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Firm Intention Announcement In Respect Of An Offer To Shareholders To Repurchase Their Shares
ASSORE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1950/037394/06)
JSE share code: ASR
ISIN: ZAE000146932
(“Assore”)
FIRM INTENTION ANNOUNCEMENT BY ASSORE IN RESPECT OF AN OFFER TO
SHAREHOLDERS TO REPURCHASE THEIR SHARES AND THE PROPOSED SUBSEQUENT
DELISTING OF ASSORE FROM THE JSE
1. INTRODUCTION
1.1 The board of directors of Assore (the “Board”) is pleased to announce that it is has
resolved to propose a transaction (the "Transaction") to shareholders incorporating:
1.1.1 an offer to all “Eligible Shareholders”, being all Assore shareholders
(“Shareholders”) other than the Shareholders identified in paragraph 5 below
(“Remaining Shareholders”), to acquire all of the ordinary shares in the issued
share capital of Assore (“Shares”) other than those Shares held by the Remaining
Shareholders (together, “Scheme Shares”) for a cash consideration of R320.00
per Scheme Share (“Scheme Consideration”), in accordance with the provisions
of sections 48 and 114(1)(e) of the Companies Act, No. 71 of 2008, as amended
(“Companies Act”) and paragraph 1.17(b) of the Listings Requirements of the
JSE (“Listings Requirements”), by way of a scheme of arrangement
(“Scheme”); and
1.1.2 separate to the Scheme, but concurrently with it, a conditional general offer
(“General Offer”) by Assore to Eligible Shareholders, to acquire all of the Shares
other than those Shares held by the Remaining Shareholders (“General Offer
Shares”) for a cash consideration of R320.00 per General Offer Share
(“General Offer Consideration”), in accordance with the provisions of sections 48
and 117(1)(c)(v) of the Companies Act and paragraphs 1.15(c) and 5.69 of the
Listings Requirements, which will be implemented only if the Scheme fails; and
1.1.3 the subsequent delisting of all of the Shares from the
Johannesburg Stock Exchange (“JSE”), in terms of paragraph 1.17(b) of the
Listings Requirements (“Delisting”), pursuant to the implementation of the
Scheme or, if the Scheme fails, pursuant to the Delisting Resolution (as defined in
paragraph 4.3.1.3) being approved, and the General Offer being implemented.
1.2 The Scheme and the General Offer are proposed concurrently on the basis that the
implementation of the General Offer will be conditional upon, amongst others, the
Scheme not becoming operative. In the event that the Scheme becomes operative, the
General Offer will lapse. Alternatively, if the Scheme does not become operative and the
General Offer becomes wholly unconditional, the General Offer will be implemented.
The Scheme Consideration or the General Offer Consideration, as applicable, excludes
the interim dividend of R7.00 per Share declared by Assore on or about 21 February
2020, which will be payable to Shareholders in the ordinary course.
1.3 The Delisting will occur if: (i) pursuant to paragraph 1.17(b) of the Listings Requirements,
the Scheme becomes operative; or (ii) the General Offer becomes wholly unconditional
and is implemented and the Delisting is approved by Shareholders.
1.4 The contents of this announcement (“Firm Intention Announcement”) constitute a firm
intention by Assore to make an offer to the Eligible Shareholders 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)
(“Companies Regulations”).
1.5 Assore has constituted an independent board of directors of Assore
(“Independent Board”) for purposes of the Scheme and General Offer, including,
evaluating the terms and conditions of the Scheme and General Offer and advising
Shareholders thereon as required by the Takeover Regulations. The Independent Board
comprises Messrs. Edward Southey, William Urmson and Sydney Mhlarhi.
1.6 The purpose of this Firm Intention Announcement is to advise Shareholders of the
Transaction and specifically the terms and conditions of the Scheme and the General
Offer.
