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Joint FIA: General Offer by Raubex (Pty)Ltd to acquire the Entire Issued Share Capital of Bauba & Proposed Delisting
Bauba Resources Limited Raubex Group Limited
(Incorporated in the Republic of South Africa) (Incorporated in the Republic of South Africa)
(Registration number: 1986/004649/06) (Registration number: 2006/023666/06)
Share code: BAU ISIN: ZAE000145686 Share code: RBX ISIN: ZAE000093183
("Bauba") ("RBX")
JOINT FIRM INTENTION ANNOUNCEMENT OF A GENERAL OFFER BY RBX (ACTING THROUGH
ITS SUBSIDIARY) TO ACQUIRE THE ENTIRE ISSUED SHARE CAPITAL OF BAUBA THAT IT
DOES NOT ALREADY OWN AND THE PROPOSED DELISTING OF BAUBA
1. INTRODUCTION
1.1 Shareholders of Bauba ("Shareholders") are advised that Bauba and Raubex Proprietary
Limited ("Raubex"), a wholly owned subsidiary of RBX, have resolved to propose a
transaction to all "Eligible Shareholders", being all Shareholders excluding Raubex, in
terms of which:
1.1.1 Raubex will make a general offer to acquire all the remaining ordinary shares in the
issued share capital of Bauba ("Shares") it does not already own, for a cash
consideration of R0.42 per Share ("Offer Consideration"), in terms of
section 117(1)(c)(v) of the Companies Act, No. 71 of 2008, as amended
("Companies Act") and paragraph 1.15(c) of the Listings Requirements of the JSE
Limited ("JSE") ("Listings Requirements") ("Offer"); and
1.1.2 all of the Shares will be delisted from the securities exchange operated by the JSE
("Delisting") if the requisite ordinary resolution approving the Delisting is approved
by Eligible Shareholders in general meeting in terms of paragraphs 1.15(a) and 1.16
of the Listings Requirements ("Delisting Resolution"), or, if the Delisting Resolution
is not approved, in terms of paragraph 1.17(a) of the Listings Requirements should
Raubex be able to invoke the provisions of section 124 of the Companies Act.
1.2 The Offer is an affected transaction as defined in section 117(1)(c)(v) of the Companies
Act and, accordingly, will be regulated by Chapter 5 of the Companies Act, Chapter 5 of
the Companies Regulations, 2011, promulgated under the Companies Act (which
comprises the "Takeover Regulations") and the Takeover Regulation Panel ("TRP").
1.3 The contents of this announcement reflect Raubex's firm intention to make a general offer
to Eligible Shareholders as contemplated in the Takeover Regulations.
1.4 In accordance with the requirements of the Takeover Regulations, Bauba has constituted
an independent board of directors ("Independent Board") for purposes of the Offer. The
Independent Board comprises Dr. Nakedi Mathews Phosa, Eugene Nel and Vincent Sean
Edwards.
1.5 The purpose of this firm intention announcement is to advise Shareholders of the terms
and conditions of the Offer, in compliance with regulation 101 of the Takeover Regulations.
2. THE OFFER
2.1 Offeror
2.1.1 The offeror is Raubex. As at the date of this announcement, Raubex beneficially
owns or controls, in aggerate, 462 484 254 Shares, which constitutes 61.68% of
Bauba's issued share capital. Raubex is not acting in concert with any party in
respect of the Offer, as described in regulation 84 of the Takeover Regulations.
2.2 Terms of the Offer
2.2.1 Raubex will offer to acquire all of the Shares held by Eligible Shareholders in
exchange for the payment of the Offer Consideration. Shareholders may elect to
accept the Offer in respect of all or only some of their Shares.
2.2.2 The Offer will be wholly unconditional and capable of acceptance from the Opening
Date (as defined in paragraph 2.3 below) of the Offer. However, settlement of any
acceptances by Eligible Shareholders of the Offer will only be undertaken by Raubex
once the TRP has issued a compliance certificate in respect of the Offer, in terms of
section 121(1)(b)(i) of the Companies Act.
2.2.3 The Offer Consideration is the highest price paid by Raubex for Shares within the
six-month period before the date of this announcement, and is the same price paid
by Raubex pursuant to its mandatory offer to Shareholders, in terms of section 123
of the Companies Act, which closed on Friday, 10 June 2022 ("Mandatory Offer").
2.3 Offer Period
The Offer is expected to open for acceptances from 09:00 on or about
Tuesday, 28 June 2022 ("Opening Date"), being one day after the expected distribution
of the combined offer circular to Shareholders in respect of the Offer ("Circular") and
remain open for acceptances for a minimum period of 30 business days ("Closing Date").
Raubex expressly reserves the right, subject to approval by the TRP, to extend the Closing
Date in accordance with the provisions of the Takeover Regulations and other applicable
laws.
2.4 Tax implications for Eligible Shareholders
The tax treatment of Eligible Shareholders is dependent on the individual circumstances
and the jurisdiction applicable to such Eligible Shareholders. It is recommended that, if
Eligible Shareholders are uncertain about the tax treatment regarding the disposal of their
Shares and the receipt of the Offer Consideration, they seek appropriate advice in this
regard.
