Unbundled Share on the securities exchange operated
by the JSE Limited on 24 April 2019, reduced by 10%. Taking into account
the VWAP of ZAR72.87, Shareholders are advised that the calculation of
the Cash Proceeds due to Shareholders in respect of any fractional
entitlements will be based on a price of ZAR65.58(i.e. ZAR72.87 x 0.9)
per Unbundled Share.

Example of fractional entitlement

This example assumes that a Shareholder holds 100 Tiger Brands Shares at
the close of business on Friday, 26 April 2019, the Record Date to
receive the Unbundled Shares. The rounding provision described above is
then applied and the Shareholder will receive 25 Unbundled Shares in
respect of the 100 Tiger Brands Shares held as at the Record Date. In
addition, the Shareholder will receive Cash Proceeds of ZAR57.01 in
respect of the fractional entitlement (0.86927 x ZAR65.58).

4. Apportionment ratio

Shareholders are further referred to paragraphs 14.2.1.1.3 and
14.2.1.2.3 of the Unbundling Announcement, which require Tiger Brands to
advise Shareholders of the Apportionment Ratio. Shareholders are hereby
advised that the Apportionment Ratio is based on the closing price of
ZAR244.37 per Tiger Brands Share and ZAR72.56 per Unbundled Share on 24
April 2019. The Apportionment Ratio applicable to the Unbundled Shares
has, therefore, been calculated as follows:

     Apportionment Ratio = (A / (A + B))
     Where –

          A  = the closing price of an Unbundled Share x the unbundling ratio,
          i.e. ZAR18.77 (being ZAR72.56 X 0.2586927);

          B  =   the closing price of a Tiger Brands Share, i.e. ZAR244.37
     
      =   (ZAR18.77 / (ZAR18.77 + ZAR244.37))
      =   7,13309%

The Apportionment Ratio of 7,13309% is to be applied when allocating the
expenditure incurred and/or the Market Value in respect of the Tiger
Brands Shares to the Unbundled Shares.

The expenditure incurred and/or the Market Value in respect of the Tiger
Brands Shares will accordingly be reduced by the amount allocated to the
Unbundled Shares.

More information on the potential South African taxation considerations
for Shareholders can be found in paragraph 14 of the Unbundling
Announcement. Shareholders are, however, advised to consult their own
taxation advisers on the tax consequences of the Unbundling.


Bryanston
25 April 2019

Financial Advisor
Standard Chartered Bank


                                                                           2
Legal Advisor
Edward Nathan Sonnenbergs
Davis Polk & Wardwell London (UK & US)

Sponsor:
J.P. Morgan Equities South Africa (Pty) Limited




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Date: 25/04/2019 10:59:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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