2. RATIONALE FOR THE TRANSACTION
2.1 Assore, which has been successfully listed on the Main Board of the JSE since 1950, is
currently held 52.4% by Oresteel (controlled by the Sacco Family), 26.1% by black
economic empowerment (“BEE”) shareholders and 4.1% directly by various members of
the Sacco Family, resulting in a high level of strategic shareholding and a very low free
float.
2.2 The combination of this tightly held strategic shareholding and the resultant low share
liquidity, which both deters potential institutional investors and results in the share price
being particularly volatile, has led the Remaining Shareholders, the Board and the
Independent Board to believe that Assore is more suited to an unlisted environment, and
that its continued listing provides little benefit to the strategic shareholders.
2.3 The Board has thus proposed that Assore use its available internal cash resources to
buy back all of the issued shares other than the shares held by the Remaining
Shareholders and subsequently delist the company from the JSE. The buyback, which
will cost Assore approximately R7.8bn, will provide minority shareholders with a valuable
liquidity event.
2.4 The offer price of R320.00 per Share is a 80% premium to the closing price on the date
preceding this Firm Intention Announcement, a 51% premium to the 30-day volume
weighted average price on the date preceding this Firm Intention Announcement and a
36% premium to the 60-day volume weighted average price on the date preceding this
Firm Intention Announcement.
3. TERMS AND CONDITIONS OF THE SCHEME
The Scheme constitutes an “affected transaction” as defined in section 117(1)(c)(iii) of the
Companies Act, and as such the Scheme is regulated by the Companies Act and the
Companies Regulations. The salient terms of and other information pertaining to the Scheme
are set out below:
3.1 Terms of the Scheme
3.1.1 The Scheme will be proposed by the Board between Assore and the Eligible
Shareholders.
3.1.2 The Scheme will be subject to the fulfilment of the Scheme Conditions Precedent
set out in paragraph 3.3 below.
3.1.3 In the event that the Scheme becomes operative, the listing of all of the Shares on
the JSE will be terminated, and Eligible Shareholders, excluding those
Shareholders who validly exercise their appraisal rights in accordance with
section 164 of the Companies Act as a consequence of the approval of the
Scheme and whose Shareholder rights have not been reinstated as envisaged in
sections 164(9) and 164(10) of the Companies Act or who have not been ordered
by any South African court of competent jurisdiction (“Court”) to withdraw their
demands in terms of section 164(15)(c)(v)(aa) of the Companies Act
(“Scheme Participants”), will be deemed to have disposed of all of their Scheme
Shares at the Scheme Consideration, such that Assore will acquire all of the
Scheme Shares previously held by the Scheme Participants.
3.2 Scheme Consideration
The Scheme Participants shall receive the Scheme Consideration, in the amount of
R320.00 per Scheme Share held by such Scheme Participant.
3.3 Scheme Conditions Precedent
3.3.1 The implementation of the Scheme is subject to the fulfilment or waiver, as the
case may be, of the following conditions (“Scheme Conditions Precedent”) by no
later than Thursday, 7 May 2020 (“Longstop Date”):
3.3.1.1 all approvals, consents or waivers from those South African regulatory
authorities as may be necessary for Assore to implement the Scheme,
including the Takeover Regulation Panel (“TRP”) (by means of the issue of
a compliance certificate in terms of section 121(b)(i) of the Companies Act),
are obtained on an unconditional basis or, to the extent that any such
regulatory approvals, consents or waivers are obtained subject to any
condition or qualification, Assore (to the extent that it is adversely affected
by the condition or qualification) confirms in writing that the condition or
qualification is acceptable to it, which confirmation shall not be
unreasonably withheld or delayed;
3.3.1.2 all necessary Shareholder approvals and/or resolutions as may be
necessary to give effect to the Scheme have been obtained, including, but