2.5 Bank guarantee
Raubex has provided the TRP with an irrevocable and unconditional bank guarantee
issued by Nedbank Limited in accordance with regulations 111(4) and (5) of the Takeover
Regulations. The amount of the bank guarantee is sufficient to satisfy the maximum
aggregate Offer Consideration payable to all Eligible Shareholders that accept the Offer.
3. RATIONALE FOR THE OFFER AND DELISTING
3.1 As a result of, inter alia, the ongoing volatility in the mining sector (including weak chrome ore
pricing, and increased production costs), significant increases in local and international freight
costs and other continuing effects of the Covid-19 pandemic, Bauba and its subsidiaries
(the "Group") recorded a total comprehensive loss for the eight-month period ended
28 February 2022 of R52,3 million. Further risks remain of potential reduced global demand for
chrome ore and concentrates due to production capacity constraints in the People's Republic
of China and the uncertainty posed by potential additional Covid-19 waves, despite the
availability of vaccines, and record freight costs. If the chrome ore prices drop below end
June 2021 levels for an extended period, or if the Rand/US dollar exchange rate strengthens
significantly, it could cause material uncertainty for the Group to meet its obligations as they fall
due and may require further external funding support.
3.2 In this context, the board of directors of Bauba ("Board") has resolved that Bauba can no longer
justify the costs and associated administrative burden of a JSE listing relative to the benefit of
an ongoing listing, including the doubtful prospects of a junior counter raising public capital in
the sector in which Bauba operates. Without the assistance of a major investor such as Raubex
to support ongoing funding requirements, no finance is currently available to the Group in the
public market and the Group will be better placed to secure funding support for its operations
in an unlisted environment.
3.3 Furthermore, following the conclusion of the Mandatory Offer, the Shares have become highly
illiquid on the JSE, with c.96.59% of the Shares being held by three Shareholders, and the Offer
is therefore intended to provide Eligible Shareholders with an exit opportunity at a fair price,
which may otherwise not be forthcoming in the current economic climate and in particular as it
relates to the sector in which Bauba operates.
4. RECOMMENDATION AND INDEPENDENT EXPERT OPINION
4.1 In accordance with the Takeover Regulations and Listings Requirements, the Board and
the Independent Board have appointed Tamela Holdings Proprietary Limited as the
independent expert ("Independent Expert") in terms of the Listings Requirements and the
Takeover Regulations, to provide them with independent, external advice in relation to the
fairness and reasonableness of the Offer and to enable them to make appropriate
recommendations to Eligible Shareholders.
4.2 The contents of the Independent Expert's report and the final views of each of the Board
and Independent Board (for purposes of, and as required by, paragraph 1.15(d) of the
Listings Requirements and regulation 110 of the Takeover Regulations) will be included in
the Circular.
5. COMPULSORY ACQUISITION
Should the Offer be accepted by Eligible Shareholders in respect of, in aggregate, at least 90%
of the Shares for which the Offer is being made (for the avoidance of doubt, excluding any Shares
held by Raubex), being 258 599 920 Shares, Raubex reserves the right to implement a
compulsory acquisition of the remaining Shares in accordance with section 124 of the Companies
Act.
6. LISTING ON THE JSE
6.1 The listing of the Shares on the JSE will be terminated if the Delisting Resolution is
approved, or, if the Delisting Resolution is not approved, in terms of paragraph 1.17(a) of
the Listings Requirements should Raubex be able to invoke the provisions of section 124
of the Companies Act.
6.2 In the event that the Delisting Resolution is not approved or Raubex is unable to invoke
the provisions of section 124 of the Companies Act, the Shares will remain listed on the
Main Board of the JSE, however, Eligible Shareholders should be aware that there may
be a very limited market for trade in Shares after the Closing Date as three Shareholders
control c.96.59% at the date of this announcement.
7. DOCUMENTATION AND SALIENT DATES
7.1 Full details of the Offer, the Delisting and the Delisting Resolution will be included in the
Circular, which will include a notice of general meeting, form of proxy, form of acceptance
and transfer and electronic participation form. The Circular is expected to be distributed to
Eligible Shareholders on or about Monday, 27 June 2022.
7.2 The important dates and times pertaining to the Offer will be published on SENS and in
the press on the date of the distribution of the Circular.
8. RESPONSIBILITY STATEMENTS
8.1 The Raubex board of directors accepts responsibility for the information contained in this
announcement insofar as it relates to Raubex (including details of the Offer). To the best
of its knowledge and belief, such information contained herein is true and nothing has been
omitted which is likely to affect the importance of such information.
8.2 The Independent Board accepts responsibility for the information contained in this
announcement insofar as it relates to Bauba. To the best of its knowledge and belief, such
information contained herein is true and nothing has been omitted which is likely to affect
the importance of such information.
Johannesburg
Tuesday, 21 June 2022
Sponsor to Bauba Legal advisor to Bauba
Merchantec Capital Webber Wentzel
Financial advisor and sponsor to Raubex Legal advisor to Raubex
Investec DLA Piper
Date: 21-06-2022 09:00:00
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