not limited to, the special resolution at the general meeting of Shareholders
(“General Meeting”) expected to be held at 11:00 on or about Thursday, 16
April 2020 in order to consider and, if deemed fit, pass, the special
resolution in accordance with sections 48(8) and 115(2) of the Companies
Act (the “Scheme Resolution”);
3.3.1.3 Assore has not elected to treat the Scheme Resolution as a nullity pursuant
to section 115(5)(b) of the Companies Act;
3.3.1.4 in the circumstances where Assore has not elected to treat the Scheme
Resolution as a nullity pursuant to section 115(5)(b) of the Companies Act,
a Court has granted its approval pursuant to section 115(3) of the
Companies Act in circumstances where:
3.3.1.4.1 the Scheme Resolution is opposed by 15% or more of the voting
rights that were exercised in respect of the Scheme Resolution; and
3.3.1.4.2 a Shareholder who voted against the Scheme Resolution requires
Assore, within five business days after the vote, to seek Court
approval pursuant to section 115(3)(a) of the Companies Act;
3.3.1.5 no Shareholder who voted against the Scheme Resolution applies to Court
within 10 business days after the vote for leave to apply for a review of the
Scheme in accordance with the requirements of section 115(3)(b) of the
Companies Act and section 115(6) of the Companies Act;
3.3.1.6 Assore waives the Scheme Condition Precedent in paragraph 3.3.1.5 and
the Court does not grant leave to any Shareholder to apply to Court for a
review of the Scheme, as contemplated in sections 115(3)(b), 115(6) and
115(7) of the Companies Act;
3.3.1.7 Assore waives the Scheme Condition Precedent in paragraph 3.3.1.6 and
the Court approves the Scheme Resolution pursuant to section 115(7) of
the Companies Act; and
3.3.1.8 with regard to Shareholders entitled to and exercising their appraisal rights,
either: (i) Shareholders give notice objecting to the Scheme as
contemplated in section 164(3) of the Companies Act and vote against the
Scheme at the relevant meeting in respect of less than or equal to 5% of all
of the Scheme Shares; or (ii) if Shareholders give notice objecting to the
Scheme and vote against the Scheme at the meeting in respect of more
than 5% of all of the Scheme Shares, then, within the time period permitted
in terms of the Companies Act, dissenting Shareholders have exercised
appraisal rights, by giving valid demands in terms of sections 164(5) to
164(8) of the Companies Act, in respect of less than or equal to 5% of all
the Scheme Shares, or not at all.
3.3.2 Assore shall be entitled to waive (in whole or in part) in writing any one or more of
the Scheme Conditions Precedent stipulated in paragraphs 3.3.1.3, 3.3.1.4,
3.3.1.5, 3.3.1.6, 3.3.1.7 and 3.3.1.8. The remaining Scheme Conditions Precedent
stipulated above are not capable of waiver. The Longstop Date may be extended
by Assore, subject to any approval as may be required from the TRP. Any
extension of the Longstop Date will be announced on the Stock Exchange News
Service of the JSE (“SENS”) and published in the South African press.
3.4 Termination of the Scheme
The Scheme shall terminate and cease with immediate effect only as follows:
3.4.1 if any Scheme Condition Precedent, which may be waived by Assore, becomes
incapable of fulfilment, and Assore does not waive that Scheme Condition
Precedent; or
3.4.2 if all the Scheme Conditions Precedent have not been fulfilled or waived on or by
the date specified for fulfilment.
4. TERMS AND CONDITIONS OF THE GENERAL OFFER
4.1 Terms of the General Offer
4.1.1 Simultaneously with the Scheme, Assore will make a separate but concurrent
General Offer, in terms of sections 48(8) and 117(1)(c)(v) of the Companies Act
and paragraph 1.15(c) of the Listings Requirements, to the Eligible Shareholders,
whereby each Eligible Shareholder will be entitled to elect whether or not to
dispose of all of their General Offer Shares to Assore for the General Offer
Consideration (“General Offer Participants”).
4.1.2 For the avoidance of doubt, implementation of the General Offer will be conditional
on, amongst others, the Scheme not becoming operative. In the event that the
Scheme does become operative, the General Offer will lapse and be of no force
and effect.
4.1.3 If the Scheme does not become operative and the General Offer becomes wholly
unconditional and is implemented, then the Delisting will be implemented in terms
of paragraph 1.14 of the Listings Requirements and each General Offer Participant
will receive the General Offer Consideration in exchange for the General Offer
Shares tendered and disposed of.
4.1.4 In the event that the General Offer becomes wholly unconditional and is
implemented, Assore will acquire all the General Offer Shares tendered and
previously held by the General Offer Participants. The repurchase of the General
Offer Shares by Assore will be subject to the acceptance of the General Offer and
the provisions of section 124(1) of the Companies Act. In the event that the
General Offer is implemented and accepted by Eligible Shareholders holding at
least 90% of the General Offer Shares, Assore may, at its election, invoke the
provisions of section 124(1) of the Companies Act, to compulsorily acquire all of
the General Offer Shares not already tendered by the Eligible Shareholders.
4.1.5 If the Scheme does not become operative and the General Offer becomes wholly
unconditional and is implemented, and Assore elects not to invoke the provisions
of section 124(1) of the Companies Act, Eligible Shareholders who have not
accepted the General Offer will remain Shareholders in Assore.
4.2 General Offer Consideration
General Offer Participants shall receive the General Offer Consideration, in the amount
of R320.00 per General Offer Share held by such General Offer Participant.
4.3 The General Offer Conditions
4.3.1 Implementation of the General Offer is subject to the fulfilment or waiver, as the
case may be, of the following conditions (“General Offer Conditions”) by no later
than Thursday, 8 May 2020:
4.3.1.1 the Scheme does not become operative;
4.3.1.2 all necessary Shareholder approvals and/or resolutions as may be
necessary to give effect to the General Offer (including the repurchase
resolution as required pursuant to section 48(8) of the Companies Act
(“Repurchase Resolution”), and the resolution to approve the General
Offer as a specific repurchase in terms of paragraph 5.69(b) of the Listings
Requirements (“Specific Repurchase Resolution”)) have been passed by
the requisite majority of Shareholders at the General Meeting;
4.3.1.3 the delisting resolution is adopted by the requisite majority of Eligible
Shareholders at the General Meeting as contemplated in
paragraphs 1.15(a) and 1.16 of the Listings Requirements
(“Delisting Resolution”);
4.3.1.4 Eligible Shareholders accept the General Offer in respect of so many
General Offer Shares as will result in Assore reacquiring more than 90% of
the General Offer Shares, such that Assore can rely on the provisions of
section 124 of the Companies Act;
4.3.1.5 the receipt of all approvals, consents or waivers from those South African
regulatory authorities as may be necessary for Assore to implement the
General Offer and Delisting, including the TRP (by means of issue of a
compliance certificate in terms of section 121(b)(i) of the Companies Act) on
an unconditional basis or, to the extent that any such regulatory approvals,
consents or waivers are obtained subject to any condition or qualification,
Assore (to the extent that it is adversely affected by the condition or
qualification) confirms in writing that the condition or qualification is
acceptable to it, which confirmation shall not be unreasonably withheld or
delayed; and
4.3.1.6 to the extent that appraisal rights are found to apply to the General Offer,
and Shareholders exercise such appraisal rights, either: (i) Shareholders
give notice objecting to the Repurchase Resolution as contemplated in
section 164(3) of the Companies Act and vote against the Repurchase
Resolution at the relevant meeting in respect of less than or equal to 5% of
all of the General Offer Shares; or (ii) if Shareholders give notice objecting
to the Repurchase Resolution and vote against the Repurchase Resolution
at the meeting in respect of more than 5% of all of the General Offer
Shares, then, within the time period permitted in terms of the Companies
Act, such Shareholders have exercised appraisal rights, by giving valid
demands in terms of sections 164(5) to 164(8) of the Companies Act, in
respect of less than or equal to 5% of all the General Offer Shares, or not at
all.
4.3.2 Waiver and extension of General Offer Conditions
4.3.2.1 The General Offer Conditions set out in paragraphs 4.3.1.3, 4.3.1.4 and
4.3.1.6 are capable of waiver by Assore, and the time and/or date for
fulfilment or waiver of such General Offer Conditions may be extended by
Assore as may be agreed between Assore and the TRP.
4.3.2.2 The General Offer Conditions set out in paragraphs 4.3.1.1, 4.3.1.2 and
4.3.1.5 are not capable of waiver but the time and/or date for fulfilment of
these General Offer Conditions may be extended by Assore as may be
agreed between Assore and the TRP.
4.3.2.3 An announcement will be released on SENS as soon as practicable after all
the General Offer Conditions have been fulfilled or waived, if the General
Offer Conditions are not fulfilled or waived timeously, or if the time and/or
date for fulfilment or waiver of the General Offer Conditions is extended.
5. THE REMAINING SHAREHOLDERS
5.1 The Remaining Shareholders comprise: (i) Oresteel Investments Proprietary Limited; (ii)
Main Street 350 Proprietary Limited; (iii) Main Street 460 Proprietary Limited; (iv) Main
Street 904 (RF) Proprietary Limited; (v) members of the Sacco Family (Messrs. Desmond
Giulio Amedeo Sacco, Patrick Eugenio Sacco and Nicholas Giulio Sacco; and
Mesdames Angela Diana Sacco, Casey Lee Sacco and Sally Giorgina Dufour Berte) and
persons/holdings related to, associated with or controlled by the Sacco Family who are
Shareholders, and includes any person holding Shares as nominee for, or in a custodial
capacity on behalf of, any member/s of the Sacco Family.
5.2 As at the date of this Firm Intention Announcement, the Remaining Shareholders own, in
aggregate, 82.6% of the Shares.
5.3 Assore and the Remaining Shareholders are concert parties in relation to the Scheme in
terms of regulation 84 of the Takeover Regulations and have therefore made
declarations in the required form to Assore and the TRP, as required by regulation 84(5)
of the Takeover Regulations. The Remaining Shareholders will, accordingly, abstain from
voting on the Scheme at the General Meeting.
6. IRREVOCABLE UNDERTAKINGS
As at the date of this Firm Intention Announcement, the following Eligible Shareholders have
provided irrevocable undertakings to vote the stated number of Shares, which are either held
as principal or on behalf of clients, in favour of the resolutions to be proposed at the General
Meeting and in respect of which they are entitled to vote (including the Scheme Resolution, the
Repurchase Resolution and the Delisting Resolution) or such additional number of Shares as
they may hold at the time of the General Meeting (together, the “Relevant Shares”). These
Eligible Shareholders have furthermore irrevocably undertaken to accept the General Offer in
respect of all of the Relevant Shares.
Number of Percentage
Eligible Shareholder Shares held of Shares1
Investec Asset Management 9 046 345 6.48%
Public Investment Corporation 4 035 929 2.89%
Total 13 082 274 9.37%
Notes:
1. The % of Shares is calculated based on 139 607 000 shares in issue, as at Friday, 28
February 2020.
2. The aforementioned Eligible Shareholders have provided irrevocable undertakings equal to
53.91% of all Shares eligible to vote on the Scheme Resolution, the Repurchase
Resolution and Delisting Resolution.
7. SOLVENCY AND LIQUIDITY
7.1 The Board has concluded that Assore will: (i) satisfy the solvency and liquidity test
contemplated in section 4 of the Companies Act immediately after completing the
repurchase by Assore of the Scheme Shares in terms of the Scheme or the General
Offer Shares in terms of the General Offer; and (ii) for purposes of paragraph 5.69(c) of
the Listings Requirements, that after considering the effect of the repurchase, the
provisions of sections 4 and 48 of the Companies Act have been complied with and that:
7.1.1 Assore and its subsidiaries (“Assore Group”) will be able, in the ordinary course
of business, to pay their debts for a period of 12 months after the date of the
repurchase;
7.1.2 the assets of the Assore Group will exceed the liabilities of the Assore Group for a
period of 12 months after the date of the repurchase;
7.1.3 the share capital and reserves of the Assore Group will be adequate for ordinary
business purposes for a period of 12 months after the repurchase; and
7.1.4 the working capital of the Assore Group will be adequate for ordinary business
purposes for a period of 12 months after the repurchase.
8. INDEPENDENT EXPERT AND FAIR AND REASONABLE OPINION
8.1 In accordance with paragraph 1.15(d) of the Listings Requirements and section 114(2) of
the Companies Act, the Independent Board has appointed BDO Corporate Finance
Proprietary Limited as the independent expert in terms of section 114(2) of the
Companies Act, regulation 90 of the Companies Regulations and Schedule 5 to the
Listings Requirements (“Independent Expert”) to provide the Independent Board with
external advice in relation to the Scheme and the General Offer, in the form of a fair and
reasonable opinion as required by and in compliance with the Takeover Regulations and
the Listings Requirements, and a fairness opinion as required by and in compliance with
the Listings Requirements.
8.2 The full substance of the Independent Expert's report in connection with the Scheme and
General Offer, once procured, will be more fully set out in the Offer Circular to be
distributed to Eligible Shareholders as referred to in paragraph 12 below.
9. VIEWS OF THE INDEPENDENT BOARD
The Independent Board, taking into account the report of the Independent Expert, has
considered the terms and conditions thereof, and is unanimously of the opinion that the terms
and conditions of the Scheme and the General Offer are fair and reasonable to Shareholders
and, accordingly, unanimously recommends that Shareholders vote in favour of the Scheme
Resolution, the Repurchase Resolution, the Specific Repurchase Resolution and the Delisting
Resolution.
10. RESPONSIBILITY STATEMENTS
The Independent Board and the Board, individually and collectively, accept full responsibility for
the accuracy of the information contained in this Firm Intention Announcement which relates to
Assore, the Scheme, the General Offer and the Delisting, and certify that, to the best of their
knowledge and belief, such information is true and this Firm Intention Announcement does not
omit any facts that would make any of the information false or misleading or would be likely to
affect the importance of any information contained in this Firm Intention Announcement. The
Independent Board and the Board have made all reasonable enquiries to ascertain that no
facts have been omitted and this Firm Intention Announcement contains all information required
by law, the Companies Act and the Listings Requirements.
11. GUARANTEE
Assore will use its available cash resources to fund the Scheme Consideration or General Offer
Consideration, as applicable. The funds to settle the Scheme Consideration and/or the General
Offer Consideration are in place and, in accordance with regulation 111(4) and 111(5) of the
Takeover Regulations, Assore has procured from The Standard Bank of South Africa Limited
and has delivered to the TRP, an irrevocable, unconditional bank guarantee in respect of the
maximum possible Scheme Consideration or General Offer Consideration, whichever is
applicable.
12. POSTING OF THE OFFER CIRCULAR AND NOTICE OF THE GENERAL MEETING
12.1 A circular providing full details of the Scheme and the General Offer and containing a
notice of the General Meeting, the report by the Independent Expert, the
recommendations of the Independent Board and the Board, the salient dates and times
relating to the Scheme and General Offer and the necessary forms in order to effect the
Scheme and General Offer, whichever is applicable, is expected to be distributed to
Shareholders on or about Monday, 16 March 2020 (“Offer Circular”).
12.2 The General Meeting is expected to be held at 11:00 on or about Thursday, 16 April
2020 at Assore's registered office, 15 Fricker Road, Illovo Boulevard, Johannesburg,
South Africa, 2196.
12.3 A further announcement setting out details of the salient dates and times will be
published in due course.
Johannesburg
Monday, 9 March 2020
FINANCIAL ADVISOR AND SPONSOR TO ASSORE
The Standard Bank of South Africa Limited
LEGAL AND TAX ADVISOR TO ASSORE
Webber Wentzel
INDEPENDENT EXPERT
BDO Corporate Finance Proprietary Limited
TRANSFER SECRETARIES
Singular Systems Proprietary Limited
Date: 09-03-2020 05:20:00
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